Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of New Chief Financial Officer
On November 5, 2019, the Board of Directors (the "Board") of The Hain Celestial
Group, Inc. (the "Company") appointed Javier H. Idrovo as Executive Vice
President and Chief Financial Officer, effective December 2, 2019 (the "Start
Date"). Mr. Idrovo will succeed James M. Langrock.
Mr. Idrovo, age 51, has served as Chief Accounting Officer of The Hershey
Company, a global producer of chocolate, sweets, mints, gum and other snacks,
since August 2015, with responsibilities including all aspects of the
accounting, tax and treasury functions, including external reporting, operation
of internal controls over financial reporting, and financial reporting. Prior to
becoming Chief Accounting Officer, Mr. Idrovo served as Senior Vice President,
Finance and Planning from 2011 to August 2015 and as Senior Vice President,
Strategy and Business Development from 2008 to 2011. Prior to joining The
Hershey Company, Mr. Idrovo served in various roles of increasing responsibility
at Dole Food Company, a global producer and marketer of fruit and vegetables,
from 2001 to 2008, most recently serving as President of Dole Packaged Foods
from 2006 to 2008. Prior to that, Mr. Idrovo served in various roles of
increasing responsibility at The Boston Consulting Group, Inc. from 1990 to 1993
and from 1995 to 2001.
In connection with Mr. Idrovo's appointment, the Company and Mr. Idrovo entered
into an Offer Letter (the "Offer Letter") that provides for an annual base
salary of $550,000. Mr. Idrovo will be eligible to receive annual incentive
awards, with a target award for fiscal year 2020 of 85% of his annual base
salary, prorated based on the Start Date. Mr. Idrovo will also receive an award
of performance share units under the Company's 2019-2021 Long-Term Incentive
Plan (the "2019-2021 LTIP"), with a target of 100,000 shares (the "LTIP PSU
Award"), representing Mr. Idrovo's long-term incentive opportunity for fiscal
years 2020 and 2021. The LTIP PSU Award will vest based on the achievement of
pre-established 3-year compound annual Total Shareholder Return goals over the
performance period from November 6, 2018 to November 6, 2021, mirroring the
performance goals and other terms and conditions for awards made to other
executive officers under the 2019-2021 LTIP. Total shares earned under the LTIP
PSU Award will range from 0% to 300% of the target number of shares. Beginning
in fiscal year 2022, Mr. Idrovo will be eligible to receive additional long-term
The Offer Letter also provides for the following one-time compensation, intended
to recognize the compensation Mr. Idrovo is forfeiting from his current employer
to join the Company:
•Signing award of restricted stock units, valued at $1,300,000 based on the
closing price of the Company's common stock on the Start Date, vesting in two
equal annual installments.
•Signing award of performance share units, with the target number of shares
equal to $1,000,000 divided by the closing price of the Company's common stock
on the Start Date (the "Sign-On PSU Award"). The performance goals and other
terms and conditions of the Sign-On PSU Award will mirror those of the LTIP PSU
Award. Total shares earned under the Sign-On PSU Award will range from 0% to
300% of the target number of shares.
•Signing bonus of $500,000 in cash, subject to prorated repayment in the event
that, within the first 24 months of his employment, Mr. Idrovo voluntarily
terminates his employment or is terminated for cause, as determined by the
Compensation Committee of the Board in good faith.
Pursuant to the terms of the Offer Letter, if the Company terminates Mr.
Idrovo's employment without cause, as determined by the Compensation Committee
of the Board in good faith, Mr. Idrovo will be entitled to receive severance in
an amount equal to one times his base salary in effect at the time of
termination and one times his target annual incentive award for the year in
which the termination occurs, payable over 12 months following termination.
Mr. Idrovo will receive a Change in Control Agreement on the Company's standard
form, providing for severance if his employment is terminated without Cause or
for Good Reason (as those terms are defined in the agreement) within 12 months
following a Change in Control (as defined in the agreement). In that event, the
amount of severance would be two times the sum of Mr. Idrovo's base salary and
target annual incentive award, payable over two years following termination,
subject to the execution of a release and certain other conditions.
A copy of the press release announcing Mr. Idrovo's appointment is attached
hereto as Exhibit 99.1.
Departure of James M. Langrock
On November 7, 2019, the Company announced that James M. Langrock, Executive
Vice President and Chief Financial Officer, is being succeeded by Javier Idrovo
effective December 2, 2019. Mr. Langrock will remain at the Company through
December 31, 2019 to assist with the transition of his responsibilities and
support other Company initiatives.
In connection with his departure, Mr. Langrock is expected to enter into a
separation agreement, pursuant to which he will be entitled to receive (1) cash
severance of $1,650,000, paid in bi-weekly installments during the 12 months
following his departure and (2) health and welfare benefits for a period of 18
months. In addition, in accordance with Mr. Langrock's restricted stock award
agreements, the vesting of 17,202 shares of restricted stock will accelerate
upon his departure. Mr. Langrock's performance share units under the 2019-2021
LTIP will be forfeited.
A copy of the press release announcing Mr. Langrock's departure is attached
hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
Exhibit No. Description
99.1 Press Release of The Hain Celestial Group, Inc. dated November 7, 2019.
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