Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Employment Agreement with Chief Executive Officer
On January 21, 2022, Sportsman's Warehouse Holdings, Inc. (the "Company")
entered into a new employment agreement with Jon Barker, the Company's Chief
Executive Officer (the "Employment Agreement"), which amends and restates in its
entirety the previous employment agreement between the Company and Mr. Barker
dated May 11, 2018.
The Employment Agreement provides for an indefinite term subject to termination
by either party. The Employment Agreement provides for an annual base salary of
$975,000 for Mr. Barker (effective as of January 1, 2022), which may be
increased but not decreased in the sole discretion of the Company's Board of
Directors (the "Board") (or a committee thereof). The Employment Agreement also
provides for (i) a target annual bonus opportunity of 150% of Mr. Barker's base
salary beginning with the Company's fiscal year 2022, with the actual amount of
Mr. Barker's annual bonus to be determined by the Board (or a committee thereof)
each year, and (ii) a one-time special bonus of $500,000 to be paid within 30
days of the execution of the Employment Agreement, subject to repayment if
within 12 months of the date of the Employment Agreement the Company terminates
his employment for "Gross Misconduct" or Mr. Barker voluntarily resigns for
other than "Good Reason" (as such terms are defined in the Employment
Agreement). Mr. Barker will also be eligible to receive an equity award having a
grant date fair market value of $2.25 million split equally between restricted
stock units and performance stock units. The vesting terms and conditions of the
foregoing equity award will be determined by the Board (or a committee thereof)
in its sole and absolute discretion and such award will be granted in accordance
with the Company's standard equity grant schedule for fiscal year 2022.
Mr. Barker will be eligible to receive subsequent annual equity awards from the
Company in the Board's discretion, to receive reimbursement for the cost of an
annual physical exam, and to participate in the employee benefit plans available
to other executives of the Company.
In the event Mr. Barker's employment is terminated by Company other than because
of Mr. Barker's "Gross Misconduct" or by Mr. Barker for "Good Reason" (as such
terms are defined in the Employment Agreement), Mr. Barker will be entitled to
receive, subject to him providing a general release of claims in favor of the
Company, (i) continued payment of his base salary for 15 months (or 18 months if
such termination occurs on or following a "Change in Control" of the Company, as
such term is defined in the Employment Agreement), (ii) payment of pro-rated
target annual bonus for the fiscal year of termination, (iii) reimbursement of
COBRA premiums for up to 15 months (or 18 months if such termination occurs on
or following a Change in Control of the Company), (iv) continued participation
in any merchandise discount program offered to employees for 12 months, and
(v) if such termination occurs on or following a Change in Control of the
Company, full acceleration of any outstanding time-based equity awards granted
by the Company.
The Employment Agreement also contains certain restrictive covenants including
an indefinite confidentiality clause, twelve month post-termination
non-competition clause, twenty-four month post-termination non-solicitation of
employees or independent contractors clause, and non-disparagement clause.
The foregoing description of the Employment Agreement is qualified in its
entirety by reference to the full text of the Employment Agreement, which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Appointment of Chief Financial Officer
As previously disclosed, Jeff White was appointed Vice President of Finance,
Chief Accounting Officer, Interim Chief Financial Officer and Secretary of the
Company, effective September 26, 2021. On January 21, 2022, the Board appointed
Mr. White as Chief Financial Officer of the Company, effective immediately.
Mr. White will continue to serve as the Company's Secretary and as its principal
accounting officer and principal financial officer.
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Mr. White, 36, has served as Secretary since September 2021 and previously
served as Vice President of Finance, Chief Accounting Officer and Interim Chief
Financial Officer of the Company from September 2021 to January 21, 2022. From
August 2016 to September 2021, Mr. White served as the Company's Senior
Director, Finance and Accounting. Prior to his time at the Company, Mr. White
served as Manager at KPMG LLP from August 2011 to August 2016.
In connection with his appointment as Chief Financial Officer and Secretary,
Mr. White will receive an annual base salary of $350,000 (effective as of
January 21, 2022). He will also have a target annual bonus opportunity of 50% of
his base salary beginning with the Company's fiscal year 2022, with the actual
amount of Mr. White's annual bonus to be determined by the Board (or a committee
thereof) each year. Mr. White will also be eligible to receive an equity award
having a grant date fair market value of $450,000 split equally between
restricted stock units and performance stock units. The vesting terms and
conditions of the foregoing equity award will be determined by the Board (or a
committee thereof) in its sole and absolute discretion and such award will be
granted in accordance with the Company's standard equity grant schedule for
fiscal year 2022.
There were no changes to the severance agreement, dated September 26, 2021,
entered into between the Company and Mr. White (the "Severance Agreement") as
disclosed in the Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission on September 28, 2021.
In addition, the Company and Mr. White entered into a special bonus letter
agreement (the "Letter Agreement"), pursuant to which Mr. White will receive an
additional one-time special bonus of $150,000 (the "Special Bonus"), to be paid
within 30 days of the execution of the Letter Agreement. The Special Bonus is
subject to repayment if within 12 months of the date of the Letter Agreement the
Company terminates Mr. White's employment for "Gross Misconduct" or Mr. White
voluntarily resigns for other than "Good Reason" (as each such term is defined
in the Severance Agreement).
The foregoing description of the Letter Agreement is qualified in its entirety
by reference to the full text of the Letter Agreement, which is filed as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
There are no arrangements or understandings between Mr. White and any other
persons pursuant to which he was selected as Chief Financial Officer of the
Company. There are also no family relationships between Mr. White and any
director or executive officer of the Company and Mr. White has no direct or
indirect material interest in any related party transaction required to be
disclosed pursuant to Item 404(a) of Regulation S-K.
Item 8.01 Other Events.
As previously disclosed on December 2, 2021, following feedback from the Federal
Trade Commission ("FTC") that led the Company and Great Outdoors Group, LLC
("Great Outdoors Group") to believe they would not obtain FTC clearance to
consummate their merger, the parties determined that the best course of action
was to terminate their Agreement and Plan of Merger, dated December 21, 2020
(the "Merger Agreement"). Under the termination agreement entered into between
the Company and Great Outdoors Group, Great Outdoors Group paid the Company the
Parent Termination Fee (as defined in the Merger Agreement) of $55.0 million.
Following the termination, the Company's Board and management have initiated a
number of actions to reposition the Company for continued success on a
standalone basis. These actions include refining the Company's long-range
strategic plan, undertaking a reevaluation of the Company's capital allocation
priorities, and entering into new retention agreements with senior executives
and leaders across the Company. The Company expects to provide an update on many
of these initiatives prior to or concurrent with the filing of its fourth
quarter and fiscal year 2021 results. The Board and the Company's management
team are committed to continuing to act in the best interest of the Company and
its stockholders.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
Exhibit 10.1 Employment Agreement, dated January 21, 2022, between Sportsman's
Warehouse Holdings, Inc. and Jon Barker.
Exhibit 10.2 Letter Agreement, dated January 21, 2022, between Sportsman's
Warehouse Holdings, Inc. and Jeff White.
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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