Delaware | 1-37540 | 47-4168492 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
1 East Armour Boulevard, Kansas City, Missouri | 64111 | |||
(Address of principal executive offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
HOSTESS BRANDS, INC. | |||
Date: September 18, 2017 | By: | /s/ Thomas Peterson | |
Name: | Thomas Peterson | ||
Title: | Executive Vice President, Chief Financial Officer |
Exhibit No. | Description of Exhibits | |
10.1 |
(a) | “Annual Compensation Amount’’ means an Eligible Employee’s Base Salary and Bonus Amount, in each case, immediately prior to the Termination Date and determined without giving effect to any reduction which is alleged to constitute Good Reason. |
(b) | “Base Salary” means an Employee’s annual base salary and does not include any other compensation including but not limited to, incentive bonuses, allowances or any other type of regular payment. |
(c) | “Board” means the Board of Directors of the Company. |
(d) | “Bonus Amount” means an Eligible Employee’s target annual incentive cash bonus. |
(e) | “Cause” means, in the context of an Employee’s termination or separation from employment with the Company, an Employee’s (i) neglect, refusal or failure (other than by reason of illness, accident or other physical or mental incapacity), in any material respect, to attend to duties as assigned by the Company; (ii) failure in any material respect to comply with any terms of employment as expressed in an offer or employment letter, communication from management generally or specifically to said employee or otherwise; (iii) failure to successfully complete a performance improvement plan; (iv) failure to follow the established, reasonable and material policies, standards, and regulations of the Company or direction from the Board; (v) fraud, misappropriation of funds or other willful engagement in misconduct injurious to the Company; or (vi) conviction in a court of law of, or pleading of guilty or nolo contendere to, any crime that constitutes a felony in the jurisdiction involved. |
(f) | “Change in Control” shall have the meaning ascribed to such term in Section 12.2 the Company’s 2016 Equity Incentive Plan, as amended from time to time (or any successor thereto). |
(g) | “Change in Control Termination” means any termination of employment of (a) an Eligible Employee (i) by the Company (other than for Cause and other than during an Eligible Employee’s Disability) within twelve (12) months following a Change in Control, or (ii) at the request of an acquirer or potential acquirer in connection with, or prior to, a Change in Control; provided that, any termination of the employment of an Eligible Employee will not be considered a Change in Control Termination if the Eligible Employee is offered comparable employment by the Company or its successors, defined as a position having a comparable role (e.g., CFO) of the go-forward entity with similar or greater span of responsibility and with comparable compensation and benefit opportunities, regardless of whether the Eligible Employee accepts such offer of employment or (b) a Level 2 Eligible Employee by such Level 2 Eligible Employee for Good Reason within twelve (12) months following a Change in Control. |
(h) | “Code” means the Internal Revenue Code of 1986, as amended. |
(i) | “Company” means Hostess Brands, Inc. and its subsidiaries. |
(j) | “Disability” shall mean, unless otherwise defined in an individual agreement the Employee has been unable to perform the essential duties, responsibilities and functions of Employee’s position with the Company by reason of any medically determinable physical or mental impairment for 180 days in any one-year period and has qualified to receive long-term disability payments under the Company’s long-term disability policy, as may be in effect from time to time. Employee shall cooperate in all respects with the Company if a question arises as to whether Employee has become subject to a Disability (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists selected by the Company and authorizing such medical doctors and other health care specialists to discuss Employee’s condition with the Company). Notwithstanding the foregoing, in the event that a Participant is party to an employment, consulting, severance or other service-related agreement with the Company and such agreement contains a definition of “Disability,” the definition of “Disability” set forth above shall be deemed replaced and superseded, with respect to such Employee, by the definition of “Disability” used in such agreement. |
(k) | “Effective Date” means September 12, 2017. |
(l) | “Eligible Employee” means collectively Level 1 Eligible Employees and Level 2 Eligible Employees. |
(m) | “Employee” means any individual who is employed full-time by the Company and who is regularly scheduled to work at least 30 hours per week for the Company. |
(n) | “Good Reason” means the occurrence of any one or more of the following without the Level 2 Eligible Employee’s written consent: (i) a material reduction in the Level 2 Eligible Employee’s then-current Base Salary or Bonus Amount; (ii) a material diminution in the Level 2 Eligible Employee’s authorities, duties, or responsibilities; (iii) the Company’s requiring the Level 2 Eligible Employee to be based at an office location which is at least fifty (50) miles from his or her then-current office location and which materially increases such Level 2 Eligible Employee’s travel time from his or her then current residence; or (iv) failure of any successor of the Company to expressly assume the Plan for a minimum period of twelve (12) months from the date of Change in Control; provided, that a Level 2 Eligible Employee may not rely on any particular action or event as a basis for terminating his or her employment due to Good Reason unless he or she delivers a notice based on that action or event within 90 days after its occurrence and the Company has failed to correct the circumstances cited by the Level 2 Eligible Employee as constituting Good Reason within 30 days of receiving such notice, and the Level 2 Eligible Employee terminates employment within 60 days following the Company’s failure to correct. However, notwithstanding any language to the contrary above, no event shall be considered to constitute Good Reason if the Level 2 Eligible Employee is offered comparable employment, defined as a position having a comparable role (e.g., CFO) of the go-forward entity with similar or greater span of responsibility and with comparable compensation and benefit opportunities, with respect to his or her position without giving effect to the events allegedly constituting Good Reason, by the Company or any subsidiary or affiliate of the Company, regardless of whether the Level 2 Eligible Employee accepts such offer of employment. |
(o) | “Level 1 Eligible Employee” means each Employee who is employed at an internally designated Vice President level or has otherwise been designated in writing by the CEO of the Company or his designee. For the avoidance of doubt, Divisional or Channel Vice Presidents are not Level 1 Eligible Employees unless designated in writing by the CEO of the Company or his designee. |
(p) | “Level 2 Eligible Employee” means each Employee who is employed at an internally designated Senior Vice President level or above or has otherwise been designated in writing by the CEO of the Company or his designee. |
(q) | “Payment Commencement Date” means the first payroll date after the Eligible Employee’s execution and non-revocation of the Company’s Agreement and Release, subject to the provisions of Section 6.7(d). |
(r) | “Plan” means the HB Key Executive Severance Benefit Plan as amended from time to time. |
(s) | “Plan Administrator’’ means the Administrative Committee of the Company (the “Administrative Committee”). The Administrative Committee may delegate any or all its powers and responsibilities as Plan Administrator to an individual, a committee, or both. |
(t) | “Qualifying Termination” means any termination of employment of an Eligible Employee that does not constitute a Change in Control Termination, and is by the Company other than for Cause, and other than during the Eligible Employee’s Disability, provided, that, any termination of the employment of an Eligible Employee will not be considered a Qualifying Termination if the Eligible Employee is offered comparable employment, defined as a position having a comparable role (e.g., CFO) of the go-forward entity with similar or greater span of responsibility and with comparable compensation and benefit opportunities, by the Company or its successors, regardless of whether the Eligible Employee accepts such offer of employment. |
(u) | “Restricted Period” means the specific period of time, as set forth in sections 5.1 and 5.2, throughout which an Eligible Employee cannot and will not, directly or indirectly, (i) as an employee, agent, partner, consultant, representative, contractor or in any other capacity, work for a competitor of the Company in the in-store bakery or sweet baked goods business, (ii) engage, recruit, solicit for employment or engagement, offer employment to or hire, or otherwise seek to influence or alter any relationship with any person who is an employee of the Company or (iii) solicit, call on, divert, negotiate with or communicate with any customer or distributor of the Company with whom the Eligible Employee had contact during the final one (1) year period of Eligible Employee’s employment with the Company for the purpose of providing or selling competitive products or services to those of the Company or diverting or inducing the diversion of business from the Company. |
(v) | “Severance Period” means the period of time during which an Eligible Employee will receive payments under the Plan. |
(w) | “Termination Date” means the date on which a Qualifying Termination or Change in Control Termination occurs. For the avoidance of doubt, the determination of the Termination Date shall be made consistent with the definition of “separation from service” under Section 409A (as defined in Section 6.7 below). |
Eligible Employee | Severance Period | Restricted Period | Cash Severance Amount |
Chief Executive Officer | 18 Months | 18 Months | 18 Months Base Salary |
Executive Vice President and Sr. Vice President | If < 1 year as an Eligible Employee, 3 Months | 3 Months | 3 Months Base Salary |
If ≥ 1 year as an Eligible Employee, 12 Months | 12 Months | 12 Months Base Salary | |
Vice President | If <1 year as an Eligible Employee, 2 Months | 2 Months | 2 Months Base Salary |
If ≥1 year as an Eligible Employee, 6 Months | 6 Months | 6 Months Base Salary |
Eligible Employee | Severance Period | Restricted Period | Cash Severance Amount |
Chief Executive Officer | 18 Months | 18 Months | 18 Months Annual Compensation Amount |
Executive Vice President and Senior Vice President | 12 Months | 12 Months | 12 Months Annual Compensation Amount |
Vice President | 9 Months | 9 Months | 9 Months Annual Compensation Amount |
(a) | This Plan shall be construed and interpreted so that payments made and benefits provided hereunder are exempt from Code Section 409A (“Section 409A”) insofar as possible. To the extent payments and benefits hereunder are subject to Section 409A, this Plan shall be construed and interpreted to retain compliance with Section 409A. |
(b) | Each payment under the Plan shall be treated as a separate payment of compensation for purposes of applying the exclusion from Section 409A for certain short-term deferral amounts and involuntary separation payments. |
(c) | Any amounts payable solely on account of an involuntary separation from service within the meaning of Section 409A shall be excludible from the requirements of Section 409A, either as involuntary separation pay or as short-term deferral amounts (e.g., amounts payable under the schedule prior to March 15 of the calendar year following the calendar year of involuntary separation) to the maximum possible extent. |
(d) | Any in-kind benefits provided under the Plan shall be provided in accordance with the requirements of Section 409A, including, where applicable, the provision that in-kind benefits provided during a calendar year may not affect the in-kind benefits to be provided in any other calendar year and the provision that the right to in-kind benefits is not subject to liquidation or exchange for another benefit. |
(e) | If payment of any amount of “deferred compensation” (as defined under Section 409A, after giving effect to the exemptions thereunder) (“Deferred Compensation”) is contingent upon the Eligible Employee’s taking any employment related action, including but not limited to, agreeing to execution of a release and waiver of claims, and if the period within which the Eligible Employee must take the employment related action would begin in one calendar year and expire in the following calendar year, then any payments contingent on such employment-related action shall be made in such following calendar year (regardless of the year of execution of such release) if payment in such following calendar year is required in order to avoid taxes, interest and penalties under Section 409A. |
(f) | If an Eligible Employee is a “specified” employee as the date of termination of employment, payment of any amount of Deferred Compensation required to be delayed in compliance with Code Section 409A(a)(2)(B), shall not be made prior to the earlier of the expiration of the 6-month period measured from the Eligible Employee’s separation from service, or the date of the Eligible Employee’s death. Amounts delayed under this provision shall be paid in one lump sum, without interest, within ten days after the date payment becomes due after such delay. |