Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
Performance Share Unit Grant
On June 27, 2022, the Independent Compensation Subcommittee (“Subcommittee”) of the Compensation Committee (the “Committee”) of the Board of
Directors of Charah Solutions, Inc. (the “Company”) approved a grant of performance share units (“PSUs”) under the Charah Solutions, Inc. 2018 Omnibus Incentive Plan (the “2018 Plan”) to Mr. Scott A. Sewell, the Company’s President and Chief
Executive Officer, and Mr. Roger D. Shannon, the Company’s Chief Financial Officer and Treasurer, in the following target share amounts: Mr. Sewell, 106,666 and Mr. Shannon, 49,690. In connection with the awards, the Committee previously approved
an updated form of grant notice and award agreement for the PSUs (the “2022 PSU Grant Notice and Agreement”) to be used in fiscal year 2022 and thereafter.
Pursuant to the 2022 PSU Grant Notice and Agreement, the PSUs are eligible for dividend equivalents. Any such dividend equivalent rights are
payable in cash within 60 days following the date on which the PSUs to which they relate vest. The PSUs generally remain subject to forfeiture based on the respective officer’s continuation of employment and compliance with any confidentiality,
non-competition or non-solicitation covenants contained in the 2022 PSU Grant Notice and Agreement or in any other agreement between the Company or any affiliate of the Company and the respective officer. The PSUs vest if the employee meets the
Service Requirement of maintaining employment from the grant award date through December 31, 2024, the end of the Performance Period, defined below, and if the Company achieves certain performance goals during the period January 1, 2022 through
December 31, 2024 (the “Performance Period"), as follows: (i) the relative total shareholder return ("TSR") percentile ranking of the Company as compared to the specified performance peer group and (ii) cumulative revenue (the “Performance Goals”).
Each Performance Goal is weighted at 50% in determining the number of PSUs that become earned PSUs. The maximum number of earned PSUs for the Performance Period is 200% of the target number of PSUs. At the end of the Performance Period, the
Committee, in its sole discretion, will review the performance achieved on each Performance Goal that was established at the beginning of the Performance Period. Following vesting, the PSUs will be converted to, and paid in the form of, an
equivalent number of shares of the Company’s common stock.
The foregoing description of the terms and conditions of the 2022 PSU Grant Notice and Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of the 2022 PSU Grant Notice and Agreement, a copy of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Restricted Stock Unit Grant
On June 27, 2022, the Subcommittee approved a grant of restricted stock units (“RSUs”) under the 2018 Plan to Mr. Sewell and Mr. Shannon in the
following amounts: Mr. Sewell, 160,001 and Mr. Shannon, 74,537. In connection with the awards, the Committee previously approved an updated form of grant notice and award agreement for the RSUs (the “2022 RSU Grant Notice and Agreement”) to be used
in fiscal year 2022 and thereafter.
Pursuant to the 2022 RSU Grant Notice and Agreement, the RSUs are eligible for dividend equivalents. Any such dividend equivalent rights are
payable in cash within 60 days following the date on which the RSUs to which they relate vest. The RSUs generally remain subject to forfeiture based on the respective officer’s continuation of employment and compliance with any confidentiality,
non-competition or non-solicitation covenants contained in the 2022 RSU Grant Notice and Agreement or in any other agreement between the Company or any affiliate of the Company and the respective officer. The RSUs vest in three equal annual
installments on April 1 of each of 2023, 2024 and 2025. Following vesting, the RSUs will be converted to, and paid in the form of, an equivalent number of shares of the Company’s common stock.
The foregoing description of the terms and conditions of the 2022 RSU Grant Notice and Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of the 2022 RSU Grant Notice and Agreement, a copy of which is attached as Exhibit 10.2 hereto and is incorporated herein by reference.
President and Chief Executive Officer Employment Agreement
On June 27, 2022, the Company and its subsidiary, Charah, LLC, entered into an amended and restated employment agreement with Scott A. Sewell, the
Company’s President and Chief Executive Officer (the “CEO Employment Agreement”). The term of the CEO Employment Agreement is evergreen and will terminate upon the occurrence of one of the termination events set forth therein.
Pursuant to the CEO Employment Agreement, Mr. Sewell will receive an annualized base salary of $560,000, which may be increased annually, and is
eligible to receive (i) an annual bonus targeted in an amount at least equal to 100% of his base salary and (ii) annual awards under the Company’s 2018 Omnibus Incentive Plan.
The CEO Employment Agreement also provides for certain severance benefits following a termination without “cause” or a resignation for “good
reason” (each quoted term as defined in the CEO Employment Agreement), including (i) cash severance equal to two times (or, if within six months prior to or two years following a change in control, two and a half times) the sum of (a) the
then-current annualized base salary and (b) the target annual bonus for the year of termination, (ii) reimbursement of a certain portion of premiums paid for continuation coverage under the Company’s group health plans, and (iii) a pro-rated annual
bonus for the year in which the termination occurs. Upon Mr. Sewell’s death or “disability” (as defined in the CEO Employment Agreement), Mr. Sewell will receive, as a severance payment, a pro-rated annual bonus for the year of his termination
based on actual performance for such year. All severance payments and benefits are contingent upon Mr. Sewell signing a release in favor of the Company and its affiliates. Additionally, the CEO Employment Agreement contains certain restrictive
covenants regarding confidential information, non-competition, non-solicitation, and non-disparagement. This summary of the CEO Employment Agreement is qualified in its entirety by reference to the full text of the CEO Employment Agreement, which
is attached hereto as Exhibit 10.3 and incorporated herein by reference.