| Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(c) On May 23, 2023, BurgerFi International Inc. (the “Company”) entered into an employment agreement (the “Agreement”) with Carl Bachmann, age 55, to serve as Chief Executive Officer of the Company, effective July 10, 2023 (the “Commencement Date”), to fill the vacancy created by the previously disclosed retirement of Ian Baines. Mr. Bachmann has served as the President and Chief Executive Officer of Smashburger, an American fast-casual burger restaurant chain since January 2019 and served as the Chief Operating Officer of Smashburger from January 2017 until January 2019.
There are no arrangements or understandings between Mr. Bachmann and any other person pursuant to which the Company agreed to hire Mr. Bachmann as the Chief Executive Officer of the Company, there are no family relationships between Mr. Bachmann and any director or executive officer of the Company and Mr. Bachmann does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Under the terms of the Agreement, Mr. Bachmann will earn a base salary of $525,000 (subject to annual review) and will be entitled to receive an annual performance bonus of up to fifty percent (50%) of his base salary based upon the achievement of performance objectives determined by the Compensation Committee of the Board of Directors (the “Board”) of the Company and the Board, which shall initially be determined based on the achievement of the key performance indicators as set forth in the Agreement. In addition, Mr. Bachmann is entitled to up to six months’ (or twelve months’ in the event of a change of control as defined in the Company’s 2020 Omnibus Equity Incentive Plan (the “Plan”)) severance and reimbursement of COBRA expenses in the event of termination of the Agreement by the Company without Cause (as defined in the Agreement) or by Mr. Bachmann for Good Reason (as defined in the Agreement) at any time following the Commencement Date.
Mr. Bachmann also has the ability to earn up to 500,000 shares of Company common stock through a restricted stock unit grant (“Restricted Stock Unit Grant”), subject to Mr. Bachmann’s achievement of certain key performance criteria as set forth in the Agreement, and an additional 500,000 shares of Company common stock through a time-based restricted stock unit grant (“Time-Based Restricted Stock Unit Grant”). Each of these grants would vest in five equal installments beginning on March 29 following the date of grant with an additional twenty percent (20%) vesting on each anniversary thereof for the following four years, subject to earlier vesting due to a change of control or certain termination events described below. Determinations regarding such grants have not yet been made.
Further, the Company agreed to, subject to Mr. Bachmann’s obligation to, on or before the Commencement Date, purchase shares of Company common stock in an open-market transaction in an amount equal to a minimum of $50,000 and a maximum of $100,000 (such final purchased amount, the “Open Market Purchase”), (i) as soon as practicable following the Commencement Date, grant to Mr. Bachmann the number of unrestricted shares of Company common stock equal to the Open Market Purchase and (ii) on the Company’s next regular payroll date following the Commencement Date, pay Mr. Bachmann a signing bonus (the “Signing Bonus”) in the amount of $100,000; provided, however, that Mr. Bachmann shall repay the gross amount of the Signing Bonus if, prior to the date that is six (6) months after the Commencement Date, Mr. Bachmann terminates his employment without Good Reason or the Company terminates Mr. Bachmann’s employment for Cause. Mr. Bachmann is also entitled to travel and housing expenses in the amount of up to $50,000 in the first twelve (12) months following the Commencement Date, subject to reduction thereafter to up to $25,000 per year if Mr. Bachmann establishes a residence near the Company’s headquarters.
During the term of Mr. Bachmann’s Agreement, Mr. Bachmann will be bound by confidentiality, non-competition and non-solicitation obligations. If (a) there is a Change of Control (as defined in the Plan) during the term of employment or (b) at any time on or before the one-year anniversary of the Commencement Date, the Agreement is terminated by the Company without Cause or by Mr. Bachmann for Good Reason, all unearned restricted stock units awarded under the Restricted Stock Unit Grant and Time-Based Restricted Stock Unit Grant that could vest during the calendar year in which the Change of Control or termination occurs shall be deemed to have been earned and vested immediately prior to the Change of Control or termination.
The foregoing description of the Agreement is only a summary and is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated into this Item 5.02 by reference.