| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointment of New Chief Operating Officer
ATI Physical Therapy, Inc. (the “Company”) announced the appointment of Scott Gregerson as the Company’s Chief Growth Officer to
be effective as of January 3, 2023 (the “Effective Date”).
Mr. Gregerson has held executive leadership positions at Envison Healthcare, Epic Care, Stanford Healthcare and ValleyCare
Health. In these chief-executive, presidential and vice-presidential roles he developed and led strategic business development and growth, often connecting large-scale provider groups with hospital and health systems. His prior experience also
includes healthcare leadership positions at Fresenius Medical Care (Chicago), Doctors Community Hospital (Lanham, MD) and Sonoma Valley Hospital (Sonoma, Calif). Mr. Gregerson holds a bachelor’s degree from the University of California, Santa
Barbara and a juris doctor degree from Washington and Lee University School of Law.
In connection with his appointment, the Company and Mr. Gregerson have entered into a written employment agreement (the “Employment Agreement”) for an initial term of
three-years that automatically renews for one-year terms thereafter, unless notice of non-renewal is provided 30 days before the end of the term then in effect, and a minimum base salary of $490,000 per year. In addition, the Employment Agreement
provides for an annual target bonus equal to 75 % of his base salary (“Target Bonus”), also be granted long-term incentive equity awards for 2023 pursuant to the Company’s 2021 Equity Incentive Plan, with a grant-date fair market value of
$500,000 in 2023 as determined by the Compensation Committee. Each annual grant is to be comprised of 100% of restricted stock units vesting in three equal annual tranches. Mr. Gregerson is eligible to participate in the Company’s employee
benefit plans as in effect from time to time on the same basis as generally made available to other senior executives of the Company.
In addition, the Employment Agreement also provides for certain payments and benefits in the event of a termination of his
employment under specific circumstances. If, during the term of the Employment Agreement, his employment is terminated by the Company other than for “Discharge For Cause,” death or disability (each as defined in his agreement), he would be entitled
to: (a) upon termination at any time other than during the 18-month period following a Change in Control (as defined in his agreement), (i) an amount equal to 1.25 times the sum of (x) Mr. Gregerson’s base salary and (y) Target Bonus, in
substantially equal installments over 15 months from termination, (ii) an annual bonus for the then-current fiscal year based on actual performance for such year, pro-rated from the first date of such fiscal year through Mr. Gregerson’s last date
of continued active employment, payable at the same time as annual bonuses are paid other senior executives of the Company and (iii) if elected, the employer and employee portion of any COBRA health and welfare premiums for a period equal to twelve
(12) months from the date of termination, or, if earlier, (x) the first date that Mr. Gregerson is no longer eligible for COBRA, or (y) the first date that Mr. Gregerson becomes eligible for health benefits from another employer; or (b) upon
termination during the 18-month period following a Change in Control (i) an amount equal to 1.5 times the sum of (x) Mr. Gregerson’s base salary and (y) Target Bonus, in a lump sum on the first payroll date, (ii) an annual bonus for the
then-current fiscal year based on actual performance for such year, pro-rated from the first date of such fiscal year through Mr. Gregerson’s last date of continued active employment, payable at the same time as annual bonuses are paid other senior
executives of the Company, (iii) if elected, the employer and employee portion of any COBRA health and welfare premiums for a period equal to twelve (12) months from the date of such termination, or, if earlier, (x) the first date that Mr.
Gregerson is no longer eligible for COBRA or (y) the first date that Mr. Gregerson becomes eligible for health benefits from another employer.
Mr. Gregerson’s receipt of the termination payments and benefits is contingent upon execution of a general release of any and
all claims arising out of or related to his employment with the Company and the termination of his employment, and compliance with the restrictive covenants described in the following paragraph.
Pursuant to his Employment Agreement, Mr. Gregerson has also agreed to customary restrictions with respect to the disclosure
and use of the Company’s confidential information and has agreed that work product or inventions developed or conceived by his while employed with the Company relating to its business is the Company’s property. In addition, during the term of his
employment and for the 15-month period following his termination of employment if Mr. Gregerson is eligible to receive severance benefits and an 12-month period following his termination in any other circumstance, Mr. Gregerson has agreed not to
(1) perform services on behalf of a competing business which was the same or similar to the types services he was authorized, conducted, offered or provided to the Company, (2) solicit or induce any of the Company’s employees or independent
contractors to terminate their employment with the Company or (3) solicit any actual or prospective customers with whom he had contact on behalf of a competing business. In addition, his Employment Agreement mandates that his confidentiality
obligations continue after the termination of employment.
Mr. Gregerson has no family relationship with any of the executive officers or directors of the Company. There are no
arrangements or understandings between Mr. Gregerson and any other person pursuant to which he was appointed as an officer of the Company.
The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference
to the complete text of the Employment Agreement, a copy of which is attached as Exhibit 10.1.