Item 5.02 Appointment of Certain Officers; Departure of Directors or Certain
Officers
The Board has appointed Sue Y. Nabi, age 52, to the position of Chief Executive
Officer, to be effective by September 1, 2020. At such point in time, Peter Harf
will step down from his role as chief executive officer of the Company and will
be elevated to the role of Executive Chairman. Other than the continued vesting
of outstanding equity awards previously granted to Mr. Harf, Mr. Harf will not
receive any compensation in any form from the Company for serving as Executive
Chairman. In connection with her appointment as Chief Executive Officer,
Ms. Nabi and the Company agreed to enter into an employment agreement (the
"Employment Agreement"), a copy of which will be filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 2020.
Under the terms of the Employment Agreement, Ms. Nabi will serve as the
Company's Chief Executive Officer on an at will basis, during which time she is
entitled to an annual base salary in the amount of €3,000,000, and to
participate in certain employee benefit plans, such as private health insurance,
life insurance, retirement benefits, relocation and financial assistance plan
and programs. Ms. Nabi will also become a member of the Board of Directors of
the Company on her employment start date.
Ms. Nabi will receive, in January 2021 or during the next open trading window
thereafter, a one-time sign-on grant of restricted stock units (the "Award"),
which will vest and settle in 10,000,000 shares of the Company's Class A Common
Stock, par value $0.01 per share (the "Common Stock") on each of August 31,
2021, August 31, 2022 and August 31, 2023, subject to her continued employment
through each such date. If Ms. Nabi is terminated by the Company without cause
or dies or becomes disabled prior to the first anniversary of her employment
commencement date, the first tranche of the Award will vest upon such
termination. If Ms. Nabi is terminated by the Company without cause, dies or
becomes disabled on or following the first anniversary of her employment start
date but prior to the second anniversary of such start date, she will vest
pro-rata in the second tranche of the Award in an amount determined by
multiplying such tranche by a fraction, the numerator of which is the number of
days elapsed from the first anniversary of the start date to the date of her
termination and the denominator of which is 365. If Ms. Nabi is terminated by
the Company without cause, dies or becomes disabled on or following the second
anniversary of her start date, she will vest pro-rata in the third tranche of
the Award in an amount determined by multiplying such tranche by a fraction, the
numerator of which is the number of days elapsed from the second anniversary of
the start date to the date of her termination and the denominator of which is
365. The vesting and issuance of the underlying shares upon such termination
will be conditioned upon Ms. Nabi executing a general release of claims in favor
of the Company and its affiliates. From the date the first tranche of the Award
vests until the date that is 36 months following Ms. Nabi's employment start
date, Ms. Nabi will be required to retain ownership of 10,000,000 shares of
Class A Common Stock, except to the extent necessary to make payments in
relation to any tax liabilities associated with the grant and/or vesting of the
first tranche. In connection with this Award, Cottage Holdco B.V., the Company's
largest stockholder and a wholly-owned subsidiary of JAB Holding Company
s.a.r.l., has agreed to transfer to Ms. Nabi (either directly or through
contributing to the Company) one-half of the total number of shares of Common
Stock owed to Ms. Nabi if and when the Award vests. Ms. Nabi will not
participate in the Company's annual cash incentive plans or receive equity
incentive awards in addition to the Award.
Upon Ms. Nabi's separation from service by the Company for any reason, Ms. Nabi
will adhere to a 12-month post-termination non-solicitation restriction, a
12-month post-termination noncompetition restriction, and a perpetual
confidentiality obligation. The non-compete provision shall not apply to Orveda
Limited and its subsidiaries, a business owned by Ms. Nabi.
The foregoing description of the Employment Agreement is qualified in its
entirety by reference to the full text of the Employment Agreement, a copy of
which will be filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 2020. In addition, the foregoing
description of the contribution of shares by Cottage Holdco B.V. with respect to
Ms. Nabi's Award is qualified in its entirety by reference to the full text of
an equity transfer agreement, a copy of which will also be filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the period ended September
30, 2020.
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Ms. Nabi is the founder and chief executive officer of the new-age luxury
skincare line, Orveda. Ms. Nabi began her career at L'Oréal in 1993 and in 2005,
she became the Worldwide President of L'Oréal where she helped boost the growth
of its makeup brands. In 2009, Ms. Nabi became the Worldwide President of
Lancôme where she contributed to its revival, including breakthrough product and
brand successes. Ms. Nabi has an Advanced Master's degree in Marketing
Management from ESSEC (Paris Business School) and an engineering degree in
Agronomy and Environment. There is no family relationship between Ms. Nabi and
any director or executive officer of the Company. There have been no
transactions, nor are there any currently proposed transactions, to which the
Company or any of its subsidiaries was or is to be a participant in which
Ms. Nabi, or any member of her immediate family, had, or will have, a direct or
indirect material interest.
Item 8.01 Other Events.
On July 2, 2020, the Company issued a press release (the "Press Release")
announcing the appointment of Ms. Nabi. A copy of the press release is furnished
herewith as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number: Description
99.1 Press Release, dated July 2, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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