Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 1, 2021, the Board of Directors (the "Board") of Sally Beauty
Holdings, Inc. (the "Company") announced the appointment of Denise Paulonis as
the Company's President and Chief Executive Officer, effective October 1, 2021.
Christian A. Brickman, the Company's current President and Chief Executive
Officer, will terminate employment and his role as Chairman of the Board
effective September 30, 2021. A copy of the Company's press release is attached
hereto as Exhibit 99.1.
Ms. Paulonis' Appointment as President and Chief Executive Officer
Ms. Paulonis, age 49, has been a member of the Company's Board of Directors
since 2018 and is the current Chair of the Audit Committee. Since February 2020,
she has served as Chief Financial Officer of Sprouts Farmers Market. From 2014
to 2020, Ms. Paulonis served in various executive roles at The Michaels
Companies, including as Executive Vice President and CFO (August 2016 -
January 2020), Senior Vice President of Finance and Treasurer (November 2015 -
August 2016), and Vice President of Corporate Finance, Investor Relations and
Treasury (September 2014 - November 2015). From 2000 to 2014, Ms. Paulonis held
various senior level positions with PepsiCo, McKinsey & Company and Bank of
America. She earned a Bachelor of Science in finance and economics from Miami
University and a Masters of Business Administration from The Wharton School at
the University of Pennsylvania.
With respect to the disclosure required by Item 401(d) of Regulation S-K, there
are no family relationships between Ms. Paulonis and any director or executive
officer of the Company. With respect to Item 404(a) of Regulation S-K, there are
no relationships or related transactions between Ms. Paulonis and the Company
that would be required to be reported.
The Company entered into a written offer letter with Ms. Paulonis outlining the
terms of her employment as President and Chief Executive Officer. Pursuant to
the terms of the offer letter, Ms. Paulonis will receive an annual salary at the
rate of $1,100,000. Ms. Paulonis will participate in the Company's Annual
Incentive Plan ("AIP"), with a target annual bonus of 150% of her base salary.
In addition to participating in the AIP, Ms. Paulonis will be eligible to
receive a long-term incentive (LTI) award with a grant date target value equal
to $4,250,000. The Company and Ms. Paulonis also will enter into a
change-in-control severance agreement having terms consistent with those
provided to the other executive officers, which severance agreements have been
previously described by the Company in, and attached as Exhibit 10.3 to, the
Current Report on Form 8-K filed by the Company on November 5, 2012.
In connection with her commencement of employment with the Company, Ms. Paulonis
will receive a $400,000 sign-on bonus, 50% of which is subject to repayment if
she resigns or if the Company terminates her employment for cause within her
first year of employment with the Company. In addition, Ms. Paulonis will
receive a special LTI award on the date that she commences employment with the
Company, consisting of restricted stock having a grant date target fair value of
$1,450,000 and stock options having a grant date target fair value of
$1,000,000. The restricted shares and options will vest ratably over three
years beginning on the first anniversary of the date of grant, subject to
Ms. Paulonis' continued employment with the Company on each applicable vesting
date and subject to such other terms and conditions of the Company's 2019
Omnibus Incentive Plan and the individual award agreements. The Company also
will assist Ms. Paulonis with her relocation to the Company's headquarters and
will reimburse Ms. Paulonis for relocation expenses.
The foregoing summary of Ms. Paulonis' offer letter is qualified in its entirety
by reference to the full text of the offer letter, which will be filed as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ending
September 30, 2021.
Separation Agreement with Mr. Brickman
The Company and Mr. Brickman have entered into a separation agreement, pursuant
to which Mr. Brickman will receive, in exchange for his release of all potential
claims against the Company: (1) acceleration of vesting of certain time-based
equity awards, as follows: (i) 118,179 options and 48,405 restricted shares
granted on November 4, 2020, (ii) 80,030 options and 26,426 restricted shares
granted on November 5, 2019, and (iii) 77,361 options and 24,256 restricted
shares granted on November 1, 2018; (2) eligibility to vest in up to 24,202
performance-based restricted stock units granted on November 4, 2020 subject to
achievement of applicable adjusted operating income goals; and (3) consulting
pay of up to $500,000 to assist in the orderly transition of his duties, payable
in 6 equal installments during the 6-month period following Mr. Brickman's
separation date, provided that the independent members of the Company's Board of
Directors may terminate the consulting arrangement at any time.
The separation agreement contains covenants regarding confidential information
and non-disparagement, as well as a non-competition covenant and an employee
non-solicitation covenant that apply for 12-months following Mr. Brickman's
separation from employment.
The foregoing description of Mr. Brickman's separation agreement is qualified in
its entirety by reference to the full text of the separation agreement, which
will be filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ending September 30, 2021.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
99.1 Press Release, dated as of September 1, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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