Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Resignation and Appointment of Chief Financial Officer and Treasurer
Appointment of Chief Executive Officer and President
On November 14, 2022, the Company announced that the Board of Directors (the
"Board") of the Company appointed Jonathan Batarseh, age 47, as Chief Executive
Officer and President of the Company, effective immediately after the filing of
the Company's third quarter 2022 Form 10-Q (the "Start Date"). The appointment
is in conjunction with the announcement that Scott Sewell has resigned as the
Company's President and Chief Executive Officer and as a member of the Company's
Board, effective as of the filing of the Company's third quarter 2022 Form 10-Q.
Mr. Sewell's resignation was not the result of any disagreement with the Company
on any matter relating to the Company's financials, operations, policies, or
practices. In addition, on November 14, 2022, the Board appointed Mr. Batarseh
to serve as a member of the Board effective on November 15, 2022.
Mr. Batarseh is a licensed Certified Public Accountant (CPA) with more than 20
years of corporate finance and accounting experience in the engineering and
construction industries. He joins the Company from Brown & Root Industrial
Services, a partnership between KBR (NYSE: KBR) and Bernhard Capital Partners
(BCP) providing engineering, procurement, and construction services, where he
was CFO for six years, responsible for overseeing all financial management and
reporting, treasury, and information technology and services, and where he also
served as Vice President in the finance organization of KBR for two years.
Previously, Mr. Batarseh served in senior financial leadership roles in various
industrial service companies including The Shaw Group, four years, and Atkins,
one year, following 10 years at KPMG serving clients in the manufacturing and
industrial sectors. Mr. Batarseh received his Bachelor of Science degree in
accounting from Louisiana State University and is a member of the Society of
Louisiana CPAs and the Tax Executives Institute.
There are no arrangements or understandings between Mr. Batarseh and any other
persons, pursuant to which he was appointed to the offices described above and
no family relationships among any of the Company's directors or executive
officers and Mr. Batarseh. Additionally, Mr. Batarseh does not have any direct
or indirect interest in any transaction that would require disclosure pursuant
to Item 404(a) of Regulation S-K.
Appointment of Chief Financial Officer and Treasurer
On November 14, 2022, the Company announced that the Board appointed Joe
Skidmore, age 37, as Chief Financial Officer and Treasurer of the Company,
effective on the Start Date. Also, effective as of the Start Date, Mr. Skidmore
will serve as the Principal Financial Officer and Principal Accounting Officer
of the Company. In connection with his appointment, the Company will enter into
its standard indemnification agreement with Mr. Skidmore, the form of which was
filed as Exhibit 10.1 to the Company's Registration Statement on Form S-1 filed
with the Securities and Exchange Commission on May 18, 2018.
Mr. Skidmore is a licensed Certified Public Accountant (CPA). Mr. Skidmore
joined the Company in 2018. Having been promoted with increasing responsibility,
he served as Corporate Controller for the past two years. Prior to joining the
Company, Mr. Skidmore worked at KPMG in audit for close to a decade. He began
his career in tax with positions at Yum! Brands and Jones, Nale & Mattingly. Mr.
Skidmore earned his Bachelor of Science degree in accounting and finance from
University of Louisville.
There are no arrangements or understandings between Mr. Skidmore and any other
persons, pursuant to which he was appointed to the offices described above and
no family relationships among any of the Company's directors or executive
officers and Mr. Skidmore. Additionally, Mr. Skidmore does not have any direct
or indirect interest in any transaction that would require disclosure pursuant
to Item 404(a) of Regulation S-K.
Appointment of Executive Chairman of the Board and Additional Directors
On November 14, 2022, the Board approved an increase in the size of the Board
from nine to ten members effective November 15, 2022.
On November 14, 2022, the Board appointed Robert "Bob" Decensi to the Board as a
Class I director and as Executive Chairman of the Board, replacing Jack
Blossman, Jr., effective on November 15, 2022, with a term expiring at the
Company's 2025 Annual Meeting of Stockholders. Mr. Decensi was recently the CEO
and Board member of BHI Energy, a utility service company that provides
engineering, construction, and maintenance to the power generation and power
delivery markets. Prior joining BHI Energy, Mr. Decensi spent 18 years in the
utility power generation and power delivery business filling positions in both
middle and senior level management. He has worked for several of the largest
U.S. blue-chip utilities, including Northeast Utilities, Dominion Energy,
Connecticut Light & Power, and Entergy. During his utility tenure, he was part
of two major power plant recovery efforts with Northeast Utilities and Entergy.
Mr. Decensi served on the Board of Directors for NEI (Nuclear Energy Institute)
and has served in several capacities supporting the Institute of Nuclear Power
Operations (INPO). He is a graduate of Millersville University of Pennsylvania
and attended the University of New Haven Executive MBA Program. Mr. Decensi was
nominated to the Board by Bernhard Capital Partners Management LP ("BCP")
pursuant to its rights under the Series B Preferred Stock Purchase Agreement
dated as of November 14, 2022, by and among the Company and Charah Preferred
Stock Aggregator, LP. Additionally, there are no transactions involving the
Company and Mr. Decensi that the Company would be required to report pursuant to
Item 404(a) of Regulation S-K.
In connection with his election, Mr. Decensi will be compensated in accordance
with the Company's standard compensation arrangements for the Chairman of the
Board. In connection with his appointment, the Company will enter into its
standard indemnification agreement with Mr. Decensi, the form of which was filed
as Exhibit 10.1 to the Company's Registration Statement on Form S-1 filed with
the Securities and Exchange Commission on May 18, 2018. In addition to his
compensation as Chairman of the Board and connection with his services as
Executive Chairman, the Company expects to enter into a compensation agreement
with Mr. Decensi. The terms of the compensation agreement are currently being
finalized and will be included in a subsequent Current Report on Form 8-K.
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On November 14, 2022, L.W. "Bill" Varner, upon the nomination of B. Riley as the
B. Riley Nominee under its Investor Rights Agreement, was appointed to the
Board, effective on November 14, 2022, as a Class I Director with a term
expiring at the Company's 2025 Annual Meeting of Stockholders. Mr. Varner was
most recently the CEO and Board member of Select Interior Concepts, a premier
installer and nationwide distributor of interior products, leading the company
from June 2020 to October 2021 and successfully taking the public company
private with a divestiture to Sun Capital Partners. Previously, Mr. Verner was
CEO of United Subcontractors, Inc. (USI), the third largest insulation services
provider in the United States, from July 2012 to May 2018. During his tenure, he
led a transformation of the business through organic growth and strategic M&A
that resulted in USI achieving double digit EBITDA margins and an eventual sale
of the business, creating significant value for shareholders. From 2004 to 2012,
Mr. Varner served as President and CEO of Aquilex Corporation, a leading
provider of specialty services to the energy sector. Under his leadership, the
company grew revenues by fivefold and achieved record earnings. Prior to joining
Aquilex in 2004, Mr. Varner served as President for several global businesses in
various equipment/component manufacturing and service industries, orchestrating
their growth in new markets through expansion of service and product offerings.
He is a graduate of The Citadel in Charleston, South Carolina, and has served on
various philanthropic, industry, and community boards. Currently, Mr. Varner
serves on the board of directors for Acousti Engineering, Strada Services, and
Outdoor Living Supply.
In connection with his appointment, Mr. Varner will be compensated in accordance
with the Company's standard compensation arrangements for non-employee
directors. There are no other related party transactions between the Company and
Mr. Varner that would require disclosure under Item 404(a) of Regulation S-K. In
connection with his appointment, the Company will enter into its standard
indemnification agreement with Mr. Varner, the form of which was filed as
Exhibit 10.1 to the Company's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on May 18, 2018.
In connection with Mr. Sewell's departure from the Company, the Company entered
into a Separation Agreement and General Release of Claims (the "Separation
Agreement") with Mr. Sewell. Under the Separation Agreement, Mr. Sewell will (1)
be paid a Severance Payment amount of $1,120,000, representing 24 months of
annual base salary which will be paid out over 24 months, (2) a lump sum
Additional Severance Payment of $560,000 to be paid out on the date of the first
regular payroll payment date after the second anniversary of the Separation
Date, (3) pro-rata vesting of his then-outstanding restricted stock units, and
(4) pro-rata vesting of this then-outstanding performance stock units. The
Severance Payment and Additional Severance Payment are subject to tax
withholding requirements. Mr. Sewell will also be eligible to receive
reimbursement from the Company of monthly premium amounts for COBRA premiums for
18 months following the Separation Date.
The foregoing summary of the material terms of the Separation Agreement is
subject to the complete provisions set forth in the Separation Agreement, a copy
of which is filed with this report as Exhibit 10.1 and incorporated herein by
reference.
On November 14, 2022, the Company issued a press release announcing the above
discussed issues. That press release is attached to this report as Exhibit 99.1.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
As previously disclosed, the Company entered into the Term Loan Agreement (the
"Term Loan Agreement") by and among Gibbons Creek Environmental Redevelopment
Group, LLC, a Texas limited liability company (the "Term Loan Borrower"), as
borrower, the Company and Charah, LLC, a Kentucky limited liability company
("Charah, LLC"), as guarantors, and Charah Preferred Stock Aggregator, LP, a
Delaware limited partnership, as lender. The Term Loan Agreement provides for a
delayed-draw term loan in an aggregate principal amount of $20.0 million.
Borrowings under the Term Loan Agreement accrue interest at a percentage per
annum equal to 12.0%, with interest payments due on the first business day of
each calendar quarter following the effective date of the Term Loan Agreement,
and on the maturity date.
On November 8, 2022, the Company elected to draw down $4.0 million of the Term
Loan Agreement to fund operating activities. Immediately following this
drawdown, $20.0 million of aggregate loans were outstanding and no borrowing
capacity remained available under the Term Loan Agreement, representing the
Company's total borrowing capacity under all current long-term financing
arrangements at that time. Prior to the drawdown, on October 28, 2022, the
parties Amended the Term Loan Agreement to extend the availability date until
November 15, 2022.
The foregoing description of the Term Loan Agreement is qualified in its
entirety by reference to the full text of such agreement which was filed as
Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on August
15, 2022. The foregoing summary of the material terms of the Amendment No. 1 to
the Term Loan Agreement ("Amendment") is subject to the complete provisions set
forth in the Amendment, a copy of which is filed with this report as Exhibit
10.2 and incorporated herein by reference.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Separation Agreement and General Release of Claims, dated November
14, 2022
10.2 Amendment No. 1 to the Term Loan Agreement, dated October 28, 2022
99.1 Press Release, dated November 14, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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