Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 27, 2023, Lawson Products, Inc., an Illinois corporation (the
"Company"), a wholly-owned subsidiary of Distribution Solutions Group, Inc., a
Delaware corporation (the "Registrant"), entered into an Employment Agreement
with Ronald J. Knutson to serve as the Executive Vice President and Chief
Financial Officer of the Registrant and the Executive Vice President and Chief
Financial Officer of the Company. Pursuant to the Employment Agreement,
Mr. Knutson is entitled to receive a base salary of $435,000 per annum. The base
salary may be increased by the Compensation Committee of the Registrant's Board
of Directors. Mr. Knutson will be employed on an "at will" basis, and his
employment may be terminated at any time at the option of the Company or
Mr. Knutson, on the terms and subject to the conditions set forth in the
Employment Agreement. Mr. Knutson will also be eligible for additional
performance based compensation, at an annual target payout level of no less than
80% of his base salary, based upon his ability to meet or exceed the targeted
expectations applicable to his position, as the Committee determines and in
accordance with and subject to the terms of any applicable performance based
compensation plan or program.
If Mr. Knutson's employment is terminated by the Company for Cause (as defined
in the Employment Agreement) or by Mr. Knutson voluntarily (other than for Good
Reason (as defined in the Employment Agreement)), Mr. Knutson shall be entitled
to receive Accrued Compensation (as defined in the Employment Agreement).
If Mr. Knutson's employment is terminated by the Company without Cause, or if
Mr. Knutson's employment is terminated due to his death or Disability (as
defined in the Employment Agreement) or by Mr. Knutson for Good Reason,
Mr. Knutson will be entitled to receive (A) Accrued Compensation, (B) an amount
equal to two years' of Mr. Knutson's then current base salary, payable monthly
over a period of two years, and (C) continued health plan coverage for
Mr. Knutson and his spouse and dependents during the Severance Period (as
defined in the Employment Agreement), at their cost.
The receipt of the termination benefits described above in the case of a
termination of Mr. Knutson's employment by the Company without Cause or by
Mr. Knutson for Good Reason, other than Accrued Compensation, is conditioned
upon Mr. Knutson's execution and delivery of a release in the form specified by
the Employment Agreement. Mr. Knutson is subject to non-compete and
non-solicitation obligations for a period of eighteen months following the date
of his termination of employment.
In addition to the foregoing, the Employment Agreement for Mr. Knutson provides
that Mr. Knutson shall be entitled to a grant of 10,000 Restricted Stock Units,
which will vest in 20% installments on each of January 27, 2024, April 1, 2024,
April 1, 2025, April 1, 2026, and April 1, 2027, respectively, subject in all
respects to the terms and conditions of the applicable RSU Award Agreement and
the Distribution Solutions Group, Inc. Equity Compensation Plan (as amended and
restated effective October 17, 2022, as amended November 10, 2022, and as the
same may be further amended from time to time, the "Equity Compensation Plan").
Mr. Knutson will also be entitled to a grant of 123,000 Options to acquire
shares of Common Stock of the Registrant at the following exercise prices: (A)
48,000 Options with an exercise price of $55.00 per share; (B) 15,000 Options
with an exercise price of $80.00 per share; (C) 30,000 Options with an exercise
price of $110.00 per share; and (D) 30,000 Options with an exercise price of
$140.00 per share. Each of the four tranches of Options will vest in 20%
installments on each of January 27, 2024, April 1, 2024, April 1, 2025, April 1,
2026, and April 1, 2027, respectively, subject in all respects to the terms and
conditions of the applicable Option Award Agreement and the Equity Compensation
Plan. Subject to the terms of the Option Award Agreement, the Options will
expire on the 10-year anniversary of the grant date.
The foregoing description of the Employment Agreement does not purport to be
complete and is qualified in its entirety by reference to the Employment
Agreement, which is attached to this Current Report as Exhibit 10.1 and hereby
incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Exhibit Description
10.1 Employment Agreement, dated as of January 27, 2023, by and between
Lawson Products, Inc., an Illinois corporation, and Ronald J. Knutson.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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