Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
Chief Executive Officer Succession
The Company has implemented its CEO succession plan consistent with the
disclosures made in Item 5.02 of the Company's Form 8-K filed September 12, 2022
and described in the Company's Proxy Statement dated December 14, 2022.
Effective December 31, 2022, the Company's Chairman, Chief Executive Officer and
President, Victor L. Richey, retired as Chief Executive Officer and President.
Effective January 1, 2023 Mr. Richey, a current director, assumed the position
of Executive Chairman of the Board of Directors.
Mr. Richey and the Company entered into an Amendment of Mr. Richey's Employment
Agreement effective December 31, 2022, which provides that Mr. Richey will
remain as an employee and director of the Company with the title of Executive
Chairman during a transition period ending not later than December 31, 2023.
Effective January 1, 2023, Mr. Richey's base salary was adjusted to an annual
rate of $650,000, to be prorated over the length of the transition period. The
form of Amendment to Mr. Richey's Employment Agreement is attached hereto as
Exhibit 10.1.
Mr. Richey will continue to participate in the Company's Performance
Compensation Plan (PCP) until the end of the transition period. For the first
quarter of fiscal 2023, which ended December 31, 2022, Mr. Richey's 2023 cash
incentive target remained at his fiscal 2022 target of $959,500, to be prorated
for the first quarter of fiscal 2023; and beginning January 1, 2023 Mr. Richey's
2023 cash incentive target was reduced to $487,500, to be prorated from January
1, 2023 until the end of the transition period.
Mr. Richey also received a one-time award of 17,241 restricted stock units
(RSUs), which is $1,500,000 divided by the Company's closing stock price of
$87.00 per share on January 3, the first trading day of January. The award will
vest on December 31, 2023 and be distributed in shares at the beginning of 2024.
It is subject to a non-compete covenant ending two years after the distribution
date and other conditions, including potential clawbacks, similar to those in
the Company's standard RSU awards. The form of Mr. Richey's RSU award is
attached hereto as Exhibit 10.2.
On January 1, 2023, Bryan H. Sayler succeeded to the offices of Chief Executive
Officer and President of the Company. Mr. Sayler has entered into an employment
and compensation agreement with the Company on terms consistent with those
described in the Company's Form 8-K filed September 12, 2022. The form of Mr.
Sayler's Employment Agreement is attached hereto as Exhibit 10.3.
Increase in Size of Board of Directors; New Director
Pursuant to the previous actions of the Company's Board of Directors and
consistent with the disclosures made in Item 5.02 of the Company's Form 8-K
filed September 12, 2022, effective January 1, 2023 the authorized size of the
Company's Board of Directors was increased from eight to nine members, and Bryan
H. Sayler became a Class I director of the Company filling the vacancy thereby
created, to serve for a term ending at the 2024 annual meeting of shareholders.
As stated above, effective January 1, 2023 Victor L. Richey, assumed the
position of Executive Chairman of the Board. James M. Stolze remains in his
current position as Lead Director.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description of Exhibit
10.1 Amendment to Employment Agreement of Victor L. Richey
effective December 31, 2022
10.2 Transition Award Agreement with Victor L. Richey effective
January 3, 2023
10.3 Employment and Compensation Agreement with Bryan H. Sayler
effective January 1, 2023
104 Cover Page Inline Interactive Data File
Any references to the Company's web site address included in this Form 8-K and
the press release are intended only as inactive textual references and not as
active links to its web site. Information contained on the Company's web site
does not constitute part of this Form 8-K or the press release.
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