|HRG GROUP, INC. filed this Form 8-K on 03/22/2017|
|<< Previous Page | Next Page >>|
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously announced on November 17, 2016, HRG Group, Inc. (the “Company” or “HRG”) and Mr. Omar Asali, President, Chief Executive Officer and a director of the Company, entered into a Transition Agreement (the “Transition Agreement”) pursuant to which Mr. Asali was expected to leave his positions with the Company and its subsidiaries in the second half of fiscal 2017.
On March 22, 2017, Mr. Asali notified the Company, and the Company accepted Mr. Asali’s notification, that he will cease his employment with the Company and resign from the board of directors of the Company and its subsidiaries effective as of 5:00 p.m. Eastern Time on April 14, 2017 (the “Effective Time”). Mr. Asali is leaving the Company to establish a private investment vehicle that will make long-term investments in private and public companies and not as a result of any disagreement with the Company or its subsidiaries.
In accordance with the Transition Agreement, for the Company’s fiscal 2017 Mr. Asali will receive a cash bonus for $3,000,000 on March 31, 2017, and Mr. Asali’s options and restricted stock that were scheduled to vest and settle in November 29, 2017, will vest and settle on March 31, 2017. Mr. Asali will also continue to receive payment of his base salary and any unpaid vacation time and unreimbursed business expenses through the Effective Time. The foregoing summary of the Transition Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Transition Agreement, which is filed as Exhibit 10.1 to the Company’s Amendment No.1 to its Annual Report on Form 10-K, filed January 27, 2017.
At the Effective Time, Mr. Joseph S. Steinberg, the Chairman of the board of directors of the Company, will be appointed to the additional position of Chief Executive Officer of the Company. Mr. Steinberg will not receive compensation in connection with his service as Chief Executive Officer. In connection with such appointment, at the Effective Time, Mr. Steinberg will cease to serve as a member of the Compensation Committee and the Nominating and Corporate Governance Committee of the Company’s board of directors. Biographical information as well as information regarding transactions with related persons concerning Mr. Steinberg can be found under Item 10 and Item 13, respectively, of the Company’s Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended September 30, 2016, filed with the Securities and Exchange Commission on January 27, 2017.
On March 22, 2017, the Company appointed Mr. Ehsan Zargar (the “Executive”), effective as of January 1, 2017, as Executive Vice President, Chief Operating Officer, General Counsel and Corporate Secretary of the Company. The Executive, age 39, joined the Company in June 2011 and was promoted to General Counsel on April 1, 2015. In connection with the Executive’s appointment, no changes were made to the Executive’s compensation.
The Executive is a party to an employment agreement with the Company dated October 1, 2012 (the “Employment Agreement”). Pursuant to the Employment Agreement, the Executive is an at-will employee of the Company and his base salary was initially $250,000 per year, which was increased to $400,000 on April 1, 2015. The Executive is also entitled to an annual bonus based upon achievement of certain performance metrics as well as standard benefits. The Employment Agreement also provides for standard nondisclosure, nondisparagement and cooperation obligations.
On January 20, 2017, the Company entered into a retention and severance agreement with the Executive (the “Retention Agreement”). Pursuant to the Retention Agreement, the Executive will be entitled to receive retention payments of $2,000,000 on June 30, 2017, $1,000,000 on October 2, 2017 and $1,000,000 on the Transaction Closing Date (as defined below), in each case less applicable taxes (such payments, collectively, the “Payments”). The Payments are subject to the Executive’s continued employment with the Company on the specified dates. However, if the Executive is terminated by the Company without Cause (as defined in the Retention Agreement), or if he resigns for Good Reason (as defined in the Retention Agreement) or as a result of his death or disability, then subject to his execution and nonrevocation of the Company’s customary release, the Executive will receive the Payments, to the extent not yet paid, as well as reimbursement for COBRA coverage for up to six months. The Executive has acknowledged and agreed that other than the Payments, he will not be entitled to any additional severance or separation pay and will not be entitled to receive any bonus for the Company’s current year or any future year, in each case whether pursuant to the Employment Agreement or otherwise. In addition, upon termination of the Executive’s employment, (i) the Executive will be entitled to any accrued and unpaid base salary, unused vacation time and unreimbursed business expenses through the date of his termination and (ii) his unvested equity based awards will vest and his outstanding options to acquire Company stock will generally be exercisable for one year post termination, in each case subject to his execution of a release of claims. For purposes of the Retention Agreement, “Transaction Closing Date” means the date the Company closes a sale, merger, change in control or other strategic transaction involving the Company and substantially all of its assets, which shall include the Company’s beneficial ownership interests in both
|<< Previous Page | Next Page >>|