ScanSource, Inc (NASDAQ:SCSC) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e)
On June15, 2017, following approval by the Board of Directors
(the Board) of ScanSource, Inc. (the Company) and the
Compensation Committee of the Board (the Committee), the Company
(i)entered into a new employment agreement (the Employment
Agreement) with Michael L. Baur, the Companys Chief Executive
Officer, (ii)entered into a first amendment (the Amendment) to
that certain amended and restated employment agreement, effective
July1, 2014, between the Company and Gerald Lyons, the Companys
Acting Chief Financial Officer, Senior Vice President and
Corporate Controller (the Lyons Employment Agreement), and
(iii)approved the ScanSource, Inc. Executive Severance Plan (the
Severance Plan). The Employment Agreement replaces Mr.Baurs
current amended and restated employment agreement, which expires
June30, 2017. The Amendment extends the term of the Lyons
Employment Agreement, which was set to expire on June30, 2017, to
June30, 2018, among other changes as discussed below. The
effective date of the Amendment is June15, 2017. The Employment
Agreement and the Severance Plan become effective July1, 2017.
The Employment Agreement has a term of three years, and provides
for automatic one-year renewals unless 180 days prior notice of
non-renewal is given to the other party following the initial
term. The Severance Plan was established to provide severance and
other benefits to certain executives selected by the Committee to
participate in the Severance Plan. The following summary of the
Employment Agreement, the Amendment and the Severance Plan is not
complete and is qualified in its entirety by reference to the
full text of such agreement, amendment and plan, copies of which
are attached as Exhibit 10.1 through 10.3 to this Current Report
on Form 8-K and incorporated herein by reference.
Mr.Baurs Employment Agreement provides for, among other things,
(i)a base salary of $875,000 per year; (ii)an annual target
variable compensation opportunity of 150% of his base salary
(with a maximum opportunity of 200% of target) based upon
performance and the attainment of performance goals set by the
Committee; (iii)consideration for inclusion in the Companys
annual equity grant program at a grant level opportunity of
$2,250,000; and (iv)the opportunity to participate in the
Companys Nonqualified Deferred Compensation Plan by deferring up
to 50% of base salary and/or up to 50% of annual variable
compensation, with a match of 50% of deferred amounts to be made
by the Company, up to a maximum of $200,000 per year. In
addition, the Company will make additional payments to Mr.Baurs
deferred compensation account to cover the cost of future
premiums for access only continuation coverage under the Companys
medical and dental plan following termination of employment until
Mr.Baur attains age 65, and to cover the cost of coverage for
years after age 65 assuming Mr.Baur is enrolled in Medicare Parts
A, B and D, obtains a Medicare supplemental policy until age 80
and pays the full cost for such coverage.
Mr.Baur is also afforded other benefits in connection with his
employment with the Company and to the Employment Agreement,
including but not limited to life insurance, long-term disability
and short-term disability.
Mr.Baurs variable compensation opportunity is based upon the
performance and attainment of performance goals to be established
annually by the Committee. Mr.Baurs annual equity award
opportunity is subject to the Committees discretion and the terms
of the Companys 2013 Long-Term Incentive Plan (the 2013 Plan), or
any successor plan, and related equity award agreements,
including but not limited to Committee discretion regarding the
type(s) of such awards and the performance and/or service
conditions applicable to such awards.
The Amendment extends the term of the Lyons Employment Agreement
to June30, 2018, and modifies the Lyons Employment Agreements
restrictive covenant provisions to clarify that certain rights of
Mr.Lyons regarding disclosure of confidential information and/or
trade secrets are protected under certain circumstances.
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The Employment Agreement and the Severance Plan also provide that
if the employment of Mr.Baur or any executive selected by the
Committee to participate in the Severance Plan (each, an
Executive and together, the Executives), respectively, is
terminated by the Company without cause, or if the Executive
resigns for good reason, the Company will be required to pay or
provide the Executives base salary earned through the date of
termination. In addition, the Company will also be required to
pay to the Executive in such instances any other amounts or
benefits the Executive is eligible to receive under any plan,
program, policy, practice, contract or agreement of the Company
in accordance with their terms. In such instances, the Company
will also be required to provide severance benefits (Severance
Benefits) to the Executive, subject to the Executives execution
of a Release in a form provided in the Employment Agreement or
the Severance Plan, as applicable, consisting of compensation
equal to the average annual base salary and variable compensation
earned by the Executive, including any amounts earned but
deferred, in the last three fiscal years prior to the termination
(the Average Compensation Amount), multiplied by a severance
multiple, less withholdings. In the case of Mr.Baur, the
severance multiple is equal to 2.5, and in the case of an
Executive participating in the Severance Plan, the severance
multiple will be set forth in a participation agreement between
the Company and such Executive (a Participation Agreement), but
such multiple may not exceed 2.5. In the event the termination
occurs within 12 months after or prior to and in contemplation of
certain change in control events, Mr.Baur will receive three
times his Average Compensation Amount and, in the case of an
Executive participating in the Severance Plan, such Executive
will receive his Average Compensation Amount multiplied by his
change in control multiple, as set forth in a Participation
Agreement, but such multiple may not exceed 2.5. In addition, in
the event that the Executives employment is terminated by the
Company without cause, or if the Executive resigns for good
reason, the Executive will be entitled to receive a bonus equal
to the pro-rata portion of the then current fiscal year annual
variable compensation that would otherwise be payable to the
Executive based on actual performance. For a period of up to
twenty-four months following the date of such a termination (or
in the case of Mr.Baur, until he attains 65 years of age), the
Executives shall be entitled to participate in the Companys
medical and dental plans, with the Executive paying the full
premium charged for such coverage subject to the terms of the
Employment Agreement or the Severance Plan, as applicable. Upon
the attainment of age 65, until age 80, the Company will provide
funding to Mr.Baur for the cost of coverage assuming Mr.Baur is
enrolled in Medicare Parts A, B and D, obtains a Medicare
supplemental policy and pays the full cost for such coverage.
If the Executives employment is terminated for cause or if the
Executive voluntarily terminates his employment during the term
of the agreement, other than for good reason, the Company will
only be obligated to provide any accrued amounts payable on the
Executives annual base salary or any other amounts not previously
paid, but earned, by the Executive as of the date of termination,
and benefits under other plans in accordance with their terms. If
the Executive dies, becomes disabled, or retires during the term
of the Employment Agreement or the Severance Plan, as applicable,
the Company will only be obligated to provide any accrued amounts
payable on the Executives annual base salary or any other amounts
not previously paid, but earned, by the Executive as of the date
of termination, a bonus equal to the pro-rata portion of the then
current fiscal year annual variable compensation that would
otherwise be payable to the Executive based on actual
performance, and benefits under other plans in accordance with
their terms.
If the Company does not renew the Employment Agreement, or enter
into a new employment agreement with the same or similar terms
after the end of the Employment Period, and Mr.Baur remains an
employee of the Company in any capacity, Mr.Baurs employment will
be on an at-will basis, and Mr.Baur generally will be eligible to
receive the same severance benefits set forth in the Employment
Agreement.
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In addition, each of the Employment Agreement and the Severance
Plan, as applicable, requires the Executive not to, during the
term of his employment and for a period of two years following
the termination of such Executives employment: (a)compete with
the Company; (b)solicit certain customers or suppliers and
certain prospective customers or suppliers of the Company; or
(c)solicit employees to leave the Company. Each of the Employment
Agreement and the Severance Plan, as applicable, also requires
the Executive not to use or disclose the Companys confidential
information or trade secrets during the term of his employment
and for a period of five years thereafter or for so long as the
trade secrets remain protected. In addition, the Company and each
Executive agree not to disparage each other during the term of
employment or for a period of five years thereafter. If an
Executive breaches or threatens to breach such restrictions on
conduct, the Company may immediately cease any severance benefits
or refuse such payment and shall be entitled to recover from any
such Executive any amounts previously paid as a severance
benefit.
The Executives receipt of severance benefits will be subject to
the Executives execution of a release of claims in a form
customarily used by the Company upon a senior executive officers
termination of employment.
The Employment Agreement and the Severance Plan provide that the
Executive shall be subject to the Companys Compensation Recovery
Policy (clawback policy) and Stock Ownership and Retention
Policy.
Item9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
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| Exhibit10.1 |
Employment Agreement, effective July1, 2017, between Michael L. Baur and ScanSource, Inc. |
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| Exhibit10.2 |
First Amendment to Amended and Restated Employment Agreement, effective June15, 2017, between Gerald Lyons and ScanSource, Inc. |
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| Exhibit10.3 |
ScanSource, Inc. Executive Severance Plan (including form of Participation Agreement) |
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SCANSOURCE, INC. ExhibitEX-10.1 2 d410974dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO S.C. CODE ANN. § 15-48-10,…To view the full exhibit click here About ScanSource, Inc (NASDAQ:SCSC)
ScanSource, Inc. is a provider of technology products and solutions. The Company and its subsidiaries provide solutions for technology manufacturers and sell to resellers in technology markets, such as point-of-sale (POS) and Barcode, Networking and Security, Communications and Emerging Technologies. It operates through two segments: Worldwide Barcode & Security and Worldwide Communications & Services. The Barcode & Security distribution segment focuses on automatic identification and data capture (AIDC), POS, electronic physical security and three dimensional (3D) printing technologies. The Communications & Services distribution segment focuses on communications technologies and services. As of June 30, 2016, the Company marketed over 100,000 products from approximately 400 hardware and software vendors to approximately 35,000 reseller customers from distribution centers in Mississippi, Virginia, Florida, Mexico, Colombia, Brazil, Belgium, France, Germany and the United Kingdom.