Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Executive Leadership Succession Plan
On March 28, 2022, Delek US Holdings, Inc. (the "Company") announced a CEO
succession plan under which Ezra Uzi Yemin, the Company's current President and
Chief Executive Officer, will become Executive Chairman of the Board of
Directors (the "Board"). Under the succession plan, the Board has approved the
appointment of Avigal Soreq as the next President and Chief Executive Officer of
the Company, to be effective in June 2022.
Mr. Soreq, age 44, has been the Chief Executive Officer of El Al Israel
Airlines, the national airline of Israel, since January 2021. Prior to that, he
served as a member of the Company's executive management team, including as the
Chief Operating Officer from March 2020 until January 2021, its Chief Commercial
Officer from November 2016 until March 2020, an Executive Vice President from
August 2015 until January 2021, and a Vice President from 2012 until 2015. In
addition, Mr. Soreq served as an Executive Vice President of Delek Logistics GP,
LLC from 2015 until 2021, and as its Vice President from 2012 until 2015. Prior
to joining the Company, Mr. Soreq worked for SunPower Corporation (NASDAQ:
SPWR), and previously as a senior finance and business consultant for Trabelsy &
Co., and as a consultant in the corporate finance department for KPMG's Tel-Aviv
office. His past experience includes service in the Israeli Air Force in various
roles between 1996 and 2004, where he reached the rank of Major. Mr. Soreq is a
certified public accountant in Israel.
Additional Leadership Appointments
Effective March 27, 2022, the Board named Todd O'Malley the Chief Operating
Officer of the Company. Mr. O'Malley has served as an Executive Vice President
and the Chief Commercial Officer of the Company since March 2021. From January
2018 until February 2021, Mr. O'Malley served as President of TKO Energy
Enterprises, Inc., an advisory services firm specializing in the petrochemical
and renewable energy industries. From April 2020 until February 2021,
Mr. O'Malley served as President and CEO of Citizens Companies, a consulting and
investment concern active in the petrochemical and renewable energy industries.
Mr. O'Malley previously served as the EVP and Chief Commercial Officer of Gulf
Oil LP, President of the general partner of PBF Logistics LP, a master limited
partnership active in the midstream sector of the oil and gas industry, as well
as positions of increasing responsibility at PBF Energy, Inc.
The Company also announced that it has named Nithia Thaver an Executive Vice
President and the Company's President of Refining. Mr. Thaver has served as the
Company's Senior Vice President, Refining, since December 2018. From 2017 to
2018, Mr. Thaver served as the Senior Vice President, Strategy and Business
Development, of Philadelphia Energy Solutions, which owned and operated a
refinery. Prior to that, Mr. Thaver held positions of increasing responsibility
at several companies in the oil and gas industry, including Sunoco,
ConocoPhillips, and ExxonMobil.
Independent Director Appointment
On March 27, 2022, the Board appointed Leonardo Moreno as a director of the
Company's Board, effective immediately. Mr. Moreno will stand for election at
the Company's 2022 annual meeting of stockholders. Mr. Moreno will hold office
until his successor is duly elected and qualified, or earlier termination of his
service. The Board has not yet appointed Mr. Moreno to any Board committees.
There are no arrangements or understandings between Mr. Moreno and any other
persons pursuant to which he was selected as a director of the Company.
Mr. Moreno has not been a party to any transactions required to be reported
under Item 404(a) of Regulation S-K in this Current Report on Form 8-K.
Effective as of the effective date of his appointment to the Board, Mr. Moreno
will receive compensation consistent with the Company's compensation program for
non-employee directors.
Compensation Arrangements
Mr. Yemin
In connection with the transition of Mr. Yemin to Executive Chairman of the
Board, the Company entered into two agreements with Mr. Yemin. The first is an
amendment to Mr. Yemin's existing employment agreement that terminates his
employment agreement on the date he becomes Executive Chairman of the Board (the
"Effective Date"); provided, however, that the accelerated vesting provisions
for equity awards under his current employment agreement will be preserved
through Mr. Yemin's tenure as Executive Chairman of the Board.
The second agreement entered into with Mr. Yemin in connection with this
transition is a new Executive Chairman Agreement. Under the Executive Chairman
Agreement, Mr. Yemin will serve as the Executive Chairman of the Board and be
entitled to receive a base salary of $800,000 through the period ending 12
months after the Effective Date and base salary of $500,000 through the period
beginning on the one year anniversary of the Effective Date and ending
December 31, 2023, provided that he continues to be elected as a member of the
Board. Through the period ending December 31, 2023, Mr. Yemin will be eligible
to receive an annual target bonus of 140% of the base salary in effect for the
calendar year in which such bonus is payable. If at any time during the period
ending December 31, 2025, Mr. Yemin ceases to be a
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member of the Board, he will serve as an advisor to the Company's Chief
Executive Officer and the Board on mutually agreeable terms to be determined in
good faith and will receive competitive market compensation for such services.
If Mr. Yemin's employment as Executive Chairman is terminated by the Company or
its stockholders, or by Mr. Yemin for "Good Reason" as defined in the Executive
Chairman Agreement, prior to January 1, 2024, he will be entitled to receive a
severance payment equal to the sum of his remaining base salary and target bonus
for the period ending December 31, 2023, payable in accordance with the regular
payroll practice of the Company. He will also be entitled to the costs of
continuing family health insurance under COBRA for 18 months. Mr. Yemin would
not be entitled to accelerated vesting upon a termination of employment provided
he continues providing advisory services. In the event of a termination due to
death or "Disability" as defined in the Executive Chairman Agreement, Mr. Yemin
will be entitled to the benefits currently provided under his employment
agreement. To the extent (a) the Company does not engage Mr. Yemin as an advisor
to the Chief Executive Officer of the Company and the Board on mutually
agreeable terms to be determined in good faith by both parties, or (b) such
advisory relationship is terminated by the Company without "Cause," his
time-vesting awards will become 100% vested upon his termination of service and
his performance-based awards will vest pursuant to actual performance at the end
of the performance period applicable to such awards without pro ration.
Mr. Soreq
In connection with the appointment of Mr. Soreq as Chief Executive Officer of
the Company effective as of the Effective Date, the Company and Mr. Soreq
entered into an employment agreement with a fixed term ending on June 12, 2026.
Mr. Soreq's employment agreement does not contemplate automatic extension. In
addition, the failure to renew Mr. Soreq's employment agreement will not
constitute an event that triggers severance payments. Under Mr. Soreq's
employment agreement, Mr. Soreq will be entitled to an annual base salary of
$800,000 and his annual target bonus will be 140% of his base salary, with a
maximum payout opportunity of 200% of the target amount. Mr. Soreq's employment
agreement also provides that Mr. Soreq is eligible for annual grants under the
Company's 2016 Long-Term Incentive Plan in a target amount of at least
$3,000,000 per year split evenly between time-vested RSUs and performance-based
PSUs. Mr. Soreq's employment agreement includes a noncompetition clause which
provides that Mr. Soreq will not compete with the Company, directly or
indirectly, in the geographic area defined in the agreement during its term and
for one year thereafter. Mr. Soreq's employment agreement also includes
non-solicitation provisions with respect to the customers and employees of the
Company during the term of the agreement and for one year thereafter. In
addition to benefits available to the Company's senior executive officers
generally, Mr. Soreq's employment agreement also provides reimbursement for the
reasonable costs of professional preparation of his personal income tax returns,
not to exceed $25,000 in any calendar year, and a Company provided car.
In the event Mr. Soreq is terminated without "Cause" (as defined in Mr. Soreq's
employment agreement) or terminates his employment with "Good Reason" (as
defined in Mr. Soreq's employment agreement), Mr. Soreq would be entitled to
(i) an amount equal to two times the sum of his then-current base salary and
target annual bonus as in effect immediately before any notice of termination,
(ii) the costs of continuing family health insurance coverage for 18 months
following termination of employment, (iii) any annual bonus Mr. Soreq would have
otherwise been entitled to if his employment had continued through the end of
the bonus year based upon the actual performance of the Company, prorated for
the period of actual employment during the bonus year, and (iv) the immediate
vesting of all unvested equity awards as follows: (A) for unvested performance
. . .
Item 7.01 Regulation FD Disclosure.
A copy of the Company's press release announcing the executive leadership
changes discussed above is attached to this Current Report on Form 8-K as
Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01 is being furnished, not filed, pursuant to
Regulation FD. Accordingly, the information in Item 7.01 of this report will not
be incorporated by reference into any registration statement filed by the
Company under the Securities Act of 1933, as amended, unless specifically
identified therein as being incorporated therein by reference. The furnishing of
the information in this report is not intended to, and does not, constitute a
determination or admission by the Company that the information in this report is
material or complete, or that investors should consider this information before
making an investment decision with respect to any security of the Company or any
of its affiliates.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release issued March 28, 2022.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
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