Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Permanent CEO
On February 24, 2022, the Board of Trustees (the “Board”) of Americold Realty Trust (the “Company”) appointed George F. Chappelle Jr. as permanent Chief Executive Officer of the Company, effective immediately. As previously announced, Mr. Chappelle assumed the role of Interim Chief Executive Officer on November 2, 2021.
The Company issued a press release today announcing Mr. Chappelle as permanent Chief Executive Officer. A copy of the press release is furnished as Exhibit 99.3 to this report.
In connection with Mr. Chappelle’s appointment as permanent Chief Executive Officer, the Company provided an offer letter, dated as of February 15, 2022, which provides Mr. Chappelle the following key compensation and benefits:
•an annual base salary of $1,000,000, which will be reviewed on an annual basis;
•annual incentive compensation opportunity for meeting stated performance goals targeted at 160% of base salary, which will be reviewed on an annual basis;
•eligibility to participate in the Americold Realty Trust 2017 Equity Incentive Plan (the “Incentive Plan”) in such amounts and at such times as the Compensation Committee of the Board shall determine at its sole discretion; for 2022, Mr. Chappelle will receive an award with a targeted value of $3.56 million, subject to the terms and conditions of the Incentive Plan; and
•participation in the Company’s retirement, health and welfare, vacation and other benefit programs.
As Chief Executive Officer of the Company, Mr. Chappelle will also participate in the Executive Severance Benefits Plan (as defined below).
Mr. Chappelle’s employment with the Company will be “at will”.
The foregoing summary of the Offer Letter is not complete and is subject to, qualified in its entirety by, and should be read in conjunction with, the full text of the Offer Letter, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Executive Severance Benefits Plan
On February 24, 2022, the Board approved and adopted the Americold Logistics, LLC Severance Benefits Plan (the “Executive Severance Benefits Plan”), effective immediately. Benefits under the Plan are available to the Company’s Key Employees (as defined in the Plan), which includes the Company’s Chief Executive Officer, executive vice presidents and senior vice presidents (a “Participant”). Key Employees that were hired before the effective date of the Plan are not eligible and are specifically excluded from participation in the Plan.
Under the Plan, a Participant will be eligible to receive severance benefits under the following circumstances:
•Qualifying Termination Other than in Connection with a Change in Control. In the event of a Qualifying Termination (i.e., for “cause” by the Company or by the Participant for “good reason” (each as defined in the Plan)), then the Participant is entitled to receive: (i) cash compensation equal to a multiple of the sum of Participant’s base salary plus annual bonus at target (i.e., two times (2x) base salary plus target bonus for the Chief Executive Officer, one times (1.0x) base salary plus target bonus for executive vice presidents, and three-fourths times (0.75x) base salary plus target bonus for senior vice presidents); and (ii) continued health, dental and vision coverage under COBRA for the lesser of (A) the Participant’s COBRA eligibility or (B) 18 months for the Chief Executive Officer, 12 months for executive vice presidents and 9 months for senior vice presidents.
•Qualifying Termination on or After a Change in Control (Change of Control; Double-Trigger”). In the event of a Qualifying Termination during a Change in Control Period (i.e., within 24 months following a Change in Control (as defined in the Plan)), then a Participant is entitled to receive: (i) cash compensation equal to a multiple of the sum of Participant’s base salary plus annual bonus at target (i.e., two and one-half times (2.5x) base salary plus target bonus for the Chief Executive Officer, one and one-half times (1.5x) base salary plus target bonus for executive vice presidents and one and one-fourths times (1.25x) base salary plus target bonus for all senior vice presidents); and (ii) continued health, dental and vision coverage under COBRA for the lesser of (A) the Participant’s COBRA eligibility or (B) 18 months for the Chief Executive Officer, 12 months for executive vice presidents and 9 months for senior vice presidents.
The Plan also contains customary non-compete and non-solicitation, non-disparagement and/or confidentiality provisions. Benefits under the Plan shall be provided only if a Participant executes a separation agreement prepared by the Company. Benefits under the Plan are not available if a Participant is terminated for cause or otherwise is deemed ineligible under the Plan. Benefits are also subject to termination and the right of the Company to clawback certain benefits if a Participant violates the terms of any separation agreement entered into in exchange for severance benefits or any other restrictive covenant, including non-compete and non-solicitation, non-disparagement and/or confidentiality provisions, applicable to the Participant.
The above description of the Plan is a summary only and is qualified in its entirety by reference to the full text of the Plan, a complete copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.