Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Philip Evans as Chief Financial Officer
On January 16, 2020, Philip Evans, the Chief Financial Officer ("CFO") of
Emerald Expositions Events, Inc. (the "Company"), provided notice to the Board
of Directors of the Company (the "Board"), that he intends to resign from the
positions of CFO, principal financial officer and principal accounting officer
of the Company immediately subsequent to the filing of the Company's Annual
Report on Form 10-K for the year ended December 31, 2019 (such date, the
"Effective Date"). Mr. Evans will stay on with the Company as an employee
through March 31, 2020 (the "Separation Date") in order to assist in a
reasonable transition of responsibilities to his successor. Mr. Evans indicated
that his resignation is not the result of any disagreement of any sort with the
Company on any matter relating to the Company's operations, policies or
practices.
In connection with his resignation from the Company, Mr. Evans, Emerald
Expositions, LLC ("Emerald"), and, solely for the purposes of Sections 2(b) and
2(c) thereof, the Company, have entered into a Separation and Release Agreement
dated January 16, 2020 (the "Separation Agreement"). Under the Separation
Agreement, in consideration for his continued service through the Separation
Date and his agreement to a general release and certain other standard terms and
conditions, Emerald has agreed to provide Mr. Evans with the following severance
pay and benefits:
Subject to Mr. Evans' delivery of an irrevocable release of claims as provided
by the terms of the Separation Agreement, following the Separation Date, Mr.
Evans is entitled to receive (i) an amount equal to $1,000,000, payable in equal
installments over a 12-month period following the Separation Date (the
"Severance Period"); (ii) to the extent permitted under Emerald's plans,
continuation on the same terms as an active employee of medical insurance
benefits for Mr. Evans and his dependents that Mr. Evans would otherwise be
eligible to receive as an active employee through the end of the Severance
Period or, if earlier, the date on which he becomes eligible for benefits from a
subsequent employer; and (iii) payment of his annual bonus for the 2020 fiscal
year in an amount equal to his target annual bonus opportunity in respect of the
2020 fiscal year (such amount having been previsouly determined by the Chief
Executive Officer (the "CEO") of the Company in consultation with the
Compensation Committee of the Board), to be pro-rated based on the number of
days worked by Mr. Evans in 2020 and paid at the time when annual bonuses are
paid generally. In addition, notwithstanding anything to the contrary in the
Company's equity compensation plan or any award agreement with Mr. Evans, all
stock options previously granted to Mr. Evans shall continue to vest in
accordance with their terms for a one-year period following the Separation Date,
and shall continue to be exercisable by Mr. Evans for an eighteen-month period
following the Separation Date. Further, notwithstanding anything to the
contrary in the Company's equity compensation plan or any award agreement with
Mr. Evans, all restricted stock units ("RSUs") previously granted to Mr. Evans
and scheduled to vest within the one-year period following the Separation Date
shall continue to vest and settle in accordance with their terms; provided,
however, that any RSUs scheduled to vest after February 28, 2021 shall instead
vest on February 28, 2021 and settle no later than March 15, 2021.
The Separation Agreement also provides that Mr. Evans shall be subject to
perpetual confidentiality and non-disparagement covenants, and, during the
Severance Period, non-competition and non-solicitation covenants.
A complete copy of the Separation Agreement will be filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 2019.
Appointment of David Doft as Chief Financial Officer
The Company also announced that David Doft, 48, has joined the Company as of
January 16, 2020. As part of an orderly transition, Mr. Doft will succeed Mr.
Evans as the Company's CFO effective from the Effective Date. Mr. Doft will also
succeed Mr. Evans as the Company's designated principal financial officer and
principal accounting officer for Securities and Exchange Commission ("SEC")
reporting purposes, effective from the Effective Date.
Before joining the Company, Mr. Doft served as Chief Financial Officer of MDC
Partners, a leading global provider of marketing, advertising, activation,
communications and strategic consulting solutions, from August 2007 to August
2019, where he was responsible for all aspects of agency operations, financial
reporting and compliance, corporate finance, treasury and investor relations and
helped architect and launch the company's venture investing strategy, and
materially increase the company's digital expertise organically and through
acquisition. From January 2019 to March 2019, Mr. Doft also served as interim
co-CEO of MDC Partners. Prior to joining MDC Partners, Mr. Doft held a variety
of senior roles in finance and investment banking firms. Mr. Doft holds a B.S.
in Economics from the Wharton School of the University of Pennsylvania.
Mr. Doft was not selected as CFO pursuant to any arrangement or understanding
with any other person. There are no related person transactions (or proposed
related person transactions) with respect to Mr. Doft reportable under Item
5.02(c) of Form 8-K and Item 404(a) of Regulation S-K since the beginning of the
Company's last fiscal year. There are no family relationships to disclose with
respect to Mr. Doft reportable under Item 401(d) of Regulation S-K.
Doft Compensation Arrangements
On January 16, 2020, the Board approved an Employment Agreement by and among
Emerald, Mr. Doft, and, solely for the purposes of Sections 2.3 and 8.1 thereof,
the Company, effective January 16, 2020 (the "Doft Employment Agreement"). A
complete copy of the Doft Employment Agreement will be filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
Mr. Doft will serve as an employee of Emerald commencing on January 16, 2020
(the "Doft Commencement Date"), and will assume the role of CFO upon the
Effective Date. The Doft Employment Agreement provides for an indefinite term,
subject to the termination provisions of the Doft Employment Agreement
summarized below. It entitles Mr. Doft to (a) an annual base salary of $480,000;
(b) an annual bonus, with a target annual bonus equal to $520,000, dependent on
satisfaction of Company performance goals and other criteria as set by the
Board; (c) a signing bonus of $400,000, payable in two equal installments on the
first payroll date of each of 2021 and 2022, subject to Mr. Doft's continued
employment on each of December 31, 2020 and December 31, 2021, respectively (the
"Signing Bonus"); (d) eligibility to participate in all benefits programs for
which other senior executives of Emerald are generally eligible; (e) eligibility
to take an unlimited number of vacation days, pursuant to Emerald's MyTime
policy; (f) reimbursement for reasonable, documented business expenses; and (g)
perquisites in the form of (i) business class travel on flights approximately
two hours or longer; and (ii) reimbursement up to $15,000 for reasonable,
documented legal fees incurred in connection with the drafting, negotiation and
execution of the Doft Employment Agreement.
In the event of a termination of employment for any reason, Mr. Doft shall be
entitled to payment of any earned but unpaid base salary, vested benefits in
accordance with the applicable employee benefit plan, unreimbursed business
expenses, and (except in the case of a termination by Emerald for cause or by
Mr. Doft without good reason and not for death or disability (each as defined in
the Doft Employment Agreement)) earned but unpaid annual bonus for calendar
years completed prior to the termination date.
In addition, upon a termination of Mr. Doft's employment other than for cause,
death, or disability, or upon a termination for good reason, and subject to Mr.
Doft's execution and non-revocation of a general release of claims against the
Company and Emerald, Mr. Doft shall be entitled to receive: (a) an amount equal
to one times the sum of Mr. Doft's annual base salary as of the date of
termination, and (1) if such termination occurs prior to March 31, 2022, the
greater of (x) the annual bonus actually paid to Mr. Doft for the previous
calendar year, and (y) Mr. Doft's target annual bonus, or (2) if such
termination occurs on or subsequent to March 31, 2022, the annual bonus actually
paid to Mr. Doft for the previous calendar year, paid in equal installments over
12 months following his termination; (b) an amount equal to Mr. Doft's
pro-rata bonus for the year of termination, based on the actual performance of
the Company for the full year (the "Pro-Rata Bonus"), paid at the time when
annual bonuses are paid generally; (c) an amount equal to any unpaid portion of
the Signing Bonus; and (d) subject to the timely election of continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA") and Mr. Doft's copayment of premiums associated with such
coverage consistent with amounts paid by Mr. Doft during the year of
termination, monthly reimbursement of the excess costs of continued health
benefits for himself and his covered dependents for the twelve month period
following the date of termination. Upon a termination of employment due to his
death or disability, Mr. Doft is entitled to receive a cash amount equal to the
Pro-Rata Bonus, paid at the time when annual bonuses are paid generally.
Mr. Doft is subject to perpetual confidentiality and non-disparagement covenants
and, during his employment with Emerald and for 12 months immediately
thereafter, non-competition and non-solicitation covenants.
The Doft Employment Agreement also entitles Mr. Doft to receive an initial
equity grant, pursuant to the Company's 2017 Omnibus Equity Plan (the "Plan").
His initial grant shall consist of RSUs, which shall have an aggregate value of
$600,000 on the date of grant (the "Doft RSU Grant"). For future years, Mr. Doft
will be eligible to receive equity grants commensurate with his position, which
grants are anticipated to have a value of $600,000 on the date of grant, to be
determined by, and subject to increase or decrease at the discretion of, the
Compensation Committee of the Board, consistent with its approach to equity
grants to other senior executives. On January 16, 2020, the Board approved the
Doft RSU Grant, which is expected to be entered into on the Doft Commencement
Date, subject to his execution of a Restricted Stock Unit Award Agreement (the
"RSU Award Agreement"). A complete copy of the RSU Award Agreement will be filed
as an exhibit to the Company's Annual Report on Form 10-K for the year ended
December 31, 2019.
The Doft Employment Agreement also entitles Mr. Doft to receive an additional
one-time performance-based share award under the Plan, with a total award value
of up to $4,900,000 and vesting linked to the Company's achievement of certain
sustained share prices during Mr. Doft's employment, the terms of which are
summarized immediately below.
Doft Performance Equity Grant
On January 16, 2020, the Board approved a Performance Based Share Award
Agreement, by and between the Company and Mr. Doft, which is expected to be
entered into on the Doft Commencement Date (the "Performance Award Agreement"),
pursuant to which Mr. Doft shall be entitled to receive a one-time
performance-based share award under the Plan (the "Performance Award"). A
complete copy of the Performance Award Agreement will be filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
The Performance Award Agreement provides that Mr. Doft's right to receive shares
in settlement of the Performance Award shall vest based upon achievement of the
closing share prices as set forth in the schedule below for a period of at least
sixty out of the preceding ninety trading days (each such share price a "Vesting
Threshold"). Upon achievement of each relevant Vesting Threshold, Mr. Doft
shall be issued a number of shares equal to the corresponding award value
identified in the schedule below, divided by the closing price per share on the
trading day upon which the relevant Vesting Threshold was satisfied.
60/90 Trading Day Closing Share Price Award Value
(Vesting Thresholds)
At least $18.00 per Share $700,000
At least $20.00 per Share $1,000,000
At least $22.00 per Share $1,400,000
At least $24.00 per Share $1,800,000
In the event of a change in control, if the price per share paid by the buyer is
greater than or equal to any of the Vesting Thresholds above (to the extent
still unsatisfied), such portion of the Performance Award shall vest upon the
closing of such change in control by treating such price per share paid by the
buyer as having satisfied the applicable Vesting Threshold(s), and any remaining
unvested portion of the Performance Award shall be forfeited as of the closing
of such change in control.
In the event of a termination of employment for any reason, the unvested portion
of the Performance Award shall terminate, except that upon a termination of
employment other than for cause, or upon a termination for good reason within
the period that is six months prior to the execution of an agreement providing
for a change in control through the date of a change in control, any unvested
shares subject to the Performance Award shall remain eligible to vest in
accordance with the Performance Award Agreement's vesting conditions, including
in the event of a change in control. Upon a termination for cause, both vested
and unvested portions of the Performance Award shall be immediately and
automatically forfeited for no consideration.
The Performance Award Agreement provides that Mr. Doft shall not sell, transfer,
assign, pledge or otherwise encumber or dispose of any shares issued upon
settlement of any portion of the Performance Award prior to the first to occur
of (i) one year following the applicable settlement date, and (ii) the
occurrence of a change in control.
Item 7.01. Regulation FD Disclosure.
On January 16, 2020, the Company issued a press release announcing the intended
resignation of Philip Evans as CFO, and the appointment of David Doft as Mr.
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release issued by Emerald Expositions Events, Inc. dated January
16, 2020, announcing the naming of David Doft as Chief Financial
Officer.
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