Item 5.02 Departure of Directors or Certain Officers: Election of Directors:
Appointment of Certain Officers: Compensatory Arrangements of Certain
Officers.
(c) Appointment of Executive Officers
On July 20, 2021, the board of directors of ModivCare Inc. (the "Company")
appointed Jonathan B. Bush as Senior Vice President, General Counsel and
Secretary of the Company, and Kenneth Shepard as Vice President, Chief
Accounting Officer of the Company.
Mr. Bush, who is 52 years old, has over two decades of in-house and law firm
experience in mergers and acquisitions, securities regulation, corporate
finance, corporate governance, private equity, restructurings, healthcare
regulation, and compliance. Prior to his promotion, Mr. Bush served as the
Company's Vice President, Deputy General Counsel and Assistant Secretary since
November 2019. Previously, from August 2018 to October 2019, he was Vice
President, Corporate Development and Deputy General Counsel at BioSrip, Inc., an
independent provider of infusion and home care management solutions, and prior
to then he held a variety of corporate transaction-oriented roles at the private
law firms of PilieroMazza PLLC, Dechert LLP, Schulte Roth & Zabel LLP, and
Cravath, Swaine & Moore LLP, and in-house at Goldman, Sachs & Co., a global
financial institution that delivers a broad range of financial services across
investment banking, securities, investment management and consumer banking to
its clients. In anticipation of and in connection with his promotion, the
Compensation Committee of the board of directors (the "Compensation Committee"),
on July 19, 2021, authorized an increase in Mr. Bush's (i) annual base salary to
$330,000, (ii) short-term incentive bonus target opportunity to 50% of his
adjusted base salary, and (iii) long-term equity incentive plan award target
opportunity to 50% of his adjusted base salary. The Compensation Committee also
then determined to make in respect of the promotion equity grants under the
Company's 2006 LongTerm Incentive Plan, as amended (the "Plan"), commensurate
with his new role and responsibilities, as follows: (i) 221 restricted stock
units ("RSUs"), with such number determined based on the closing price of the
Company's common stock as listed on the Nasdaq Stock Market on the grant date,
and (ii) an incentive stock option to acquire up to 718 shares of common stock
with an exercise price equal to the closing price of the Company's common stock
as listed on the Nasdaq Stock Market on the grant date. The stock options vest
in three substantially equal annual installments beginning on the first
anniversary of the date of grant and expire on the fifth-year anniversary of the
date of grant. Mr. Bush graduated with an A.B. in Economics from Harvard
University and a J.D. from the University of Texas School of Law.
Mr. Shepard, who is 40 years old, has more than 15 years of financial experience
in healthcare, technology, and public accounting, with expertise in financial
controllership, technical accounting, Securities and Exchange Commission
reporting and policy, internal control, financial planning and analysis,
treasury management, mergers and acquisitions due diligence, and integrations.
Prior to his promotion, Mr. Shepard served as the Company's Vice President,
Finance and Controller, since May 2016, and as Director of Accounting from June
2015 through April 2016. Previously, he worked for ten years in assurance at BDO
USA, LLP, a professional services firm which delivers assurance, tax, and
financial advisory services to its clients around the globe. In anticipation of
and in connection with his promotion, the Compensation Committee, on July 19,
2021, authorized an increase in Mr. Shepard's (i) annual base salary to
$275,000, (ii) short-term incentive bonus target opportunity to 40% of his
adjusted base salary, and (iii) long-term equity incentive plan award target
opportunity to 40% of his adjusted base salary. The Compensation Committee also
then determined to make in respect of the promotion equity grants under the
Company's Plan, commensurate with his new role and responsibilities, as follows:
(i) 169 RSUs, with such number determined based on the closing price of the
Company's common stock as listed on the Nasdaq Stock Market on the grant date,
and (ii) an incentive stock option to acquire up to 549 shares of common stock
with an exercise price equal to the closing price of the Company's common stock
as listed on the Nasdaq Stock Market on the grant date. The stock options vest
in three equal annual installments beginning on the first anniversary of the
date of grant and expire on the fifth-year anniversary of the date of grant. Mr.
Shepard, a Certified Public Accountant, graduated with a B.S. in Accountancy
from Southern Illinois University Edwardsville and a Master of Accountancy from
University of Alabama, Tuscaloosa.
Under the Company's executive severance policy, each of Messrs. Bush and Shepard
will be entitled to twelve months and six months, respectively, of severance
pay, at his then applicable base compensation, in the event of a termination of
employment without cause, subject to each officer's execution of a release of
claims in favor of the Company. Each of Messrs. Bush and Shepard also entered
into a restrictive covenants agreement that contains twelve-month
post-employment non-competition and non-solicitation covenants, as well as,
non-disclosure and non-disparagement covenants.
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Neither of Messrs. Bush nor Shepard has any family relationships with any of the
Company's directors or executive officers, and there have been no related party
transactions between the Company and either of Messrs. Bush or Shepard that are
reportable under Item 404(a) of Regulation S-K.
Additional information concerning the foregoing appointments is contained in the
Company's July 20, 2021, press release, a copy of which is attached hereto as
Exhibit 99.1 and is incorporated herein by reference. Investors and other
interested parties should read the press release in its entirety as it contains
important information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press Release of the Company
104 Cover Page Interactive Data File (embedded within Inline XBRL document).
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