Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 6, 2020, Aramark (the "Company") announced that Thomas Ondrof will
become Executive Vice President, Chief Financial Officer, effective January 7,
2020. Mr. Ondrof will replace Stephen Bramlage, who will step down from his role
as Executive Vice President, Chief Financial Officer, principal financial
officer and principal accounting officer of the Company effective as of the
close of business on January 6, 2020. Mr. Bramlage will continue to be employed
as an Executive Advisor to the Company until April 3, 2020. On January 5, 2020,
the Board of Directors of the Company (the "Board") approved the terms of
Mr. Bramlage's separation from his role as Executive Vice President, Chief
Financial Officer, as described below.
Appointment of Chief Financial Officer
On January 5, 2020, Mr. Thomas Ondrof, age 55, was appointed as Executive Vice
President, Chief Financial Officer, principal financial officer and principal
accounting officer of the Company, effective as of January 7, 2020. Mr. Ondrof
is the former Strategic Growth Leader and Chief Financial Officer of Performance
Food Group. Prior to joining Performance Food Group in 2016, Mr. Ondrof served
at Compass Group North America for 24 years in roles of increasing
responsibility, most recently as Chief Development Officer, and prior to that as
Chief Strategy Officer and also as Chief Financial Officer. Before Compass,
Mr. Ondrof spent two years at ITT Rayonier, and started his career as an auditor
with PricewaterhouseCoopers. Mr. Ondrof received an MBA degree from the
University of Georgia and an undergraduate degree in Accounting at Wake Forest
University. There are no other arrangements or understandings between Mr. Ondrof
and any other persons, other than the Employment Agreement (as defined and
described below), pursuant to which he was appointed to the office described
above and no family relationship among any of the Company's directors or
executive officers and Mr. Ondrof. Mr. Ondrof does not have any direct or
indirect interest in any transaction required to be disclosed pursuant to Item
404(a) of Regulation S-K.
Employment Agreement with the Chief Financial Officer
On January 5, 2020, in connection with his appointment as Executive Vice
President, Chief Financial Officer of the Company, Mr. Ondrof entered into an
offer letter agreement and an agreement relating to employment and
post-employment competition (together, the "Employment Agreement") with the
Company. Pursuant to the Employment Agreement, Mr. Ondrof's initial annual base
salary will be $800,000 and his target bonus will be 100% of his base salary,
with his actual bonus to be determined under the Company's applicable bonus plan
and pro-rated based on his period of service in respect of fiscal year 2020.
Pursuant to the Employment Agreement, Mr. Ondrof will be entitled to four weeks'
paid vacation and will be eligible to participate in certain Company health and
welfare plans and programs as well as the Company's Savings Incentive Retirement
Plan and Deferred Compensation Plan. In addition, Mr. Ondrof will be entitled to
Company-paid financial planning services, a monthly car allowance of $1,100 and
Company-provided parking, all on the same terms as other Company senior
executives.
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The Company will also recommend to the Compensation and Human Resources
Committee of the Board that Mr. Ondrof be granted the annual equity awards in
respect of the Company's fiscal year 2020 annual long-term incentive
compensation program upon Mr. Ondrof's commencement of employment, in the same
forms and on substantially the same vesting terms as those granted to other
executives in November 2019 in connection with the Company's annual long-term
incentive grant program, except that any time-vesting awards will only begin
vesting following the grant date, having the following grant date fair values:
(i) $600,000 in non-qualified stock options that vest in equal annual
installments over 4 years, (ii) $400,000 in time-based restricted stock units
that vest in equal annual installments over 4 years, and (iii) $1,000,000 in
performance stock units that cliff vest at the end of a three-year performance
period subject to achievement at target of performance metrics established for
the FY2020-2022 performance cycle in accordance with the terms established by
the Committee on November 14, 2019.
Under the Employment Agreement, upon a termination by the Company for any reason
other than "Cause" other than within two years after a "Change of Control" (each
as such term is defined in the Employment Agreement), Mr. Ondrof would be
entitled to base salary continuation for 18 months after such termination. In
addition, upon a termination by Mr. Ondrof for any reason after the first
anniversary of Mr. Ondrof's date of hire with Aramark or by the Company for any
reason other than "Cause," Mr. Ondrof will be entitled to continued
participation in the Company's basic group medical, dental and vision programs
at the active employee rate until the earlier of the date on which Mr. Ondrof
attains age 65 and the date on which he elects to participate in plans of a new
employer (or if Mr. Ondrof violates certain restrictive covenants described
below). Under the Employment Agreement, upon a termination without "Cause" by
the Company or for "Good Reason" that occurs within the two-year period after a
Change of Control or, in the case of a termination at the request of a third
party involved in a Change in Control or otherwise in connection with or in
anticipation of a Change in Control, prior to such change in Control, Mr. Ondrof
is entitled to receive (i) a payment equal to 2.0 times his base salary (in
effect on the date of the Change of Control or on the date of termination,
whichever is higher), payable in regular installments over two years, (ii) a
payment equal to 2.0 times his target bonus (in effect on the date of the Change
of Control or on the date of termination, whichever is higher) (or, if greater,
2.0 times his most recent actual annual bonus), payable in regular installments
over two years, (iii) a lump sum payment equal to a pro-rata portion of his
target annual bonus for the year of termination, (iv) continued participation in
the Company's medical, dental and vision programs as described above (to which
benefit Mr. Ondrof will also be entitled if he resigns for any reason within the
two-year period following a Change in Control and after the first anniversary of
his date of hire), and (v) outplacement counseling for 24 months after such
termination. In all instances, Mr. Ondrof's equity awards will be treated in
accordance with the terms of the applicable plans and agreements. Finally, the
Employment Agreement generally provides for perpetual non-disclosure and
non-disparagement covenants and 24-month post-employment noncompetition,
nonsolicitation and non-hire covenants, which noncompetition covenant applies
for 18 months if Mr. Ondrof's employment is terminated without Cause by the
Company at any time or for Good Reason by Mr. Ondrof at any time following a
Change in Control.
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In addition to Mr. Ondrof's entitlements under the Employment Agreement,
Mr. Ondrof will enter into an indemnification agreement with the Company
consistent with the form of the existing indemnification agreement entered into
between the Company and its executive officers.
The foregoing is a summary of the material terms of the Employment Agreement.
The summary does not purport to be complete and is qualified in its entirety by
reference to Mr. Ondrof's offer letter agreement and agreement relating to
employment and post-employment competition, which are filed as Exhibits 10.2 and
10.3, respectively, to this Current Report on Form 8-K and incorporated herein
by reference.
Separation Letter Agreement with Mr. Bramlage
On January 4, 2020, Mr. Bramlage and the Company also entered into a letter
agreement (the "Letter Agreement") setting forth the terms of Mr. Bramlage's
separation from service, which is being treated as a termination without "cause"
under the Noncompete Agreement (as defined below). As provided in the Letter
Agreement, including as applicable in accordance with the terms of the Agreement
Relating to Employment and Post-Employment Competition between the Company and
Mr. Bramlage dated March 14, 2015 (the "Noncompete Agreement") and subject to
Mr. Bramlage's continued compliance, for 18 months after his separation from
service, with noncompete covenants contained in the Noncompete Agreement,
Mr. Bramlage will receive: (i) an amount equal to 18 months of his base salary
(totaling $1,166,925), payable in accordance with Aramark's normal payroll cycle
over the 18 months following his separation from service; (ii) a lump sum
payment equal to one and one-half times his target annual bonus for the 2019
fiscal year (totaling $1,166,925), and a prorated portion of his target annual
bonus for the 2020 fiscal year, with such bonus to be determined based on target
achievement of both individual and financial objectives (estimated to equal
$388,975), in each case to be paid when 2020 bonuses would otherwise be paid;
(iii) 18 months of Company-paid medical insurance; (iv) 18 months of
Company-paid automobile allowance (totaling $19,800; and (v) reimbursement for
outplacement counseling services in an amount not to exceed $155,590 until the
earlier of the date Mr. Bramlage becomes newly employed and 18 months after his
. . .
Item 8.01. Other Events
On January 6, 2020, the Company issued a press release announcing Mr. Bramlage's
separation from his role as Executive Vice President, Chief Financial Officer
and the appointment of Mr. Ondrof as Executive Vice President, Chief Financial
Officer. A copy of the press release is filed as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
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Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits
(d) Exhibits. The following exhibits are filed as part of this report:
10.1 Letter Agreement, dated as of January 4, 2020, by and between Stephen
P. Bramlage and Aramark.
10.2 Offer Letter, dated as of January 5, 2020, by and between Thomas
Ondrof and Aramark.
10.3 Agreement relating to Employment and Post-Employment Competition,
dated as of January 5, 2020, by and between Thomas Ondrof and Aramark.
99.1 Press Release, issued January 6, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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