Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 20, 2021, the Compensation Committee of the Company's Board of
Directors approved the granting of retention awards to each of Messrs. Thomas,
Schlater and Duesenberg pursuant to the terms of the cash-based retention
program (the "Retention Program") established in connection with the Company's
May 11, 2021 Merger Agreement with PMHC II Inc. (the "Merger Agreement"). A
summary of the Retention Program, including aggregate payments thereunder, was
previously disclosed in the Company's definitive proxy statement filed with the
Securities and Exchange Commission on July 23, 2021 relating to the special
meeting of Company shareholders at which the Merger Agreement was approved by
shareholders.
The retention awards to Messrs. Thomas, Schlater and Duesenberg will be in the
amounts of $1,693,358, $698,510 and $664,004, respectively, assuming the closing
of the transactions under the Merger Agreement (the "Closing") occurs during the
first quarter of the Company's 2022 fiscal year, as is currently anticipated.
The retention awards will be in lesser amounts in the event that the Closing
occurs during 2021, and the retention awards would increase to $2,023,259,
$834,594 and $793,365, respectively, assuming the Closing does not occur prior
to the second quarter of the Company's 2022 fiscal year. The maximum amounts
payable to the executives under their retention award agreements (based on an
assumed $8 million aggregate retention award pool for all Retention Program
participants if the Closing does not occur prior to the second quarter of 2022)
corresponds to slightly less than 100% of their respective annual total target
cash compensation amounts. The retention awards, which are part of the broader
Retention Program covering up to 40 employees of the Company, are intended to
incentivize and reward the executives for their continued efforts in furtherance
of the contemplated Closing.
In accordance with the terms of the Merger Agreement, 50% of the retention
awards will be payable to the executives immediately following the Closing and
the remaining 50% of the retention awards will be payable 3 months following the
Closing, in each case, subject to the executives' continued employment through
such payment dates (with accelerated payments to be made in the event of the
executives' involuntary termination of employment without cause or termination
of employment for "good reason" as defined in the executives' change in control
protection agreements).
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