Brightspring Health Services Inc.
10/11/2024 | Press release | Distributed by Public on 10/11/2024 15:21
Management Change/Compensation Form 8 K
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Officer
As of October 11, 2024, Steven S. Reed, the Chief Legal Officer and Corporate Secretary of BrightSpring Health Services, Inc. (the "Company"), has made the decision to retire from his position after over twenty years of service with the Company, first as a director, and the final eleven years as Chief Legal Officer. Mr. Reed will continue his employment in providing legal services in a different role and capacity and to ensure a smooth transition of his duties and responsibilities. The Company has commenced a search process to identify a successor to Mr. Reed.
Reed Transition Agreements
In connection with Mr. Reed's retirement, Mr. Reed and the Company have agreed to (i) amend and restate his current employment agreement with ResCare, Inc., an affiliate of the Company ("ResCare"), to govern the period of his continued employment in the role of senior legal counsel to the Company from the effective date of his retirement, October 11, 2024, through March 31, 2025 (the "A&R Employment Agreement") and (ii) entered into that certain Special Retention Agreement, dated as of October 11, 2024 (to the extent this agreement becomes effective and is not revoked in accordance with its terms) (the "Retention Agreement"). Pursuant to the terms of the A&R Employment Agreement, effective October 1, 2024, Mr. Reed is no longer eligible for any compensation and/or benefits other than a monthly base salary of $20,000, less applicable taxes and withholdings.
In addition, the A&R Employment Agreement provides that Mr. Reed will be subject to confidentiality restrictions, and further provides that, during his employment and for 12 months following the cessation of his employment, Mr. Reed will be subject to non-competition and non-solicitation restrictions. The A&R Employment Agreement also provides for, subject to approval of the Board and the compensation committee of the Board and in the event Mr. Reed's employment is terminated without cause or Mr. Reed resigns for good reason, the accelerated vesting of certain of his unvested stock options and unvested restricted stock units that were issued to Mr. Reed in connection with the Company's initial public offering.
Subject to Mr. Reed's timely execution and non-revocation of the Retention Agreement, the Retention Agreement provides for the following:
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payment of an aggregate $181,018 in a lump sum within 90 days of the effective date of the release therein;
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as additional consideration for forfeiture of any payment pursuant to the 2024 short term incentive compensation plan, payment of an aggregate $271,412 (representing Mr. Reed's pro-rata amount assuming achieving target at 100%) in a lump sum in calendar year 2025; and
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up to six (6) months of continued payment of the employer portion of Mr. Reed's COBRA coverage premiums.
In addition, so long as Mr. Reed remains employed by ResCare until March 31, 2025 or such earlier date as his employment is terminated by ResCare without Cause or he resigns for Good Reason (as such terms are defined in the A&R Employment Agreement) or his death, with such date being the date Mr. Reed shall be deemed to have resigned from ResCare (the "Termination Date") and timely executes and returns to ResCare the reaffirmation of a release agreement which is not subsequently revoked, he will also be entitled to the following:
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payment of an aggregate $724,032 in equal installments over a period of twenty-four (24) months following the Termination Date;
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up to twelve (12) months of continued payment of the employer portion of Mr. Reed's COBRA coverage premiums following the Termination Date; and
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the extension of the exercise period of Mr. Reed's vested stock options to December 31, 2027 and the extension of the vesting period of Mr. Reed's unvested performance-based stock options to March 31, 2026.
The foregoing summaries of the A&R Employment Agreement and Retention Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the A&R Employment Agreement and Retention Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.