Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Departure of Donald A. Williams
On July 20, 2021, the Company received written notice from Donald A. Williams of his resignation from the Board of Directors of the Company (the “Board”), effective August 11, 2021. Mr. Williams also serves as, and will also resign from, his position as Chairman of the Company’s Audit Committee and as a member of its Finance Committee. Mr. Williams’s resignations are not related to any disagreement with the Company or due to any matter relating to the Company’s operations, policies or practices, including accounting principles and practices. In connection with his departure from the Company’s Board, Mr. Williams and the Company entered into a Vesting Acceleration Agreement (the “Vesting Agreement”). Pursuant to the Vesting Agreement, as of August 11, 2021, Mr. William’s Annual Board Grant (as defined below), which was granted on June 16, 2021, shall become fully vested and exercisable. This summary of the Vesting Agreement is qualified in its entirety by reference to the full text of the Vesting Agreement, which is filed hereto as Exhibit 10.1.
Appointment of Beth Altman
On July 22, 2021, the Board appointed Beth Altman to fill the vacancy created by Mr. Williams’s resignation to serve as a director of the Company and as Chair of the Company’s Audit Committee for a term commencing on August 12, 2021 and expiring at the Annual Meeting of Stockholders of the Company in 2022 and until her successor is duly elected and qualifies, unless she sooner dies, retires or resigns. The Board has determined that Ms. Altman satisfies the current “independent director” standards established by the rules of The Nasdaq Stock Market.
Ms. Altman will receive annual compensation in accordance with the Company’s standard remuneration for its non-employee directors, which provides that non-employee directors receive a one-time, time-based restricted stock unit (“RSU”) award granted upon election or appointment to the Board, with a grant value of $300,000, as determined by the volume weighted average trading price (“VWAP”) of the Company’s stock for the 30-trading day period prior to date of election or appointment (the “Initial Board Grant”). The Initial Board Grant vests in three equal installments on each of the first three anniversaries of the grant date, conditioned upon continued Board service. Additionally, non-employee directors receive an annual RSU award for service on the Board with a grant value of $150,000 (the “Annual Board Grant”). For continuing (incumbent) non-employee directors, the Annual Board Grant is granted as of the date of the annual meeting of stockholders, based upon the VWAP of the Company’s stock for the 30-trading day period prior to the grant date. For newly elected or newly appointed, non-employee directors, the Annual Board Grant is granted upon election or appointment to the Board, with a grant value, as determined by the 30-trading day VWAP prior to date of election or appointment, pro-rated by the number of days from the date of the prior annual meeting of stockholders to the date of the grant, divided by 365. The Annual Board Grant vests on the earlier of (a) the next annual meeting of stockholders and (b) the death or resignation of the director. In the event of death or resignation of the director, the Annual Board Grant vests pro-rated based on the number of actual days served by the director from the time of the grant to such death or resignation, divided by 365. Additionally, non-employee directors receive an annual cash retainer as follows: (i) $45,000 to each non-employee director that serves as a member of the Board ($70,000 for Chair or Lead Director of the Board) and (ii) $9,500 ($20,000 for Chair), $9,500 ($20,000 for Chair), $6,000 ($15,000 for Chair) and $5,000 ($10,000 for Chair) to each non-employee director that serves as a member of the Audit Committee, Finance Committee, Compensation Committee, and/or Nominating and Corporate Governance Committee, respectively. Cash retainers are paid quarterly in equal installments, pro-rated based on the number of actual days served by the director during the applicable quarter.
In addition, it is anticipated that Ms. Altman will enter into the Company’s standard form of indemnification agreement for non-employee directors, a copy of which is attached as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed with the Securities and Exchange Commission on May 5, 2009, and incorporated herein by reference.
There are no other arrangements or understandings between Ms. Altman and any other person pursuant to which she was selected to serve on the Board. There are no family relationships between Ms. Altman and any director or executive officer of the Company, and she has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.