ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) Files An 8-K Entry into a Material Definitive AgreementItem 9.01 Entry into a Material Definitive Agreement
Entry into Employment Agreement with Marc Reisch
On March 12, 2018, the Company’s wholly owned subsidiary, Phoenix Color Corp. (“Phoenix”) entered into an Employment Agreement (the “New Agreement”) with Marc Reisch, Chairman of Phoenix. In connection with the entry into the New Agreement, the previous employment agreement, dated August 14, 2015 (the “Old Agreement”), was superseded and terminated. to the New Agreement, Mr. Reisch’s term was extended from December 31, 2018 to December 31, 2021. Additional material terms changed by the New Agreement as compared to the Old Agreement include: (i) Mr. Reisch’s incentive bonus structure, which was increased to 10% of pre-bonus EBITDA of Phoenix in excess of $20,000,000, with a step down to 5% of pre-bonus EBITDA of Phoenix in excess of $27,000,000; (ii) Mr. Reisch’s severance payments in the event of termination without cause, by Mr. Reisch for good reason, or in connection with a change in control of Phoenix; and (iii) the introduction of a clawback provision in the event of a material restatement, revision or change to Phoenix’s financial statements requiring a recalculation of EBITDA for any particular fiscal year of the Company.
The foregoing description of the New Agreement is qualified in its entirety by the text of the New Agreement, a copy of which is attached as Exhibit 10.1 hereto.
Item 9.01 Termination of a Material Definitive Agreement
As described in Item 9.01 of this Current Report, the Company’s wholly owned subsidiary Phoenix and Mr. Reisch have entered into the New Agreement that supersedes the Old Agreement between them. To the extent required by Item 9.01 of Form 8-K, the information contained or incorporated by reference in Item 9.01 of this Current Report regarding the New Agreement is incorporated by reference in this Item 9.01. Additionally, to the extent required by Item 9.01 of Form 8-K, the following are incorporated by reference in this Item 9.01 to General Instruction B.3 of Form 8-K:
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the Old Agreement, a copy of which was filed as Exhibit 10.4 to our Registration Statement on Form 10-12B/A with the Securities and Exchange Commission (the “SEC”) on March 28, 2016; and |
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the description of the prior employment agreement under the heading “Executive Compensation – Employment Arrangements with Named Executive Officers and Other Key Employees – Named Executive Officers – Marc Reisch” in the Company’s Annual Report on Form 10-K, filed with the SEC on December 19, 2017. |
Item 9.01. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
To the extent required by Item 9.01 of Form 8-K, the information contained or incorporated by reference in Item 9.01 of this Current Report regarding the New Agreement is incorporated by reference in this Item 9.01.
Item 9.01 Other Events
On December 29, 2017, the Company’s wholly owned subsidiary, Floors-N-More, LLC, d/b/a Carpets N’ More (“Carpets”), entered into the First Amendment to Employment Agreement (the “Chesin Amendment”) with Steve Chesin, Chief Executive Officer of Carpets, which amended certain provisions of the Employment Agreement dated April 14, 2014 between Carpets and Mr. Chesin (the “Original Chesin Agreement”). Among other changes, the Chesin Amendment amended the Original Chesin Agreement as follows:
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(i) |
Mr. Chesin’s term was extended to continue until January 1, 2019; |
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(ii) |
Mr. Chesin is eligible to receive incentive compensation in the amount of the sum of (A) 5% of pre-bonus EBITDA of Carpets in excess of $1,500,000 and less than $5,000,000 and (B) 2.5% of pre-bonus EBITDA of Carpets in excess of $5,000,000; and |
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(iii) |
In the event of termination by Carpets without cause or by Mr. Chesin for good reason, Mr. Chesin will receive (i) any base salary earned but not paid and (ii) severance payments in the amount of (a) one times base salary, to be paid in substantially equal monthly installments for the |
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12 month period following Mr. Chesin’s termination of employment, (b) continuation of COBRA benefits, (c) an annual bonus for the year of termination, to be paid at the time and in the manner such annual bonus would have been paid had termination not occurred and (d) any annual bonus for previous years earned but not paid. |
The foregoing description is qualified in its entirety by the text of both the Original Chesin Agreement and the Chesin Amendment, copies of which are attached as Exhibits 10.2 and 10.3, respectively, hereto.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
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EXHIBITNO. |
DESCRIPTION |
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10.1 |
Employment Agreement, dated March 12, 2018, by and between Phoenix Color Corp. and Marc Reisch |
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10.2 |
Employment Agreement, dated April 14, 2014, by and between Floors-N-More, LLC and Steven Chesin |
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10.3 |
First Amendment to Employment Agreement, dated December 29, 2017, by and between Floors-N-More, LLC and Steven Chesin |
ALJ REGIONAL HOLDINGS INC ExhibitEX-10.1 2 aljj-ex101_8.htm EX-10.1(REISCH EMPLOYMENT AGREEMENT) aljj-ex101_8.htm Exhibit 10.1 EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this “Agreement”),…To view the full exhibit click here
About ALJ Regional Holdings, Inc. (NASDAQ:ALJJ)
ALJ Regional Holdings, Inc. is a holding company. The Company’s segments include Faneuil, Carpets and Phoenix. The Faneuil segment offers clients customer relationship management; billing, payment and claims processing; data entry; document management; workforce and support analytics; quality assurance; system support and maintenance, and staffing services. The Carpets segment is a provider of multiple products for the commercial, retail and home builder markets, including all types of flooring, countertops, cabinets, window coverings and garage/closet organizers. The Carpets segment provides various floor coverings to commercial and retail customers, including carpet, ceramic, porcelain, natural stone, vinyl plank, vinyl tile, area rugs and specialty flooring, including bamboo, leather, cork and large format tile. The Phoenix segment is engaged in offering digital pre-press capabilities and its ultraviolet (UV) printing platform supports a range of printing and finishing options.
