GMS INC. (NYSE:GMS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March29, 2019, G. Michael Callahan,Jr., the President and Chief Executive Officer of GMS Inc. (the “Company”) informed the Board of Directors of the Company (the “Board”) that he will retire as President and Chief Executive Officer of the Company. Also on March29, 2019, the Board approved the appointment of John C. Turner,Jr. as the Company’s new President, effective May1, 2019.Mr.Callahan’s retirement as President of the Company will also be effective May 1, 2019. Mr.Callahan will continue in his current position as Chief Executive Officer until August2, 2019, or such earlier date as the Board determines (the “Transition Date”). On the Transition Date, Mr.Turner will assume the title of Chief Executive Officer and Mr.Callahan will retire as Chief Executive Officer.

No family relationships exist between Mr.Turner and any of the Company’s directors or executive officers. There are no arrangements between Mr.Turner and any other person to which Mr.Turner was selected as an officer, nor are there any transactions to which the Company is or was a participant and in which Mr.Turner has a material interest subject to disclosures under Item 404(a)of Regulation S-K.

Mr.Turner, age 50, is currently President ofDal-Tile, a division of Mohawk Industries,Inc.He has served as President since January2012. Mr.Turner began his career withDal-Tilein 1990, progressing through a series of sales, operations and management roles. In 2005, Mr.Turner was promoted to Senior Vice President of Sales. From 2008 to 2011, he served as Senior Vice President of Operations —Dal-Tile,and from 2011 until his 2012 promotion, he served as Chief Operating Officer —Dal-Tile.

In connection with Mr.Turner’s commencement of employment with the Company, the Board and the Compensation Committee approved the Company entering in an employment agreement with Mr.Turner. The employment agreement provides for an initial one-year term commencing on May1, 2019, with automatic one-year renewals unless and until either the Company or Mr.Turner provides at least 90days’ written notice to the other of intent not to renew the term. The employment agreement provides for (i)an annual base salary of $750,000; (ii)eligibility for participation in all benefit programs for which other senior executives of the Company are generally eligible and, for the first three months of employment, an additional $1,500 payment per month to assist with COBRA expense prior to his eligibility for participation in the Company’s benefit plans; (iii)a target annual bonus equal to 50% of his base salary, subject to satisfaction of performance goals and bonus criteria as determined by the Compensation Committee; provided, however, that for fiscal year 2020, his annual bonus will be guaranteed at the greater of target or actual performance; (iv)a monthly car allowance of $800; and (v)reimbursement of relocation expenses, subject to the terms and conditions of the Company’s relocation policy.

to the employment agreement, if Mr.Turner’s employment is terminated by the Company other than for cause, death or disability (each as defined in the employment agreement) or by Mr.Turner for good reason (as defined in the employment agreement) or by Mr.Turner following the Company’s notice of non-renewal of the employment agreement, then he will be entitled to (i)base salary continuation for eighteen (18) months; (ii)an amount equal to his target bonus opportunity for the year in which termination occurs; (iii)a pro-rata annual bonus for the year in which termination occurs; and (iv)payment of the Company-paid portion of group health benefits for eighteen (18) months and, to the extent the medical benefits continuation is taxable Mr.Turner, a tax gross-up payment for such benefit. Mr.Turner’s employment agreement contains certain employee non-solicitation, customer non-solicitation and non-competitive covenants that will apply for eighteen (18) months following his termination of employment with the Company, as well as a confidentiality covenant.

Mr.Turner also will receive a sign-on equity grant having an aggregate grant date value of $1,500,000 and comprised of restricted stock units (50%) and stock options (50%), which awards will vest in three approximately equal installments on each of the first three annual anniversaries of the date of grant, subject to his continued employment with the Company on each vesting date.

The foregoing summary of Mr.Turner’s employment agreement is qualified in its entirety by reference to the employment agreement which is filed herewith as Exhibit10.1 and incorporated herein by reference.

In connection with Mr.Callahan’s retirement, the Company and Mr.Callahan entered into a separation, transition and release agreement. As described above, Mr.Callahan will serve as Chief Executive Officer until the Transition Date. During the transition