Blog: CUSTOM TRUCK ONE SOURCE, INC. : Change in Directors or Principal Officers, Regulation FD Disclosure, Other Events, Financial Statements and Exhibits (form 8-K) –

Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 1, 2022, the Board of Directors (the “Board”) of Custom Truck One
Source, Inc. (the “Company”) appointed Christopher J. Eperjesy to serve as Chief
Financial Officer of the Company, effective August 15, 2022. Mr. Eperjesy
succeeds Todd Barrett, who will no longer serve as Interim Chief Financial
Officer, effective August 15, 2022, and will continue to serve as Chief
Accounting Officer of the Company.

Mr. Eperjesy, age 54, most recently served as the Chief Financial Officer of
Clarios International Inc., a global energy storage company that provides
low-voltage battery technologies for vehicles, from August 2020 to June 2022.
From December 2018 through August 2020, he was Senior Vice President and Chief
Financial Officer of Cooper Tire & Rubber Company, a company that specializes in
the design, manufacture, marketing and sales of automobile and truck tires.
Before joining Cooper Tire & Rubber Company, Mr. Eperjesy was Chief Financial
Officer of The IMAGINE Group, a provider of printed and visual communications
solutions, from August 2017 to December 2018. Prior to IMAGINE, Mr. Eperjesy was
Chief Financial Officer of Arctic Cat Inc., a global manufacturer of snowmobiles
and all-terrain vehicles, from February 2015 to April 2017. Prior to that, Mr.
Eperjesy spent 13 years at Twin Disc Inc., a company that designs, manufactures
and distributes power transmission equipment, where he was Chief Financial
Officer, Vice President of Finance, Treasurer and Secretary. Mr. Eperjesy began
his career as a CPA at Coopers & Lybrand. He holds a bachelor’s degree in
Accounting from the University of Michigan and an MBA from Indiana University.

In connection with Mr. Eperjesy’s appointment as Chief Financial Officer of the
Company, the Company and Mr. Eperjesy entered into an employment agreement,
dated August 2, 2022 (the “Employment Agreement”), pursuant to which Mr.
Eperjesy will serve as Chief Financial Officer commencing on August 15, 2022 for
an initial term of five years, subject to automatic renewal for successive
one-year periods. Pursuant to the Employment Agreement, Mr. Eperjesy (i) will
receive a base salary of $585,000; (ii) will be eligible for a discretionary
annual cash bonus, targeted at 65% of his base salary, which annual bonus for
2022 will be pro-rated based on the portion of the year Mr. Eperjesy is employed
but will not be less than $150,000; and (iii) will be eligible to receive equity
incentive awards under the Company’s Amended and Restated 2019 Omnibus Incentive
Plan (the “Plan”), as determined by the Board or its compensation committee.
Pursuant to the Employment Agreement, subject to Board approval, Mr. Eperjesy is
also entitled to receive an initial equity incentive award under the Plan
covering a total of 180,000 shares. Effective upon Mr. Eperjesy’s appointment as
Chief Financial Officer, the Board has granted Mr. Eperjesy 90,000 time-based
restricted stock units under the Plan that vest in four equal annual
installments beginning on April 1, 2023 and 90,000 performance-based restricted
stock units under the Plan that vest based on the attainment of certain
performance conditions.

In addition, in connection with Mr. Eperjesy’s relocation to the Kansas City,
Missouri area, the Company has agreed to reimburse his reasonable, documented
moving expenses, up to six months of temporary housing expenses, and airfare and
lodging for Mr. Eperjesy and his immediate family for up to two trips to search
for homes. Mr. Eperjesy is also entitled to receive a one-time cash signing
bonus equal to $200,000 and a relocation stipend in the amount of $150,000, in
each case, subject to continued employment through the payment date. In the
event that Mr. Eperjesy’s employment is terminated either by the Company for
“cause” or by Mr. Eperjesy without “good reason” (as such terms are defined in
the Employment Agreement), before February 15, 2024, Mr. Eperjesy will be
required to repay to the Company the full gross amount of any of the above
relocation stipend, relocation reimbursement or signing bonus that have been
paid to him.

Under the Employment Agreement, in the event that Mr. Eperjesy’s employment is
terminated either by the Company without “cause” or by Mr. Eperjesy for “good
reason” or in connection with the non-renewal of the term of employment by the
Company, subject to his execution and non-revocation of a general release of
claims and continued compliance with his restrictive covenant obligations, as
described below, Mr. Eperjesy would be entitled to: (i) 100% of his base salary,
payable in installments during the 12-month period following his termination;
(ii) any prior year’s earned but unpaid annual bonus; (iii) a pro-rated annual
bonus for the year of termination based on actual performance; and (iv)
continued participation in the Company’s group health plan for up to 12 months.
In the event that Mr. Eperjesy’s employment is terminated due to his death or
disability, Mr. Eperjesy or his estate or beneficiaries would be entitled to
continued participation in the Company’s group health plan for up to 12 months.

In connection with the Employment Agreement, the Company also entered into a
restrictive covenant agreement with Mr. Eperjesy, pursuant to which Mr. Eperjesy
is subject to certain restrictive covenants, including confidentiality,
non-disparagement and 12-month post-termination non-competition and
non-solicitation covenants.

In connection with Mr. Eperjesy’s appointment, the Company also entered into an
indemnification agreement with Mr. Eperjesy, providing for the indemnification
of and advancement of expenses permitted by Delaware law for claims, suits or
proceedings arising out of an officer’s service to the Company.


The foregoing descriptions of the Employment Agreement and the indemnification
agreement do not purport to be complete, and are qualified in their entirety by
reference to the full text of the Employment Agreement and the Form
Indemnification Agreement, respectively, which are filed herewith as Exhibit
10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On August 4, 2022, the Company issued a press release announcing the appointment
of Mr. Eperjesy as Chief Financial Officer of the Company. A copy of the press
release is furnished herewith as Exhibit 99.1 and incorporated herein by

The information set forth in this Item 7.01, including Exhibit 99.1, is being
furnished and shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that Section, and shall not be deemed to be
incorporated by reference into any of the Company’s filings under the Securities
Act of 1933, as amended, or the Exchange Act, whether made before or after the
date hereof and regardless of any general incorporation language in such
filings, except to the extent expressly set forth by specific reference in such
a filing.

Item 8.01. Other Events.

On August 2, 2022, the Board approved a stock repurchase program that authorizes
the repurchase of up to $30 million of shares of the Company’s common stock.
Under the repurchase program, repurchases can be made from time to time using a
variety of methods, which may include open market purchases, privately
negotiated transactions, or otherwise, all in accordance with the rules of the
Securities and Exchange Commission and other applicable legal requirements. The
specific timing, price and size of purchases will depend on prevailing stock
prices, general economic and market conditions, and other considerations. The
repurchase program does not obligate the Company to acquire any particular
amount of its common stock, and the repurchase program may be suspended or
discontinued at any time at the Company’s discretion.

Forward-Looking Statements

This 8-K includes “forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities Litigation Reform Act
of 1995 and within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and Section 27A of the Securities Act of 1933, as amended.
When used in this 8-K, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,”
“will,” “should,” “future,” “propose” and variations of these words or similar
expressions (or the negative versions of such words or expressions) are intended
to identify forward-looking statements. These forward-looking statements are not
guarantees of future performance, conditions or results, and involve a number of
known and unknown risks, uncertainties, assumptions and other important factors,
many of which are outside the Company’s management’s control, that could cause
actual results or outcomes to differ materially from those discussed in this
8-K. This 8-K is based on certain assumptions that the Company’s management has
made in light of its experience in the industry, as well as the Company’s
perceptions of historical trends, current conditions, expected future
developments and other factors the Company believes are appropriate in these
circumstances. As you read and consider this 8-K, you should understand that
these statements are not guarantees of performance or results. Many factors
could affect the Company’s actual performance and results and could cause actual
results to differ materially from those expressed in this 8-K. Important
factors, among others, that may affect actual results or outcomes include:
difficulty in integrating Nesco Holdings, Inc. and Custom Truck One Source, L.P.
(“Custom Truck LP”) businesses and fully realizing the anticipated benefits of
the Acquisition (as defined below), as well as significant transaction and
transition costs that we will continue to incur following the acquisition by
Nesco Holdings II, Inc. of Custom Truck LP (the “Acquisition”); material
disruptions to our operation and manufacturing locations as a result of public
health concerns, including COVID-19, equipment failures, natural disasters, work
stoppages, power outages or other reasons; the cyclical nature of demand for our
products and services and our vulnerability to industry, regional and national
downturns, which impact, among others, our ability to manage our rental
equipment; our inability to obtain raw materials, component parts and/or
finished goods in a timely and cost-effective manner, and our inability to
manage our rental equipment in an effective manner; any further increase in the
cost of new equipment that we purchase for use in our rental fleet or for our
sales inventory; disruptions in our supply chain as a result of the ongoing
COVID-19 pandemic; aging or obsolescence of our existing equipment, and the
fluctuations of market value thereof; our inability to recruit and retain the
experienced personnel, including skilled technicians, we need to compete in our
industries; disruptions in our information technology systems or a compromise of
our system security, limiting our ability to effectively monitor and control our
operations, adjust to changing market conditions, and implement strategic
initiatives; unfavorable conditions in the capital and credit markets and our
inability to obtain additional capital as required; our dependence on a limited
number of manufacturers and suppliers and on third-party contractors to provide
us with various services to assist us with conducting our business; potential
impairment charges; our exposure to various risks related to legal proceedings
or claims, and our failure to comply with relevant laws and regulations,
including those related to occupational health and safety, the environment,
government contracts, and data privacy and data security; the interest of our
majority stockholder, which may not be consistent with the other stockholders;
our significant indebtedness, which may adversely affect our financial position,
limit our available cash and our access to additional capital, prevent us from
growing our business and increase our risk of default; our inability to attract
and retain highly skilled personnel and our inability to retain our senior
management; our inability to generate cash, which could lead to a default;
significant operating and financial restrictions imposed by the Indenture and
the ABL Credit Agreement; increases in unionization rate in our workforce;
changes in interest rates, which could increase our debt service obligations on
the variable rate indebtedness and decrease our net income and cash flows; and
the phase-out of LIBOR and uncertainty as to its replacement. For a more
complete description of these and other possible risks and uncertainties, please
refer to the Company’s Annual Report on Form 10-K for the year ended December
31, 2021, and its subsequent reports filed with the Securities and Exchange
Commission. All forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
foregoing cautionary statements.


Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.   Description
10.1            Employment Agreement, by and between the Company and Christopher J.
              Eperjesy, dated August 2, 2022
10.2            Form Indemnification Agreement (incorporated by reference to Exhibit
              10.7 of the Company's Current Report on Form 8-K filed on April 2,
99.1            Press release issued by Custom Truck One Source, Inc. on August 4,
104           Cover Page Interactive Data File (formatted as Inline XBRL and contained
              in Exhibit 101)


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