Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Adam Price
On December 27, 2019, Adam Price ("Mr. Price") resigned his position as Chief
Executive Officer and as a Class II member of the Board of Directors (the
"Board") of Waitr Holdings Inc. (the "Company").
Carl A. Grimstad
On January 2, 2020, the Board appointed Carl A. Grimstad ("Mr. Grimstad") to the
position of Chief Executive Officer and as a Class II member of the Board,
filling the Board seat vacated by Mr. Price.
Mr. Grimstad, age 51, is currently the chief manager of C. Grimstad Associates,
LLC, a family private investment entity formed in 2006, and the managing partner
of GS Capital, LLC, a family private investment company formed in 1995. In 1999,
Mr. Grimstad co-founded iPayment Inc. ("iPayment") and acted as the President of
iPayment until 2011, when he became the Chairman and Chief Executive Officer of
the company until 2016. Under the leadership of Mr. Grimstad, iPayment closed an
initial public offering in 2003 and then went private in 2006. Mr. Grimstad
serves on the board of directors of Beauty Tap Inc. and Kard Financial Inc.
Mr. Grimstad graduated with a B.A. in Economics from Boston University in 1989.
There is no arrangement or understanding between Mr. Grimstad and any other
person pursuant to which he was appointed as Chief Executive Officer or a
director of the Company, and there are no related party transactions in which
Mr. Grimstad has an interest requiring disclosure pursuant to Item 404(a) of
Regulation S-K promulgated under the Exchange Act of 1934, as amended (the
"Exchange Act"). In addition, there is no family relationship between
Mr. Grimstad and any of the Company's directors or other executive officers.
Employment Agreement
The Company entered into an employment agreement, dated as of January 3, 2020
(the "Employment Agreement"), with Mr. Grimstad pursuant to which Mr. Grimstad
will serve as the Chief Executive Officer of the Company. In such position,
Mr. Grimstad will have such duties, authority and responsibilities as shall be
determined from time to time by the Board (the "Services"). The term of the
Employment Agreement expires on January 3, 2022 (the "Term"), unless earlier
terminated by either party. The Employment Agreement includes customary
obligations related to confidentiality, non-competition and intellectual
property right protection and provides Mr. Grimstad indemnification rights
concerning his service as the Chief Executive Officer of the Company.
For providing the Services, the Company will provide the following compensation
to Mr. Grimstad:
• a base salary of $83,333 per month (pro-rated during the first and last
pay period) (the "Monthly Compensation");
• a bonus of $3,000,000 (the "Bonus") if (i) Mr. Grimstad serves through
the Term, (ii) a Corporate Change (as defined in the Employment
Agreement) occurs, (iii) the Employment Agreement is terminated by
Mr. Grimstad for Good Reason (as defined in the Employment Agreement) or
(iv) the Company terminates the Employment Agreement other than for
Misconduct (as defined in the Employment Agreement); and
• an option (the "Option"), issued under the Waitr Holdings Inc. 2018
Omnibus Incentive Plan (the "Plan"), pursuant to an option agreement
between the Company and Mr. Grimstad dated January 3, 2020 (the "Option
Agreement"), exercisable for a number of shares of the common stock, par
value $0.0001 per share, of the Company (the "Common Stock") equal to
12.5% of the issued and outstanding Common Stock on January 3, 2020.
The exercise price of the Option is $0.37, and the Option is exercisable, at
Mr. Grimstad's option, on a "net exercise" basis. The Option shall vest (any
date on which the Option vests, in whole or in part, a "Vesting Date") 50% on
January 3, 2021 and 50% on January 3, 2022 (in each case, subject to the
Employment Agreement not having been previously terminated), and shall fully
vest upon (i) the consummation of a Corporate Change which occurs during the
Term or (ii) the date the Employment Agreement is terminated by Mr. Grimstad for
Good Reason or by the Company for other than Misconduct, and shall expire on
January 3, 2025; provided, however, that the Option shall not be exercisable
upon its vesting unless the stockholders of the Company shall have approved an
amendment to the Plan to increase the number of shares of Common Stock available
for awards under the Plan by an amount equal to at least the number of shares of
Common Stock underlying the Option (the "Increase"); and provided, further, that
if, on any date when Mr. Grimstad wishes to exercise a portion of the Option
that has vested (an "Exercise Date"), the stockholders of the Company shall not
have approved the Increase, the Company shall pay to Mr. Grimstad an amount in
cash equal to (A) the number of shares for which the option has vested and for
which Mr. Grimstad wishes to exercise the Option (the "Exercised Shares")
multiplied by (B) the excess, if any, of (1) the volume weighted average
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price of the Common Stock as reported by the primary stock exchange or market
where the Common Stock is listed or quoted during the ten (10) trading day
period ending on the trading day prior to such Exercise Date (or if not so
listed or quoted, the fair market value of the Common Stock as determined in
good faith by the Board) over (2) the exercise price of the Option, which amount
shall be paid to Mr. Grimstad no later than fifteen (15) days following the
applicable Exercise Date, and upon any such payment, the number of shares of
Common Stock underlying the Option shall be reduced by the number of Exercised
Shares.
The exercise price and the number of shares of Common Stock issuable upon
exercise of the Option are subject to certain adjustments as provided for in the
Plan.
In addition to the vesting in full of the Option, upon the closing of a
Corporate Change, Mr. Grimstad will receive (i) the lesser of (A) the balance of
the Monthly Compensation through the Term and (B) eighteen (18) months of
Monthly Compensation, plus (ii) the Bonus and (iii) Accrued Amounts (as defined
below), if any, and the Company may terminate the Employment Agreement.
If the Employment Agreement is terminated by Mr. Grimstad other than for Good
Reason or by the Company in the event of Mr. Grimstad's Misconduct, Mr. Grimstad
shall not be entitled to further compensation other than payment for (i) any
unpaid Monthly Compensation through the date of termination, (ii) any unpaid
expenses incurred prior to the date of termination, subject to the Company's
expense reimbursement rules and policies as in effect from time to time, and
(iii) any vested portion of the Option through the date of termination (the
"Accrued Amounts").
If the Employment Agreement is terminated by the Company other than for
Misconduct or by Mr. Grimstad for Good Reason, the Company shall pay
Mr. Grimstad (i) the lesser of (A) the balance of the Monthly Compensation
through the Term and (B) eighteen (18) months of Monthly Compensation, (ii) the
Bonus, (iii) the Option shall accelerate and be vested in full, and (iv) Accrued
Amounts, if any.
The foregoing description of the terms of the Employment Agreement is qualified
in its entirety by reference to the full text of the Employment Agreement, which
is attached hereto as Exhibit 10.1.
Option Agreement
The information above regarding the Option and the Option Agreement is
incorporated herein by reference.
The foregoing description of the terms of the Option Agreement is qualified in
its entirety by reference to the full text of the Option Agreement, which is
attached hereto as Exhibit 10.2.
Item 7.01 Regulation FD Disclosure
On January 3, 2020, the Company issued a press release announcing the
appointment of Mr. Grimstad as Chief Executive Officer of the Company and the
resignation of Mr. Price. A copy of the press release is furnished as Exhibit
99.1 and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1 attached hereto, is
intended to be furnished and shall not be deemed "filed" for purposes of
Section 18 of the Exchange Act, or otherwise subject to the liabilities of that
section, nor shall it be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as expressly set
forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Employment Agreement, dated January 3, 2020, by and between Waitr
Holdings Inc. and Carl A. Grimstad
10.2 Option Agreement, dated January 3, 2020, by and between Waitr
Holdings Inc. and Carl A. Grimstad
99.1 Press Release issued on January 3, 2020
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