Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 3, 2019, Leaf Group Ltd. (the “Company”) announced the appointment of Brian Gephart as Chief Accounting Officer of the Company. Effective upon his commencement of employment on June 3, 2019, Mr. Gephart will assume the role of the Company’s principal accounting officer.
Prior to joining the Company and since August 2017, Mr. Gephart, 40, served as Chief Accounting Officer of JH Capital Group, a diversified specialty finance company providing a wide array of solutions for consumers and businesses across a broad range of assets. Prior to joining JH Capital Group, Mr. Gephart was a Director at PricewaterhouseCoopers LLP specializing in Capital Markets & Accounting Advisory Services from 2011 to August 2017, where he advised a variety of private and public companies on capital market transactions, mergers and acquisitions and financial reporting and accounting matters. Mr. Gephart received a bachelor’s degree in Accounting from Hillsdale College, and an M.B.A. from DePaul University. Mr. Gephart is a Certified Public Accountant.
Gephart Employment Agreement
On May 15, 2019, the Company entered into an Employment Agreement with Mr. Gephart (the “Gephart Agreement”). The Gephart Agreement is effective as of June 3, 2019 and expires on June 3, 2022, unless earlier terminated.
The Gephart Agreement provides for an annual base salary of $265,000, subject to increase at the discretion of the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”). The Gephart Agreement also provides an opportunity for Mr. Gephart to earn an annual discretionary cash performance bonus that is targeted at 30% of his base salary in effect for any calendar year based on the achievement of Company performance metrics and/or individual performance objectives, in each case, as established and approved by the Board or Compensation Committee. Mr. Gephart is also entitled to participate in customary health, welfare and fringe benefit plans.
In connection with the commencement of his employment, Mr. Gephart will be granted 30,000 restricted stock units (“RSUs”), which will vest over three years with one-third of the RSUs vesting on the first anniversary of the date on which such RSUs are granted and the remaining two-thirds vesting in 24 substantially equal monthly installments commencing on each monthly anniversary thereafter, subject to Mr. Gephart’s continued employment through the applicable vesting date. In addition, during the employment period set forth in the Gephart Agreement and at the Company’s discretion, Mr. Gephart will be eligible to receive periodic equity incentive awards from the Company.
If Mr. Gephart’s employment is terminated by the Company without “cause,” or by Mr. Gephart for “good reason” in connection with a “change in control,” or as a result of Mr. Gephart’s death or “disability” (each, as defined in the Gephart Agreement), then, in addition to accrued amounts, Mr. Gephart will be entitled to receive the following benefits:
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a lump-sum payment in an amount equal to six months of Mr. Gephart’s annual base salary then in effect, payable on the 60th day following the date of termination;
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a lump-sum payment in an amount equal to any earned but unpaid prior-year bonus, payable on the date on which annual bonuses are paid to the Company’s senior executives generally for such calendar year, but in no event later than March 15th of the calendar year immediately following the calendar year in which the date of termination occurs;
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Company-paid healthcare continuation coverage for Mr. Gephart and his dependents for up to six months after the date of termination; and
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upon a qualifying termination in connection with a change in control, accelerated vesting of all outstanding equity awards held by Mr. Gephart on the later of the date of termination and the date of the such change of control.
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