UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On May 6, 2022, the President and Chief Executive Officer of Nicholas Financial, Inc. (the “Company”) informed the Board of Directors of the Company (the “Board”) of his intention to resign his position as President and Chief Executive Officer, and to retire from the Board, in each case, effective as of May 9, 2022.
On May 10, 2022, the Company entered into a separation and release of claims agreement with Mr. Marohn. Pursuant to the agreement, Mr. Marohn’s resignation is effective as of May 9, 2022. In addition to unpaid salary and accrued vacation pay through May 9, 2022, Mr. Marohn is entitled to receive a severance payment of $131,250 and continuation of COBRA benefits for 4.5 months. His restricted stock awards continue to be governed by the award agreements for each award, with all unvested restricted stock forfeited. The separation and release of claims agreement contains a one year non-compete provision, and prohibits Mr. Marohn from soliciting customers for one year and Company employees for two years. The separation and release of claims agreement is attached hereto as Exhibit 10.1.
On May 9, 2022, the Board appointed Michael Rost, 51, as interim Chief Executive Officer, effective immediately. Mr. Rost has worked at the Company for more than 20 years. Prior to his appointment, Mr. Rost served as Vice President of Branch Operations for the Company since April 2021, as Divisional Vice President from June 2018 until April 2021, as District Manager from December 2010 until June 2018, and as Branch Manager from December 2001 until December 2010.
Item 7.01 Regulation FD Disclosure
On May 10, 2022, the Company issued a press release in connection with Mr. Marohn’s resignation and Mr. Rost’s appointment, which is attached hereto 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
Item 9.01 Financial Statements and Exhibits
Exhibit # |
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Description |
10.1 |
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Separation and General Release Agreement between Nicholas Financial, Inc. and Doug Marohn |
99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
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NICHOLAS FINANCIAL, INC. |
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(Registrant) |
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Date: May 10, 2022 |
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/s/ Irina Nashtatik |
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Irina Nashtatik |
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Chief Financial Officer (Principal Financial Officer) |
Exhibit 10.1
SEPARATION AND GENERAL RELEASE AGREEMENT
This SEPARATION AND GENERAL RELEASE AGREEMENT (the “Agreement”) is
entered into and effective as of May 9, 2022 (the “Effective Date”), by and between Nicholas Financial, Inc. (the “Company”), and Douglas Marohn (“Executive”). Company and Executive are sometimes hereinafter referred to individually as a “Party” and together as the “Parties.”
WHEREAS, Executive has served as the President and Chief Executive Officer of the Company since December 2017;
WHEREAS, Executive is currently employed by the Company as its President and Chief Executive Officer pursuant to an Employment Agreement effective as of July 8, 2020 (the “Employment Agreement”);
WHEREAS, Executive has communicated to the Board of Directors his decision to resign from his positions as a director, officer, and employee, of the Company, effective as of May 9, 2022; and
WHEREAS, Executive and Company wish to resolve all matters related to the cessation of Executive’s employment with Company on the terms and conditions expressed in this Agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
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executors, administrators, attorneys, agents, representatives and assigns, does hereby release, absolve and discharge the Company and its predecessors, parents, subsidiaries, and any affiliates, and the respective officers, directors, trustees, owners, shareholders, employees, insurers, benefit plans, attorneys, agents, and representatives, past and present, (collectively referred to as the “Released Parties”) from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, grievances, wages, vacation or PTO payments, severance payments, obligations, commissions, overtime payments, debts, profit sharing claims, expenses, damages, judgments, orders and liabilities of whatever kind or nature in state or federal law, equity or otherwise, whether presently known or unknown to Executive (collectively, the “Claims”), which Executive now owns or holds or has at any time owned or held as against the Released Parties, or any of them, including specifically but not exclusively and without limiting the generality of the foregoing, any and all Claims known or unknown, suspected or unsuspected: (1) arising out of Executive’s employment with the Company, Executive’s Employment Agreement, resignation of Executive’s positions as described in Section 1, or the cessation of Executive’s employment and/or other service with Company or (2) arising out of or in any way connected with any claim, loss, damage or injury whatsoever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of the Released Parties committed or omitted on or before the date this Agreement is executed by Executive.
For the avoidance of doubt, this Release does not prohibit Executive from bringing any claims based on the future conduct of any Released Party after the Effective Date of this Agreement.
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Executive further acknowledges and understands that Executive may revoke this Agreement within seven (7) days after its execution by Executive by sending a written letter of revocation post-marked no later than seven (7) days after Executive’s execution of this Agreement via email to:
Jeff Royal Chairman of the Board
jroyal@dundeebanking.com
Executive further acknowledges and understands that this Agreement is not effective or enforceable until the revocation period has expired and that Executive shall not receive or be entitled to any payment or benefit hereunder until after the expiration of the revocation period, provided that Executive has not revoked the Agreement during such period.
The “Effective Date” of this Agreement is the eighth (8th) day following execution hereof by Executive , provided that Executive has not revoked this Agreement prior to the expiration of the revocation period described herein.
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connection with any Commission or other agency proceeding concerning matters covered by this Agreement. Further, nothing in this Agreement shall be construed as to prohibit Executive from filing an action to enforce his rights under this Agreement.
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registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
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Company representatives, its counsel, or other designees at mutually convenient and reasonable times and places with respect to any items within the scope of this provision; (ii) to provide truthful testimony regarding same to any court, agency, or other adjudicatory body; and (iii) to provide Company with notice of contact by any adverse party or such adverse party’s representative, except as may be required by law. The Company will reimburse Executive for all reasonable, necessary, and documented expenses he incurs in complying with this Section.
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forums, make any statement or release any information about the Company which encourages others to make any statements or provide any information designed to embarrass, disparage or criticize the Company including, without limitation, the Company and its products, services, research, subsidiaries and/or affiliated or Related Entities, officers, directors, attorneys, and employees. Nothing in this Agreement prohibits Executive from truthfully reporting violations of federal or state law or regulations to any regulatory, administrative or law enforcement agency, making other disclosures that are protected under any applicable federal or state law or regulation, or providing testimony or information in response to a subpoena or discovery request. Executive agrees that this is a material term to this Agreement.
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[signature page follows]
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PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS BEEN ADVISED THAT THIS RELEASE IS A BINDING AND LEGAL DOCUMENT. EXECUTIVE FURTHER AGREES THAT HE HAS HAD, AND IN CONSULTANTION WITH COUNSEL, HAS ELECTED TO WAIVE A RIGHT TO A TWENTY-ONE (21) DAY PERIOD TO REVIEW THE PROVISIONS OF THIS RELEASE, AND THAT IN EXECUTING THIS RELEASE EXECUTIVE HAS ACTED VOLUNTARILY AND HAS NOT RELIED UPON ANY REPRESENTATION MADE BY COMPANY OR ANY OF ITS EXECUTIVES OR REPRESENTATIVES REGARDING THIS RELEASE’S SUBJECT MATTER AND/OR EFFECT. EXECUTIVE HAS READ AND FULLY UNDERSTANDS THIS RELEASE AND VOLUNTARILY AGREES TO ITS TERMS.
IN WITNESS WHEREOF, the Parties hereto have executed this Separation and Release Agreement as of the date written below.
Date: May 9, 2022 /s/ Douglas Marohn
Douglas Marohn
Date: May 10, 2022 NICHOLAS FINANCIAL, INC.,
By:_/s/ Jeffrey C. Royal
Name: Jeffrey C. Royal
Title: Chairman of the Board of Directors
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Exhibit 99.1
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FOR IMMEDIATE RELEASE |
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Nicholas |
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Contact: Irina Nashtatik |
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NASDAQ: NICK |
Nicholas Financial, Inc. Corporate Headquarters 2454 McMullen-Booth Rd. Building C, Suite 501 Clearwater, FL 33759 |
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CFO Ph # (727)-726-0763 |
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Web site: www.nicholasfinancial.com |
Nicholas Financial Announces Appointment of Interim CEO
May 10, 2022 – Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK) announced today the appointment of Michael Rost as interim Chief Executive Officer of the Company effective May 9, 2022. Mr. Rost has worked at the Company for more than 20 years, most recently in the position of Vice President of Branch Operations. The Board appointed Mr. Rost in connection with the resignation by Douglas Marohn from his position as the Company’s President and Chief Executive Officer.
Jeffrey Royal, the Chairman of the Company’s Board of Directors, commented: “The Board is excited to have Mike take over executive leadership on an interim basis. Mike has been successfully managing branches for many years now, growing originations while maintaining strict discipline on loan terms. We believe that Mike’s close involvement with Company operations positions him to lead the Company effectively following Doug’s departure. The Board intends to begin a search for a permanent President and Chief Executive Officer shortly, and expects that Mike will be a candidate.”
About Nicholas Financial, Inc.
Nicholas Financial, Inc. (NASDAQ:NICK) is a specialized consumer finance company, operating branch locations in both Southeastern and Midwestern U.S. States. The Company engages primarily in acquiring and servicing automobile finance installment contracts (“Contracts”) for purchases of used and new automobiles and light trucks. Additionally, Nicholas Financial originates direct consumer loans (“Direct Loans”) and sells consumer-finance related products. For an index of Nicholas Financial, Inc’s new releases or to obtain a specific release, please visit our website at www.nicholasfinancial.com.
Cautionary Note regarding Forward-Looking Statements
This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, that represent the Company’s current expectations or beliefs concerning future events. Statements other than those of historical fact, as well as those identified by words such as “anticipate,” “estimate,” “intend,” “plan,” “expect,” “project,” “believe,” “may,” “will,” “should,” “would,” “could,” “probable” and any variation of the foregoing and similar expressions are forward-looking statements. Such forward-looking statements are inherently subject to risks and uncertainties. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: the ongoing impact of the COVID-19 pandemic and the mitigation efforts by governments and related effects on our financial condition, business operations and liquidity, our customers, our employees, and the overall economy; recently enacted, proposed
or future legislation and the manner in which it is implemented; the Company’s success in finding a suitable permanent replacement for Mr. Marohn; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, the Securities and Exchange Commission (SEC), Department of Justice, U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). All forward-looking statements and cautionary statements included in this document are made as of the date hereof based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement or cautionary statement.
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Document and Entity Information |
May 10, 2022 |
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Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | May 10, 2022 |
Entity Registrant Name | NICHOLAS FINANCIAL, INC. |
Entity Central Index Key | 0001000045 |
Entity File Number | 0-26680 |
Entity Tax Identification Number | 59-2506879 |
Entity Incorporation, State or Country Code | Z4 |
Entity Address, Address Line One | 2454 McMullen Booth Road |
Entity Address, Address Line Two | Building C |
Entity Address, City or Town | Clearwater |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33759 |
City Area Code | 727 |
Local Phone Number | 726-0763 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock |
Trading Symbol | NICK |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
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