Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the acquisition (the "Acquisition") of Custom Truck One
Source, L.P. by Custom Truck One Source, Inc. (formerly Nesco Holdings, Inc.)
(the "Company"), the Company has entered into an employment transition agreement
with Joshua Boone, Vice President, Integration and former Chief Financial
Officer of the Company and a good reason extension letter with each of Robert
Blackadar, former President of the Company, and Kevin Kapelke, former Chief
Operating Officer of the Company. The material terms of these agreements are
summarized below.
Joshua Boone.The Company and Mr. Boone have entered into an employment
transition agreement, pursuant to which Mr. Boone will serve as Vice President,
Integration until September 30, 2021, subject to extension from October 1, 2021
through December 31, 2021. Pursuant to the transition agreement, Mr. Boone is
entitled to receive: (i) his current base salary of $400,000, (ii) accelerated
vesting of any outstanding restricted stock units and stock options that were
not (and did not become) fully vested at the closing of the Acquisition, (iii) a
special bonus of up to $700,000 (the "Special Bonus") if his term of employment
continues through December 31, 2021, subject to conditions further specified
below, and (iv) reimbursement of business expenses, including up to $10,000 in
professional fees to negotiate and prepare the transition agreement. In
connection with the transition agreement, the Company also entered into a
restrictive covenant agreement with Mr. Boone, pursuant to which Mr. Boone is
subject to certain restrictive covenants, including confidentiality,
non-disparagement, a 12-month post-termination non-solicitation covenant, and a
post-termination non-compete covenant for the period ending the later of (A) 12
months following termination or (B) December 31, 2022.
Under the transition agreement, in the event of the termination of Mr. Boone's
employment for any reason, he would generally be entitled to receive earned but
unpaid base salary, unpaid or unreimbursed business expenses, any benefits
provided under any Company benefit plans, as well as payment of an amount equal
to 12 months of base salary plus premiums incurred for participation in COBRA
coverage pursuant to a Company sponsored group health plan ("COBRA premiums")
for 12 months. In the event that Mr. Boone's employment is terminated either by
the Company without "cause" or by Mr. Boone for "good reason" or in connection
with the expiration of the term of employment, subject to his execution and
non-revocation of a general release of claims and continued compliance with his
restrictive covenant obligations, as described above, Mr. Boone would be
entitled to the Special Bonus, payable as follows: (A) 66% of the Special Bonus
on September 30, 2021 if such termination occurs prior to October 1, 2021 or (B)
100% of the Special Bonus on December 31, 2021 if such termination occurs on or
after October 1, 2021. In the event that Mr. Boone's employment is terminated
either by the Company for "cause" or by Mr. Boone without "good reason," subject
to his execution and non-revocation of a general release of claims and continued
compliance with his restrictive covenant obligations, Mr. Boone would be
entitled to 66% of the Special Bonus if such termination occurs between October
1, 2021 and December 31, 2021.
Robert Blackadar and Kevin Kapelke. The Company entered into a letter agreement
extending the period during which each of Mr. Blackadar and Mr. Kapelke may
claim "good reason" to resign from the Company. Each letter agreement extends
such period from 60 days to 120 days following the later of (A) the occurrence
of an event that would trigger good reason or (B) each of Mr. Blackadar's and
Mr. Kapelke's actual knowledge of such event.
The foregoing descriptions of the transition agreement with Mr. Boone and the
good reason extension letter with each of Mr. Blackadar and Mr. Kapelke do not
purport to be complete and are qualified in their entirety by reference to the
text of the transition agreement and the good reason extension letter with the
applicable individual, copies of which are attached to this Current Report on
Form 8-K as Exhibits 10.1, 10.2 and 10.3 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
As previously announced and in connection with the Acquisition, Mr. Jacobson
ceased serving as the Chief Executive Officer of the Company effective April 1,
2021. In connection with his cessation of service, the Company and Mr. Jacobson
entered into a release agreement, pursuant to which Mr. Jacobson is entitled to
receive certain severance benefits in accordance with his employment agreement,
including: (i) salary continuation for 18 months, and (ii) payment for 18 months
of Mr. Jacobson's COBRA premiums. The severance benefits are subject to Mr.
Jacobson's continued compliance with the restrictive covenants provided in his
restrictive covenant agreement, including confidentiality, non-disparagement and
18-month post-termination non-compete and non-solicitation covenants. In
addition, Mr. Jacobson's outstanding equity awards accelerated upon his
cessation of service on April 1, 2021 in accordance with the terms of such
awards.
The foregoing description of the release agreement with Mr. Jacobson does not
purport to be complete and is qualified in its entirety by reference to the text
of the release agreement, a copy of which is attached to this Current Report on
Form 8-K as Exhibits 99.1 and incorporated herein by reference.
The information set forth in this Item 7.01, including Exhibit 99.1, is being
furnished and shall not be deemed "filed" for purposes of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that Section. The information in this Item 7.01, including
Exhibit 99.1, shall not be incorporated by reference into any filing of the
Company under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits: The following exhibits are attached hereto and filed herewith.
Exhibit No. Description
10.1 Transition Agreement, dated May 20, 2021, by and between Joshua Boone
and Custom Truck One Source, Inc.
10.2 Good Reason Extension Letter, dated May 21, 2021, by and between
Robert Blackadar and Custom Truck One Source, Inc.
10.3 Good Reason Extension Letter, dated May 20, 2021, by and between Kevin
Kapelke and Custom Truck One Source, Inc.
99.1* Release Agreement, by and between Lee Jacobson and Custom Truck One
Source, Inc.
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
* Certain information contained in this exhibit has been redacted pursuant to
Item 601(a)(6) of Regulation S-K.
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