Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On December 16, 2021, Turning Point Brands, Inc. (the "Company") announced that
the Board of Directors (the "Board") has appointed Yavor Efremov to succeed
Larry Wexler as President and Chief Executive Officer of the Company, effective
as of January 11, 2022. Mr. Wexler intends to retire as Chief Executive Officer
effective January 10, 2022 after 18 years with the Company. Mr. Wexler will
continue to serve on the Board of Directors following his retirement.
Mr. Efremov, age 48, joined the Company's Board of Directors in July 2021 to
help develop its long-term strategic plan. In connection with his appointment
as President and Chief Executive Officer, he will step down as a member of the
Audit Committee but will continue to serve as a member of the Board.
Prior to joining the Company's Board of Directors, Mr. Efremov served as the CEO
of Motorsport Network, where he was responsible for upgrading the IT
infrastructure, processes, and company strategy to support the integration of
more than 30 businesses around the world. He also served as a senior executive
at Liberty Media Corp., where he was instrumental in sourcing, financing, and
growing Liberty's investments in multibillion-dollar businesses, including
Charter Communications and Formula 1. Prior to that, Mr. Efremov worked as an
investment banker at Goldman Sachs & Co. and as a corporate lawyer at the law
firm of Cleary, Gottlieb, Steen & Hamilton. Mr. Efremov holds a J.D. from Yale
Law School and a Ph.D. in economics from Yale University. He also has a B.S. in
mathematics and a B.A. in economics from Furman University. Mr. Efremov
currently serves on the board of MDH Acquisition Corp. Mr. Efremov does not
have any family relationships with any of the Company's directors or executive
officers and is not a party to any transactions listed in Item 404(a) of
Regulation S-K.
In connection with his appointment as President and Chief Executive Officer, the
Company and Mr. Efremov entered into an employment agreement which provides for
his employment to commence on January 11, 2022. The employment agreement
provides for an initial term of one-year, subject to automatic one-year renewals
unless either party gives at least 90 days' notice of non-renewal. Mr. Efremov
will receive an annual base salary of $750,000 and a target annual bonus
opportunity equal to 100% of base salary. In addition, Mr. Efremov will have a
target annual long-term incentive opportunity of not less than $500,000. In the
event that Mr. Efremov's employment is terminated by the Company without "Cause"
or if Mr. Efremov resigns for "Good Reason" (each as defined the employment
agreement), Mr. Efremov will be entitled to receive the following severance
benefits: (i) a severance payment equal to 12 months' of annual base salary,
payable over 12 months, (ii) an amount equal to a pro-rated portion of his
target annual bonus for the year of termination, and (iii) a COBRA stipend equal
to 12 months' COBRA continuation coverage. In addition, any equity awards
granted to Mr. Efremov will be subject to acceleration or continued vesting, as
applicable, upon certain resignation or termination events.
The foregoing description of Mr. Efremov's employment agreement is qualified in
its entirety by reference to its full text, a copy of which is attached to this
Form 8-K as Exhibit 10.1.
In connection with Mr. Wexler's retirement, the Company expects to enter into a
separation agreement with Mr. Wexler pursuant to which he will agree to provide
consulting services to the Company through June 30, 2022 in exchange for a
monthly payment equal to 1/12th of his base salary, and a payment in respect of
healthcare coverage during such period. In addition, Mr. Wexler's outstanding
equity awards will remain outstanding and will continue to vest in accordance
with the existing vesting schedules.
On December 16, 2021, the Company issued a press release in connection with the
announcement of the foregoing matters. A copy of the press release is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release issued by Turning Point Brands, Inc. dated December 16, 2021.
10.1 Employment Agreement dated December 15, 2021 between the Company and Yavor
Efremov.
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