| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 3, 2022, the Company entered into retention agreements with certain key employees, including the Company’s named executive officers, pursuant to the approval of the Board of Directors (the “Board”) of Armstrong Flooring, Inc. (the “Company”).
Pursuant to the respective retention agreements, retention payments equal to $432,250 for Mr. Vermette, $193,375, for Ms. Trojanowski, $155,084 for Mr. Parisi, $151,558 for Mr. Flaharty and $129,390 for Mr. Bassett, were paid on or around May 6, 2022. The retention amounts must be repaid by the named executive officer in accordance with the retention agreement if the executive resigns from employment for any reason or is terminated by the Company for cause prior to the vesting date of September 30, 2022. Prior to the vesting date, the repayment obligation will lapse upon the earliest to occur of (i) the termination of the executive’s employment by the Company without cause or due to the executive’s death or (ii) such earlier date as determined in the discretion of the Chief Executive Officer of the Company (or, in the case of the retention letter with Mr. Vermette, the Chairman of the Management Development and Compensation Committee).
The foregoing summary of the retention agreements does not purport to be complete and is subject to, and qualified in its entirety by reference to, the form agreement to be filed by the Company with its Quarterly Report on Form 10-Q for the quarter ending June 30, 2022.
Cautionary Information Regarding Trading in the Company’s Securities.
As previously announced, on May 8, 2022, the Company together with certain of its subsidiaries filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (collectively, the “Chapter 11 Filings”). The Company continues to face certain risks and uncertainties that have been affecting its business and operations, and these risks and uncertainties may affect the Company’s ability to enter into a sale transaction and could impact the outcome of the Chapter 11 Filings. Holders of the Company’s equity securities will likely be entitled to little or no recovery on their investment following the Chapter 11 Filings, and recoveries to other stakeholders cannot be determined at this time. The Company cautions that trading in the Company’s securities given the pendency of the Chapter 11 Filings is highly speculative and poses substantial risks. Trading prices for the Company’s securities may bear little or no relationship to the actual value realized, if any, by holders of the Company’s securities in the Chapter 11 Filings. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
2