Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On September 21, 2021, Dave & Buster's Entertainment, Inc. (the "Company") and
Brian A. Jenkins, the Company's Chief Executive Officer ("CEO"), mutually agreed
to terms pursuant to which Mr. Jenkins will separate and transition from the
Company. Mr. Jenkins will cease to serve as CEO and Director on September 30,
2021. Also on September 21, 2021, Kevin Sheehan, 67, the Company's current Chair
of the Board, was appointed as the Company's interim CEO, effective as of
October 1, 2021. It is anticipated that Mr. Sheehan will serve in such position
until the appointment by the Board of a permanent CEO. Biographical and other
information required by this Item concerning Mr. Sheehan is included in the
Company's definitive proxy statement for the 2021 Annual Meeting of
Shareholders, filed with the SEC on May 5, 2021. The Board has voted to reduce
its size to seven members following Mr. Jenkins' departure from board, effective
October 1, 2021. On September 21, 2021, the Company issued a press release
announcing these changes. A copy of the press release is attached as Exhibit
99.1 and is incorporated by reference herein.
In connection with his service as interim CEO, Mr. Sheehan and the Board have
entered into a letter agreement (the "Sheehan Agreement") pursuant to which Mr.
Sheehan will receive the following compensation as interim CEO: (i) base salary
at an annual rate of $780,000, (ii) a prorated annual bonus based on his service
as interim CEO with a target bonus of 100% of his base salary, (iii) a grant of
restricted stock units with a grant date value of $2,000,000, which will cliff
vest upon the earliest to occur of (x) October 1, 2022, (y) the commencement
date of employment of a permanent CEO (other than Mr. Sheehan), or (z) the
termination of his employment in connection with a change in control; (iv) a
grant of performance share units (PSUs) with respect to up to 20,000 shares of
Company common stock having a one-year performance period that will be earned
only upon achieving specified stock price levels and vesting terms established
by the Compensation Committee; and (v) reimbursement of business expenses,
including certain commuting and housing expenses (not to exceed $15,000 per
month in the aggregate absent further approval). The Sheehan Agreement also
provides for customary restrictive covenants, including non-compete, non-solicit
and non-hire and confidentiality covenants. Mr. Sheehan will not receive any
compensation as a director during his tenure as interim CEO, other than
continued vesting of his restricted stock units granted in June 2021.
To facilitate the transition in leadership, Mr. Jenkins will continue to serve
as a Senior Advisor to Mr. Sheehan (and the subsequently appointed permanent
CEO) through November 30, 2021 (the "Transition Date"). Mr. Jenkins' departure
is not the result of any dispute or disagreement with the Company, its Board, or
its management, or any matter relating to the Company's operations, policies or
practices.
On September 21, 2021, Mr. Jenkins and the Company entered into a Transition and
Separation Agreement and Release ("Transition Agreement") memorializing the
terms of his separation. Mr. Jenkins' departure qualifies as a termination other
than for cause under his Employment Agreement and as a termination other than
for cause and a Retirement under his existing outstanding equity agreements
(which shall be treated in accordance with their existing terms) given that he
will have satisfied the criteria for Retirement at the time of his departure
(e.g. age of 60 with ten or more years of service). Under the Transition
Agreement, Mr. Jenkins will provide certain transition services. In addition,
subject to his execution and non-revocation of a general release of claims, Mr.
Jenkins will (i) be entitled to continue to receive his annual current base
salary through the Transition Date, but not additional annual bonus compensation
beyond what has already been earned under the Company's FY 2021 bonus plan; (ii)
continue to participate in company-sponsored benefit programs through the
Transition Date; and (iii) continue to receive his perquisite allowance through
the Transition Date.
Following the Transition Date, consistent with the terms of the Transition
Agreement and Mr. Jenkins' Employment Agreement (as previously disclosed in the
Company's most recent proxy statement), the Company will: (i) provide severance
pay totaling 24 months of his current base salary plus target bonus; (ii)
provide 12 months continuation of Mr. Jenkins' perquisite allowance; and (iii)
provide monthly payments for a period of 12 months equal to the monthly premium
required by Mr. Jenkins to maintain health insurance benefits provided by the
Company's group health insurance plan.
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Mr. Jenkins' existing employment agreement otherwise remains in full force and
effect, and Mr. Jenkins continues to be subject to the non-competition,
non-solicitation and confidentiality obligations thereunder.
The foregoing descriptions of the Transition Agreement and the Sheehan Agreement
do not purport to be complete and are qualified in its entirety by reference to
the full text of the Agreements, each of which will be filed as an exhibit to a
subsequent periodic report filed with the U.S. Securities and Exchange
Commission.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
99.1 Press release dated September 21, 2021.
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