Employment and Post-Termination Arrangements
Mr. Scheirman’s Employment Agreement
On September 25, 2017, Mr. Scheirman entered into an employment and non-competition agreement (the “CEO Employment Agreement”) with the Company to serve as President and Chief Executive Officer, effective September 25, 2017, for a term ending on March 31, 2021, plus automatic one-year renewals thereafter unless either party provides notice of intent not to renew the agreement.
Under the terms of the CEO Employment Agreement, in the event that Mr. Scheirman’s employment is terminated by the Company without Cause, he resigns for Good Reason (each as defined in the CEO Employment Agreement), separates employment due to death or disability or the Company fails to renew his agreement upon its expiration, Mr. Scheirman would be entitled to (i) a severance payment equal to 1.5 times the sum of Mr. Scheirman’s then-current annual base salary and target bonus for the year of termination, payable in equal installments during the eighteen (18) month period following the termination date; (ii) a prorated portion of his STIP bonus based on the number of full months completed during the fiscal year in which such termination of employment occurs and based on final Company performance for the STIP year, payable at the same time as annual bonuses become payable to other executive employees; (iii) accelerated vesting of any outstanding equity awards that would have otherwise vested in the next twelve months following the termination (for performance-based awards, vesting will be based on actual performance determined at the end of the performance period); (iv) the cost of continuing health and dental coverage under the Company’s plans as then in effect, less the employee contribution for an active employee, for up to eighteen (18) months; and (v) other than in the case of a termination for death or disability, up to six months of outplacement services. The estimated cash severance payment to Mr. Scheirman on termination, assuming a termination as of December 31, 2021, would have been $2,833,790 (inclusive of $14,063 in COBRA insurance coverage and outplacement services valued at $15,000) for termination without “Cause,” for “Good Reason,” for the Company’s failure to renew the agreement, or termination due to his death or disability.
In the event that Mr. Scheirman experiences a termination event as described above within six months prior to or two years following a Change in Control (as defined in the CEO Employment Agreement) of the Company, Mr. Scheirman will receive the benefits described in the foregoing paragraph, except that the severance and COBRA continuation benefits in items (i) and (iv) above would be extended from eighteen to twenty-four months, and his outstanding equity awards would vest in full (with any performance-based awards vesting at the target level of performance). The estimated cash severance payment to Mr. Scheirman on termination in connection with a Change in Control, assuming a termination as of December 31, 2021, would have been $3,773,387 (inclusive of $18,751 in COBRA insurance coverage and outplacement services valued at $15,000).
Mr. Scheirman is subject to certain restrictive covenants in the CEO Employment Agreement, including obligations regarding noncompetition and non-solicitation of Company employees and customers during the term of his employment and for a period of eighteen months following any termination of his employment with the Company.
Mr. Dubin’s Employment Arrangement
Mr. Dubin does not have an employment agreement with the Company. Upon a termination of his employment as of December 31, 2021, Mr. Dubin would have been eligible to receive an estimated $905,510 in cash severance (inclusive of $14,049 in COBRA insurance coverage and outplacement services valued at $15,000) upon a termination without “cause” or for “good reason” pursuant to our Executive Severance Guidelines, as summarized below. Also, pursuant to the Executive Severance Guidelines, the estimated cash severance payment to Mr. Dubin on termination in connection with a Change in Control (as defined in the Omnibus Incentive Plan), assuming a termination as of December 31, 2021, would have been $1,350,766 (inclusive of $21,074 in COBRA insurance coverage and outplacement services valued at $15,000).
Mr. Lowe’s Employment Offer Letter
In connection with his transition to the position of Senior Vice President & General Manager, Secure Card, Mr. Lowe entered into a new offer letter agreement with the Company, dated as of October 1, 2021. This offer letter provides for an annual base salary of $420,000, as well as eligibility for the Company’s STIP and eligibility to receive long-term incentives under the Omnibus Incentive Plan.
Mr. Lowe’s offer letter does not provide for any severance benefits, however, upon a termination of his employment as of December 31, 2021, Mr. Lowe would have been eligible to receive an estimated $806,049 in cash severance (inclusive of $14,049 in COBRA insurance coverage and outplacement services valued at $15,000) upon a termination without “cause” or for “good reason” pursuant to our Executive Severance Guidelines, as summarized below. Also, pursuant to the Executive Severance Guidelines, the estimated cash severance payment to Mr. Lowe on termination in connection with a Change in Control (as defined in the Omnibus Incentive Plan), assuming a termination as of December 31, 2021, would have been $1,201,574 (inclusive of $21,074 in COBRA insurance coverage and outplacement services valued at $15,000).