Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of New Chief Executive Officer and Director
On February 23, 2022, WW International, Inc. (the "Company") appointed Sima
Sistani as Chief Executive Officer and elected her as a Class III director of
the Company, effective March 21, 2022 (the "Commencement Date"). Ms. Sistani
will fill the vacancy on the Company's board of directors (the "Board")
following Mindy Grossman's resignation from the Board, effective as of the
Commencement Date.
Since June 2019, Ms. Sistani, age 42, has worked at Epic Games, Inc., a video
game and software developer and publisher, where she served as Chief Executive
Officer of Houseparty, a face-to-face synchronous social network, and has also
been the senior executive leading social gameplay and feature development for
Epic's gaming products, including Fortnite. Prior to Epic's acquisition,
Ms. Sistani was the Chief Executive Officer at Houseparty and served on its
Board of Directors, having been one of its original co-founders prior to its
February 2016 launch. She previously led mobile growth operations at Yahoo!
Inc., a technology company, from November 2011 to May 2015, and from the time
Yahoo! acquired Tumblr she served as Tumblr's first Head of Media. Prior to that
time, Ms. Sistani held positions at Goldman Sachs and Creative Artists Agency.
Ms. Sistani received a B.A. from Duke University and an M.B.A. from the Kellogg
School of Management at Northwestern University.
Employment Agreement and Continuity Agreement
On February 23, 2022, the Company entered into an employment agreement with
Ms. Sistani (the "Employment Agreement"). The material terms of the Employment
Agreement are as follows: (i) a base salary of $1,236,000 per year;
(ii) eligibility for an annual, performance-based cash bonus with a target bonus
percentage of at least 150% of her base salary and a maximum payout of 300% of
her base salary; (iii) reimbursement for temporary housing and travel expenses
incurred by Ms. Sistani during the one-year period following the Commencement
Date in the aggregate amount of up to $250,000; (iv) commencing in 2023,
eligibility to participate in the Company's annual incentive equity award
program with an annual grant value of at least 400% of base salary, with the
terms of such grants to be consistent with the terms of grants made to other
executives, provided that Ms. Sistani's equity grants may, but need not, provide
for accelerated vesting upon a change in control of the Company; and (v) payment
or reimbursement of up to $25,000 of legal fees incurred in connection with the
negotiation of the Employment Agreement and Continuity Agreement (discussed
below). For 2022, Ms. Sistani will receive an annual cash bonus of $1,854,000,
prorated based on the number of days she is employed during the 2022 fiscal
year.
The Employment Agreement also provides for the grant of initial equity awards as
follows: (i) 325,000 restricted stock units, (ii) 450,000 nonqualified stock
options with an exercise price per share equal to the closing price of the
Company's common stock on the grant date, (iii) 500,000 nonqualified stock
options with an exercise price per share equal to $30 and (iv) 500,000
nonqualified stock options with an exercise price per share equal to $50. The
grant dates of the initial equity awards will be the Commencement Date, or as
soon as practicable following the Commencement Date, and such awards shall
proportionately vest annually over a four-year period beginning with the first
anniversary of the Commencement Date. The initial equity awards that are stock
options will be subject to a seven-year term. The 500,000 nonqualified stock
options with an exercise price per share equal to $30 and the 500,000
nonqualified stock options with an exercise price per share equal to $50 will be
granted outside of the Company's stock incentive plan and in reliance on the
employment inducement exemption provided under the Nasdaq Listing Rule
5635(c)(4) and, in accordance with such exemption, the Company will issue a
press release re-disclosing the material terms of such awards. The other initial
equity awards are intended to be granted under the Company's stock incentive
plan.
In the event of a termination of Ms. Sistani's employment by the Company without
"cause" or by Ms. Sistani for "good reason", subject to the execution of a
release of claims and continued compliance with her restricted covenants,
Ms. Sistani shall be entitled to receive: (i) any accrued obligations, (ii) any
unpaid annual bonus for a fiscal year completed prior to such qualifying
termination, (iii) a pro-rata annual bonus, based on actual performance,
pro-rated through her termination date for the year of such qualifying
termination, payable when such bonuses are paid to other executives,
(iv) continued payment of base salary for two years, (v) Company payment for the
employer portion of her continued medical insurance coverage under the
Company-sponsored health plans for two years following the termination (or such
shorter period of time if she obtains alternative health coverage from another
employer), and (vi) accelerated vesting of the greater of 50% of the unvested
initial equity grants (as described above) or the amount that would vest on the
next vesting date and any and all vested initial options shall remain
exercisable for the full seven year term of such award agreements. In the event
of a termination of Ms. Sistani's employment due to death or "disability",
Ms. Sistani shall be entitled to receive (i) any accrued obligations, (ii) any
unpaid annual bonus for a fiscal year completed prior to such qualifying
termination, and (iii) a pro-rata portion of her target annual bonus, pro-rated
through her termination date.
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In addition, on February 23, 2022, the Company entered into a continuity
agreement with Ms. Sistani (the "Continuity Agreement"), which entitles her to
receive specified termination payments upon a change in control of the Company.
The agreement will have a term from the date of commencement of employment until
Ms. Sistani's employment with the Company is terminated for any reason and will
contain terms and conditions consistent with those set forth in the Continuity
Agreement previously entered into with Ms. Grossman. The severance benefits
provided under the Continuity Agreement are described in the Company's
Definitive Proxy Statement on Schedule 14A filed on April 6, 2021 on page 53 in
the section of the "Compensation Discussion and Analysis" entitled "-Termination
Payments upon a Change of Control" and on pages 70 through 72 under the heading
"-Continuity Agreements" in the section entitled "Potential Payments upon
Termination or a Change of Control", and such descriptions are incorporated
herein by reference. Ms. Sistani will not be entitled to a duplication of
benefits under her Employment Agreement and Continuity Agreement.
The foregoing description is qualified in its entirety by reference to the
Employment Agreement, the Continuity Agreement and the Forms of Term Sheet and
Terms and Conditions for the initial equity awards, copies of which are filed
herewith as Exhibits 10.1, 10.2. 10.3, 10.4 and 10.5, respectively, and are
incorporated by reference herein.
Departure of Chief Executive Officer and Director
As previously disclosed on October 1, 2021, Mindy Grossman notified the Board of
her resignation as a director of the Company and as President and Chief
Executive Officer of the Company, effective on the earlier of (i) the
commencement of employment of any successor Chief Executive Officer (or interim
replacement) and (ii) April 15, 2022. Ms. Grossman's resignation as President
and Chief Executive Officer shall be effective as of March 18, 2022 and as a
Class III director shall be effective as of the Commencement Date.
Item 7.01. Regulation FD Disclosure.
A copy of the Company's press release announcing the appointment of Ms. Sistani
has been furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 Employment Agreement, dated as of February 23, 2022, by and between WW
International, Inc. and Sima Sistani
10.2 Continuity Agreement, dated as of February 23, 2022, by and between WW
International, Inc. and Sima Sistani
10.3 Form of Term Sheet for Stock Option Awards and Form of Terms and
Conditions for Employee Stock Option Awards (Chief Executive Officer
Initial Equity Award-Stock Incentive Plan Award)
10.4 Form of Term Sheet for Stock Option Awards and Form of Terms and
Conditions for Employee Stock Option Awards (Chief Executive Officer
Initial Equity Award-Inducement Grant Award)
10.5 Form of Term Sheet for Employee Restricted Stock Unit Awards and Form of
Terms and Conditions for Employee Restricted Stock Unit Awards (Chief
Executive Officer Initial Equity Award)
99.1 Press Release dated February 24, 2022
104 The cover page from this Current Report on Form 8-K, formatted in Inline
XBRL
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