Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On May 6, 2020, Daseke, Inc. (the "Company") appointed Rick Williams, age 54, as
the Chief Operating Officer ("COO") of the Company to replace Chris Easter, who
continues to serve the Company as Chief Executive Officer and as a member of the
Board of Directors.
Mr. Williams has worked in the trucking industry for over 34 years and has
served in every operational role within the industry. From 1992 until his
appointment as COO of the Company, Mr. Williams served as Chief Executive
Officer and Chief Operating Officer of Central Oregon Truck Company ("COTC"), a
North American truckload carrier and logistics service provider and a subsidiary
of the Company. From 1992 to 2018, Mr. Williams also served COTC as President.
Prior to that, Mr. Williams served as General Manager of a family run truckload
carrier from 1986 to 1992. Mr. Williams is an active member of the Truckload
Carriers Association (TCA) and the American Trucking Associations (ATA).
There are no family relationships between Mr. Williams and any director or
executive officer of the Company that are required to be disclosed pursuant to
Item 401(d) of Regulation S-K. There are no transactions between the Company and
Mr. Williams that would require disclosure under Item 404(a) of Regulation S-K,
except that Mr. Williams' son, Luke Williams, serves as President of COTC, which
is a subsidiary of the Company, and in such capacity, received a total of
$250,000 in compensation in 2019 and participates in benefit plans generally
available to COTC's employees.
In connection with Mr. Williams' appointment as the Company's COO, on May 6,
2020, he and the Company entered into an Employment Agreement (the "Employment
Agreement"). Also on May 6, 2020, in connection therewith, Mr. Williams was
granted (1) a non-qualified option award with respect to 260,900 shares of the
Company's common stock (the "Target Award" and, the agreement memorializing such
award, the "Target Award Agreement"); (2) a performance stock unit award with
respect to 453,200 shares of the Company's common stock (the "Turn-Around Award"
and, the agreement memorializing such award, the "Turn-Around Award Agreement");
and (3) a non-qualified option award agreement with respect to 310,600 shares of
the Company's common stock (the "Promotion Award" and, the agreement
memorializing such award, the "Promotion Award Agreement"), which were approved
by the Compensation Committee of the Board of Directors of the Company.
The Employment Agreement provides that (1) Mr. Williams will serve as the
Executive Vice President and COO of the Company and will perform the duties
assigned to him by the Company's Board of Directors or the Company's Chief
Executive Officer or their respective designees; (2) Mr. Williams' employment
will be on an at-will basis and there will be no fixed employment period; (3)
Mr. Williams will be entitled to an annualized base salary of $525,000; (4) Mr.
Williams will be eligible to earn an annual discretionary bonus with target
value of 75% of his base salary; (5) Mr. Williams will be eligible to
participate in the Company's 2017 Omnibus Incentive Plan, as amended (the
"Plan"), with a target annual award having a grant date fair value equal to 80%
of Mr. Williams' base salary (with the Target Award constituting such award for
2020); (6) Mr. Williams will receive the Turn-Around Award; (7) Mr. Williams
will receive the Promotion Award; and (8) Mr. Williams will be entitled to
receive a $300,000 retention award in cash if the Employment Agreement has not
been terminated as of May 6, 2023.
Under the Employment Agreement, if Mr. Williams' employment is terminated by the
Company without Cause (as defined in the Employment Agreement) or if Mr.
Williams resigns for Good Reason (as defined in the Employment Agreement), Mr.
Williams will be entitled to, subject to his execution and non-revocation of a
release of claims against the Company: (1) a severance amount equal to the sum
of (A) 18 months of base salary plus (B) a pro rata portion of his target annual
bonus for the year in which he is terminated; (2) up to 18 months of
Company-subsidized COBRA coverage; and (3) the accelerated vesting of any
outstanding equity awards, with performance-based conditions vesting on actual
achievement of the applicable performance-based conditions, except for the
Target Award, the Turn-Around Award and the Promotion Award, which provide for
accelerated vesting in the circumstances described below. If Mr. Williams
terminates the Employment Agreement for convenience after May 6, 2023, the
Company may elect to pay Mr. Williams a severance payment equal to his monthly
base salary for up to 18 months in order to extend the Prohibited Period (as
defined in the Employment Agreement). If Mr. Williams' employment is terminated
due to his death or disability, he will be entitled to, subject to his execution
and non-revocation of a release of claims against the Company: (i) a pro rata
portion of his target annual bonus for the year in which he is terminated; and
(ii) the accelerated vesting of any outstanding equity awards that would have
vested in the year of termination, with performance-based conditions vesting on
actual achievement of the applicable performance-based conditions, except for
the Target Award, the Turn-Around Award and the Promotion Award, which provide
for accelerated vesting in the circumstances described below.
The Employment Agreement also entitles Mr. Williams to the Company's customary
employee benefits and bounds him to restrictive covenants regarding
confidentiality, non-competition and non-solicitation, and the Company's
ownership of intellectual property.
The Target Award Agreement provides for non-qualified stock options to purchase
up to 260,900 shares of the Company's common stock, with an exercise price of
$1.41 per share (the closing price of the Company's common stock on May
6, 2020), which options are scheduled to vest in three equal annual
installments, subject to Mr. Williams' continued employment. The unvested
portion of the Target Award will become vested in full upon (1) a Change in
Control (as defined in the Plan) if no replacement award is provided; (2) Mr.
Williams' termination without Cause (as defined in the Employment Agreement); or
(3) Mr. Williams' resignation for Good Reason (as defined in the Employment
Agreement). If Mr. Williams' employment terminates due to his death or
disability, the unvested portion of the Target Award that would have vested in
the year of termination will become vested.
The Turn-Around Award Agreement provides for 453,200 performance stock units
that are eligible to vest at the end of a three-year performance period subject
to the achievement of specified stock price hurdles and Mr. Williams' continued
employment. Upon (1) a Change in Control (as defined in the Plan) if no
replacement award is provided; (2) Mr. Williams' termination without Cause (as
defined in the Employment Agreement); (3) Mr. Williams' resignation for Good
Reason (as defined in the Employment Agreement); or (4) Mr. Williams' death or
disability, the Turn-Around Award will vest based on actual achievement of the
applicable performance-based conditions.
The Promotion Award Agreement provides for non-qualified stock options to
purchase up to 310,600 shares of the Company's common stock, with an exercise
price of $1.41 per share (the closing price of the Company's common stock on May
6, 2020), which options are scheduled to vest in three equal annual
installments, subject to Mr. Williams' continued employment. The unvested
portion of the Promotion Award will become vested in full upon (1) a Change in
Control (as defined in the Plan) if no replacement award is provided; (2) Mr.
Williams' termination without Cause (as defined in the Employment Agreement); or
(3) Mr. Williams' resignation for Good Reason (as defined in the Employment
Agreement). If Mr. Williams' employment terminates due to his death or
disability, the unvested portion of the Promotion Award that would have vested
in the year of termination will become vested.
If the Plan does not contain a sufficient number of shares to cover the
Company's obligations under the Target Award, Turn-Around Award or Promotion
Award, the awards will be settled in cash.
The foregoing descriptions of the material terms of the Employment Agreement,
Target Award Agreement, Turn-Around Award Agreement and Promotion Award
Agreement are not complete and are qualified in their entirety by reference to
the full text of the Employment Agreement, Target Award Agreement, Turn-Around
Award Agreement and Promotion Award Agreement, which will be filed as exhibits
to the Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2020.
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