Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(b) On August 24, 2021, IAA, Inc. (the "Company") announced that Vance Johnston,
Executive Vice President and Chief Financial Officer, will depart from the
Company on September 1, 2021. In accordance with his employment agreement, a
form of which was previously filed as Exhibit 10.6 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2019 filed with the
Securities and Exchange Commission (the "SEC") on August 13, 2019, contingent
upon Mr. Johnston's execution of a general release agreement, Mr. Johnston will
be entitled to the severance benefits specified therein.
(c) On August 23, 2021, the Company's Board of Directors appointed Susan Healy
as the Company's Chief Financial Officer, effective September 1, 2021. Ms. Healy
will also serve as the Company's principal financial officer.
From September 2016 to January 2021, Ms. Healy, age 55, served as the Senior
Vice President, Finance for Ulta Beauty, a leading U.S. independent beauty
retailer, responsible for corporate strategy, mergers and acquisitions,
financial planning and analysis, treasury and procurement. From September 2012
to September 2016, Ms. Healy was a strategic advisor and Chief Financial Officer
to early-stage, venture-backed companies in the consumer, technology, healthcare
and renewable energy sectors through Ascendancy Advisors, a company she founded.
She has also previously held the role of Chief Financial Officer at several
companies, including Virent Energy Systems and Lands' End. Prior to Lands' End,
Ms. Healy was a Vice President in the Commodities Division at global investment
firm Goldman Sachs, where she also held roles in Corporate Treasury and
Investment Banking.
In connection with her employment, Ms. Healy and the Company entered into an
Employment Agreement (the "Employment Agreement"), pursuant to which Ms. Healy
will receive an annual base salary of $500,000 and will be eligible to receive
an annual incentive bonus at a target bonus level of 75% of base salary (with a
guaranteed minimum bonus of $125,000 for the remainder of 2021). Under the terms
of the Employment Agreement, Ms. Healy will also be eligible to participate in
the Company's 2019 Omnibus Stock and Incentive Plan (the "Plan"). In connection
with Ms. Healy's entry into the employment agreement, she will receive the
following initial grants under the Plan: (1) a grant of restricted stock units
("RSUs") having a grant date value of $120,000, which is intended to serve as a
pro-rata portion of her 2021 annual RSU equity award, (2) a grant of
performance-based restricted stock units ("PRSUs") having a grant date value of
$120,000, which is intended to serve as a pro-rata portion of her 2021 PRSU
award and (3) a one-time grant of RSUs having a grant date value of $260,000.
Ms. Healy is also entitled to receive a relocation benefit payment of $100,000,
which is subject to a clawback obligation in the event of her voluntary
resignation without good reason that lapses ratably over a 2-year period. The
Employment Agreement has a three-year term which will automatically renew for
additional successive one-year terms unless either the Company or Ms. Healy
gives notice of non-renewal within sixty days prior to the end of any applicable
term.
The Employment Agreement provides that if the Company terminates Ms. Healy's
employment without cause or provides notice that the Employment Agreement will
not be extended or further extended, or if Ms. Healy terminates her employment
for good reason (each, a "Qualifying Termination"), she will be entitled to
receive: (i) a severance payment equal to 1.5 times her base salary then in
effect plus her target annual bonus for the year of termination, payable in
substantially equal installments over 12 months, (ii) payment of a pro-rata
portion of any annual bonus actually earned for the year of termination, and
(iii) reimbursement of premiums to continue benefits coverage under COBRA for up
to 18 months.
If, within two years following a change in control of the Company (which has the
same meaning as in the Plan), Ms. Healy experiences a Qualifying Termination,
her severance multiple is increased to 2.5x and all of her outstanding and
unvested equity awards granted under the Plan will receive full accelerated
vesting (with any in-progress performance-based awards to vest at a minimum of
the target performance level).
Ms. Healy's receipt of the severance benefits described above is subject to her
execution of a release of claims in favor of the Company and compliance with the
noncompetition, nonsolicitation, ownership of work product and nondisclosure
restrictions contained in her Employment Agreement.
The foregoing description of the Employment Agreement is qualified in its
entirety by reference to the full text of the Employment Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and which is
incorporated herein by reference.
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The Company also intends to enter into a customary indemnification agreement
with Ms. Healy, the form of which is filed as Exhibit 10.10 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the
SEC on August 13, 2019.
There are no arrangements or understandings between Ms. Healy and any other
persons pursuant to which she was selected as an officer of the Company. There
are also no family relationships between Ms. Healy and any director or executive
officer of the Company and Ms. Healy has no direct or indirect material interest
in any related party transaction required to be disclosed pursuant to Item
404(a) of Regulation S-K.
Item 7.01 Regulation FD Disclosure.
On August 24, 2021, the Company issued a press release announcing the management
changes disclosed in Item 5.02 of this Current Report on Form 8-K.
A copy of the press release is furnished as Exhibit 99.1 hereto. This
information shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and is not incorporated by
reference into any filing of the Company whether made before or after the date
hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibit
No. Description
10.1 Employment Agreement by and between IAA, Inc. and Susan Healy
99.1 Press Release of the Company, dated August 24, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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