Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Tony Strange Resignation and Jeff Shaner’s Appointment as Chief Executive Officer and Director
On December 13, 2022, Aveanna Healthcare Holdings Inc. (the “Company”) announced that its Chief Executive Officer (“CEO”) and Director, Anthony H. Strange, is separating from employment with the Company, effective December 31, 2022. Mr. Strange has served as a member of each of the Nominating and Corporate Governance Committee and the Clinical Quality and Compliance Committee of the Board of Directors of the Company (the “Board”). Mr. Strange will continue to receive the same compensation and benefits as currently in effect and remain eligible to vest in his incentive equity awards until the effective date of his separation from employment. In connection with his separation from employment, Mr. Strange will receive, in addition to any accrued benefits, the severance benefits due upon a separation from employment triggered by the Company without “cause” (as defined in, and as provided under the terms of, his Employment Agreement, dated March 15, 2017 and as amended on January 23, 2018), which includes twelve months of continued base salary payments, payment of an amount equal to the annual bonus paid to Mr. Strange in 2021, paid at the same time as annual bonuses are paid to other senior executives of the Company, and up to twenty-four months of continued health and welfare benefits. Additionally, Mr. Strange will remain eligible to vest in his performance-based stock options following his separation from employment, and he will remain eligible to exercise all of his vested stock options (including any performance-based stock options that vest following his employment separation date) until their applicable expiration date. Mr. Strange will vest in fifty percent of his restricted stock units upon his separation from employment and remain eligible to vest, following his separation from employment, in his performance stock units, based on actual performance through the entire applicable performance period, and, if earned, such performance stock units will be settled in accordance with their terms. Mr. Strange’s entitlement to the foregoing severance and incentive equity treatment is conditioned on his execution and non-revocation of a separation and release agreement and his continued compliance with his restrictive covenant and other specified obligations, which include non-competition, non-solicitation, confidentiality and non-disparagement covenants. In consideration of the Company’s treatment of his equity awards described herein, Mr. Strange agreed to extend the duration of his non-competition, non-solicitation and cooperation covenants until twenty-four months following his separation from employment. Following the CEO Transition Period, Mr. Strange will provide non-employee consulting services for a period of up to six months following his employment separation date, with the consideration for such services in the form of a cash fee in the aggregate amount of $200,000 for the entire six-month period (pro-rated for any partial months of service). The Company has agreed to pay directly, or reimburse Mr. Strange for, his reasonable attorneys’ fees incurred in connection with the negotiation and drafting of his separation arrangements, with such payments and/or reimbursements not to exceed $25,000 in the aggregate.
The Company appointed Jeff Shaner, its current Chief Operations Officer (“COO”), to serve as the Company’s CEO and Director, effective December 31, 2022.
Mr. Shaner has served as COO since he joined the Company in 2017 upon its formation through the merger of Epic Health Services Inc. and Pediatric Services of America, Inc. (“PSA”). Prior to that, Mr. Shaner was chief operating officer of PSA since October 2015. Mr. Shaner began his healthcare business career in 2000, leading the operations at Total Care Inc. Mr. Shaner joined Healthfield following its acquisition of Total Care Inc. and was later appointed to lead its hospice division. Mr. Shaner served as president of operations of Gentiva from August 2010 until February 2015 and as operating partner for Linden Capital/Blue Wolf Capital, a private equity firm, from February 2015 to October 2015. Mr. Shaner received his Bachelor of Arts degree in business finance and economics from the University of Pittsburgh.
Mr. Shaner was appointed to fill the vacancy in the Board following Mr. Strange’s departure. Mr. Shaner will serve as a Class III director, which class will stand for re-election at the 2024 annual meeting of stockholders. Mr. Shaner will serve as a member of each of the Nominating and Corporate Governance Committee and the Clinical Quality and Compliance Committee of the Board. Because of his long tenure as COO, his operational expertise and his role as CEO, the Company believes that Mr. Shaner is well-qualified to serve as a member of the Board.
Mr. Shaner is party to an Employment Agreement, dated as of March 15, 2017 and as amended on January 23, 2018, with the Company. There are otherwise no arrangements or understandings between Mr. Shaner and any other person pursuant to which he was appointed as CEO and Director. Mr. Shaner does not have any family relationships with any director, executive officer or person nominated or chosen by the Company to become a director or executive officer of the Company. There are no other related party transactions between Mr. Shaner and the Company that would require disclosure pursuant to Item 404(a) of Regulation S-K promulgated by the Securities and Exchange Commission.