Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On June 16, 2021, Shawn J. Lindquist, Chief Legal Officer and Secretary of
Vivint Smart Home, Inc. (the "Company") and the Company reached an agreement
that Mr. Lindquist would step down from such positions, effective August 31,
2021.
In connection with Mr. Lindquist's departure, the Company and Mr. Lindquist
entered into a Transition and Consulting Services Agreement (the "Transition
Agreement"), effective as of June 17, 2021, and Mr. Lindquist is expected to
enter into a Release and Waiver of Claims in favor of the Company (the
"Release") in connection therewith. Pursuant to the Transition Agreement,
Mr. Lindquist is entitled to:
• subject to execution and non-revocation of the Release and, in respect of
items (ii)-(iv) listed below, continued compliance with the restrictive
covenants Mr. Lindquist is subject to pursuant to the terms of his
employment agreement and outstanding equity awards (collectively, the
"Restrictive Covenants"), the following payments and benefits to which
Mr. Lindquist is entitled pursuant to the Employment Agreement, dated as
of March 2, 2020, by and between Mr. Lindquist and the Company (the
"Employment Agreement"), in connection with a termination without
"Cause":
• (i) a lump sum cash severance payment equal to $243,689.79, in respect
of a pro rata portion of Mr. Lindquist's annual target bonus in
respect of 2021, payable within 10 days of Mr. Lindquist's departure
date and effectiveness of the Release;
• (ii) a lump sum cash payment equal to $915,026.25, which is equal to
150% of Mr. Lindquist's base salary, payable within 55 days after
Mr. Lindquist's departure date and effectiveness of the Release;
• (iii) a lump sum cash payment equal to $954,114.75, which is equal to
150% of Mr. Lindquist's annual bonus for 2020, payable within 55 days
after Mr. Lindquist's departure date and effectiveness of the Release;
and
• (iv) a lump sum cash payment equal to $26,451.90, which is equal to
the monthly COBRA costs for providing health and welfare benefits for
Mr. Lindquist and his dependents for 18 months, payable within 55 days
after Mr. Lindquist's departure date and effectiveness of the Release.
In addition, subject to (i) Mr. Lindquist's continued compliance with the
Restrictive Covenants and (ii) execution and non-revocation of the Release:
(A) the Company will pay Mr. Lindquist a lump-sum cash payment equal to
$833,333, which is the amount that will be unpaid as of the departure date under
Mr. Lindquist's Cash Incentive Award letter agreement from the Company, dated as
of March 2, 2020; and (B) the Company shall pay an amount equal to approximately
$74,600, on behalf of Mr. Lindquist, in respect of the amount required to buy
out Mr. Lindquist's leased Company automobile; Mr. Lindquist shall be permitted
to retain such automobile; and (C) each of Mr. Lindquist's outstanding grants of
restricted stock units under the Company's 2020 Omnibus Incentive Plan (the
"Outstanding Awards") will continue to vest during the Consulting Term (as
defined below) according to their terms as if Mr. Lindquist remained an employee
of the Company or its subsidiaries and affiliates throughout the Consulting
Term; provided, however that if (x) Mr. Lindquist voluntarily terminates the
Consulting Term or the Company terminates the Consulting Term for "cause" or
Mr. Lindquist fails to perform the advisory services as requested by the Company
or (y) Mr. Lindquist breaches the Restrictive Covenants, Mr. Lindquist will
forfeit all rights with respect to the Outstanding Awards. If the Company elects
to terminate the Consulting Term other than for "cause" or a breach of the
Restrictive Covenants, any time-based restricted stock units that would have
otherwise vested prior to the end of the Consulting Term but for such
termination will immediately vest and any performance-based restricted stock
units that would otherwise have been eligible to vest prior to the end of the
Consulting Term but for such termination will remain eligible to vest.
Pursuant to the Transition Agreement, Mr. Lindquist also agreed to become an
independent advisor to the Company and its subsidiaries and affiliates for a
period of one year following his departure date, that is until August 31, 2022,
unless terminated earlier (the "Consulting Term"), for no additional
consideration other than the continued vesting of the Outstanding Awards.
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The foregoing summary description of the Transition Agreement is qualified in
its entirety by reference to the Transition Agreement filed as Exhibit 10.1
hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Transition and Consulting Agreement, dated June 17, 2021, by and
among Vivint Smart Home, Inc. and Shawn J. Lindquist
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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