Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers. |
(b)
- (c) Effective on August 1, 2022, the Company appointed John E. Warch as the Company’s Executive Vice President and Chief Financial
Officer. Mr. Warch is replacing John L. Villano as the Company’s Chief Financial Officer. Mr. Villano will continue in his
roles as Chairman of the Board, Chief Executive Officer and President of the Company. There is no existing family relationship between
Mr. Warch and any director or executive officer of the Company.
Mr. Warch did not previously
have any direct or indirect interest in any transactions with the Company that requires disclosure under Item 404(a) of Regulation S-K.
The following is a brief description
of the material terms of the Agreement:
Mr.
Warch’s employment will commence on August 1, 2022 and will continue until either party terminates the Agreement. His compensation
package includes a “base salary” of $325,000, an annual cash bonus of up to 50% of his base salary and benefits such as health
insurance, vacation and expense reimbursement, in accordance with prevailing Company policy. The amount of the cash bonus and the factors
to be considered in connection therewith are in the discretion of the Company’s Chief Executive Officer (the “CEO”)
and the Compensation Committee (the “Compensation Committee”). He may also receive equity
incentive compensation in the discretion of the Compensation Committee. Finally, Mr. Warch will receive a $25,000 signing bonus within
fifteen days of the commencement of his employment. As Chief Financial Officer and Executive Vice President, he will have such duties
and responsibilities as are customary for such positions and other executive, managerial or administrative duties, functions or responsibilities
as are from time to time delegated to him by the CEO, the Board or the Audit Committee.
In
the event Mr. Warch’s employment is terminated without “Cause” (as defined in the Agreement), he will be entitled to
a severance payment equal to one year’s base salary, except if the termination occurs within the first year of his employment, in
which case the severance amount will be three months of his base salary. At the election of the Company, the severance may be paid
in equal payments over 12 months following the effective date of the termination and shall be subject to all applicable withholdings and
taxes. If he is terminated without cause in connection with a “Sale” (as defined in the Agreement), his severance payment
will be equal to 18 months of his base salary. Any termination without cause within six month of a Sale is deemed to be in connection
with such Sale. The severance payment is subject to the signing by Mr. Warch of a general release of all claims against the Company in
a form and manner satisfactory to the Company, and after the expiration of any revocation rights under that general release, and subject
to his compliance with post-termination obligations and any applicable restrictive covenants. The Agreement also includes a covenant not
to compete that continues for 12 months after termination unless Mr. Warch is terminated without “Cause,” in which event this
covenant will not apply.
The foregoing description
of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy
of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
BIOGRAPHICAL INFORMATION
The principal occupation and
brief summary of Mr. Warch’s background is as follows:
John
E. Warch, age 64, was appointed to serve as the Company’s Executive Vice President and Chief Financial Officer beginning
on August 1, 2022. From September 2013 until July 2022, Mr. Warch was the Senior Vice President, Chief Financial Officer of Four
Springs Capital Trust, a real estate investment trust focused on acquiring, owning, and managing retail, industrial, medical, and other
office properties. Since April 2015, he was also the Treasurer of Four Springs. From August 2012 until September 2013, Mr. Warch
was a Senior Consultant at David Landau & Associates, LLC, responsible for, among other things, Sarbanes-Oxley 404 compliance testing
of real estate clients. From November 2006 until March 2012, Mr. Warch served as Senior Vice President and Chief Accounting
Officer of CapLease, Inc. (previously NYSE: LSE), where he was responsible for all aspects of the financial infrastructure of a publicly-held
real estate investment trust, managed financial and SEC reporting and compliance, oversaw Sarbanes-Oxley 404 compliance and coordinated
audits and reviews with independent accountants. Mr. Warch is a Certified Public Accountant and earned a B.S. in Accounting and an M.B.A.
in Finance from St. John’s University.