Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 15, 2022, Nicholas Financial, Inc. (“the Company”) announced
Michael Rost’s Employment Agreement as Chief Executive Officer through August
29, 2023. The material terms of Mr. Rost’s Employment Agreement are also
disclosed in the Company’s Form 8-K filed on the date thereof.
Salary and Bonus: Mr. Rost’s initial base salary will be no less than $250,000.
The Employee shall receive, and the Company shall pay, such bonuses as shall be
determined by or on behalf of the Compensation Committee (the “Committee”). The
Base Salary may be increased by the Committee in its sole discretion.
Stock Purchase Matching Program: The Company shall match 100% of the purchases
of common stock of the Company that the Employee makes during the time period
commencing on the Effective Date and ending on August 29, 2023 (if the Agreement
is not automatically renewed at the end of the Initial Term in accordance with
Section 2 hereof) or August 29, 2024 (if the Agreement is automatically renewed
at the end of the Initial Term in accordance with Section 2 hereof) (in either
case, the “Stock Purchase Matching Period”) (so long as the Employee remains
employed through the date of such purchase); provided, however, that (i) such
shares of common stock issued by the Company pursuant to the preceding clause
(the “Matching Stock”) shall be restricted stock and shall vest as follows: (v)
one-third (1/3) of the Matching Stock shall vest on the first anniversary of the
date on which the Employee purchased the common stock that triggered the
Company’s matching obligation with respect to such Matching Stock (a “Triggering
Purchase”), one-third (1/3) of the Matching Stock shall vest on the second
anniversary of the date of the Triggering Purchase, and (x) one-third (1/3) of
the Matching Stock shall vest on the third anniversary of the date of the
Triggering Purchase, provided, further, that such shares of Matching Stock shall
only vest if the Employee is employed by the Company on such vesting date
(subject to accelerated vesting as specified in Section 5(f) and 5(g) hereof),
and (ii) the Company’s matching obligation shall be limited to a number of
shares of Matching Stock corresponding to (y) $50,000 for Triggering Purchases
occurring between the Effective Date and August 29, 2023 and (z), if the
Agreement is automatically renewed at the end of the Initial Term in accordance
with Section 2 hereof, $50,000 for Triggering Purchases occurring between August
30, 2023 and August 29, 2024.
Benefits: Mr. Rost will be entitled to fringe benefits and perquisites
consistent with the practices of the Company for similarly situated executives.
Termination without Cause or for Good Reason: The Company shall pay the Employee
(subject to the provisions of Section 6 of this Agreement) a one-time, lump-sum
severance payment equal to 100% of the Employee’s Base Salary for one year of
employment in effect at the time of such termination.
If a Change of Control occurs (as defined in the Employment Agreement), Mr. Rost
will instead receive a one-time, lump-sum severance payment equal to 100% of his
base salary. Termination without Cause or for Good Reason, whether or not it
occurs within 12 months of a Change of Control, will entitle Mr. Rost to up to
12 months’ benefits and reimbursement of up to $7,500 in
consultant/legal/accounting expenses, and will fully accelerate the vesting of
all equity compensation except for restricted stock issued as part of the
matching program described above.
All restrictions on any restricted stock or restricted stock unit awards made to
the Employee by the Company or its affiliates shall lapse such that Employee is
fully and immediately vested in such awards upon such termination of employment.
100% of Matching Stock held by Employee at the time of termination shall become
For these purposes, “Change of Control” is described in Appendix A of the
Non-Compete: Mr. Rost will be subject to a non-compete for a period of one year
following his termination.
Item 7.01 Regulation FD Disclosure
On September 15, 2022, the Company issued a press release on it’s website in
connection with the events reported above. A copy of the press release is
furnished as Exhibit 99-1.
In accordance with General Instruction B.2. of Form 8-K, the information in this
Item 7.01 and Exhibit 99.1 hereto is being furnished for informational purposes
only and shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, except as otherwise
expressly stated in such filing.
The statements contained in this Current Report on Form 8-K that are purely
historical are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 31E of the Securities Act of 1934,
including statements regarding the Company’s expectations, hopes, beliefs,
intentions, or strategies regarding the future and including the Company’s
operating margin and rolling average annual growth in tangible book value per
share, constitute forward-looking statements. Investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements as a result of various
forward-looking statements included in this document are based on information
available to the Company on date hereof and the Company assumes no obligation to
update such forward-looking statement. Prospective investors should also consult
the risks described from time to time in the Company’s Reports on Form 10-K,
10-Q and 8-K and Annual Reports to Shareholders.
Item 9.01 Financial Statements and Exhibits
Exhibit # Description Employment Agreement between Nicholas Financial, Inc. and Michael Rost, 10.1 dated September 14, 2022 99.1 Press Release dated September 15, 2022 Cover Page Interactive Data File (embedded within the Inline XBRL 104 document)
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