cvet-202208110001752836false00017528362022-08-112022-08-11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
____________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 8/11/2022
____________
COVETRUS, INC.
(Exact Name of Registrant as Specified in its Charter)
____________
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Delaware | | 001-38794 | | 83-1448706 |
(State or other jurisdiction of incorporation) | | (Primary Standard Industrial Classification Code Number) | | (I.R.S. Employer Identification No.) |
7 Custom House Street
Portland, ME 04101
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (888) 280-2221
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class | | Trading Symbol(s) | | Name of Each Exchange on Which Registered |
| Common Stock, par value $0.01 per share | | CVET | | NASDAQ Global Select Market |
| | | | | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| | | | | |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company | ☐ |
| |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. | ☐ |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On August 11, 2022, Covetrus, Inc. (the “Company”) announced that Matthew Foulston, the Company’s Executive Vice President and Chief Financial Officer, has informed the Company that he will be retiring from the Company effective December 31, 2022.
On August 5, 2022, the Company entered into an amendment (the “Amendment”) to Mr. Foulston’s employment agreement, dated as of May 11, 2020, in order to retain Mr. Foulston’s services through December 31, 2022, the final date of Mr. Foulston’s employment (the “Expiration Date”). The Amendment provides for, among other terms: (i) the vesting of outstanding equity grants held by Mr. Foulston on the earlier of the Expiration Date or the consummation of the previously disclosed acquisition of the Company pursuant to the transactions contemplated by that certain Agreement and Plan of Merger, by and among the Company, Corgi Bidco, Inc., and Corgi Merger Sub, Inc., dated May 24, 2022; (ii) the payment of Mr. Foulston’s annual bonus at an amount equal to the greater of Mr. Foulston’s 2022 target bonus or the amount earned based on the actual achievement of performance goals under the Company’s 2022 annual bonus plan; (iii) severance of $2,020,000 paid over twelve months following the Expiration Date; (iv) eighteen-months COBRA continuation; and (v) the payment of his base salary through the Expiration Date if his employment is terminated prior to the Expiration Date. In the event that Mr. Foulston’s employment is terminated prior to the Expiration Date, either by the Company without “cause,” by Mr. Foulston for “good reason” or by reason of death or “disability” (each as defined in the Amendment), Mr. Foulston will continue to be entitled to the payments and benefits described above, as well as payment of his base salary and provision of health benefits through the Expiration Date.
The foregoing description of the Amendment is not complete and is qualified in its entirety by reference to the full text, which is filed hereto as Exhibit 10.1 and incorporated by reference herein.
The Company has initiated a search to identify and recruit a candidate to fill this position.
Item 9.01 Financial Statements and Exhibits.
| | | | | | | | |
| Exhibit No. | | Description |
| 10.1 | | |
| 99.1 | | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Covetrus, Inc. |
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| Date: | August 11, 2022 | By: | | /s/ Margaret B. Pritchard |
| | Name: | | Margaret B. Pritchard |
| | Title: | | General Counsel & Corporate Secretary |
DocumentINSTRUMENT OF AMENDMENT
EMPLOYMENT AGREEMENT
BETWEEN
COVETRUS INC. AND MATTHEW FOULSTON
This Amendment to the Employment Agreement dated May 11, 2020 (the “Employment Agreement”) between Covetrus, Inc. (the “Company”) and Matthew Foulston (the “Executive”) is made and effective as of August 5, 2022 by the Company and the Executive.
RECITALS:
A.The Company and the Executive are parties to the Employment Agreement that sets forth the material terms and conditions of the Executive’s employment with the Company as its Chief Financial Officer.
B.The Company and the Executive desire to amend the Employment Agreement to provide for the separation of the Executive’s employment with the Company effective December 31, 2022 and certain other matters.
AGREEMENT:
In consideration of the premises and the mutual covenants set forth herein, the Company and the Executive hereby agree to amend the Employment Agreement as follows:
1.Section 1(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
“(a) Term. This Agreement commenced on the Effective Date and shall continue until December 31, 2022, unless earlier terminated as provided herein (the ‘Term’). Upon the scheduled expiration of the Term on December 31, 2022, the employment of the Executive by the Company shall automatically terminate.”
2.Section 3(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
“(a) Annual Incentive Compensation. The Executive shall be entitled to a Target Incentive Bonus with respect to the 2022 fiscal year of the Company in an amount that is the greater of (i) the Executive’s target bonus amount of $540,000; or (ii) the bonus amount earned by the Executive based on the actual achievement of performance goals under the Company’s annual bonus plan for 2022. The Target Incentive Bonus shall be paid in a lump sum after the end of the 2022 fiscal year at the same time and under the same terms and conditions as other executives of the Company; provided that the Executive remains employed by the Company until December 31, 2022 (other than as provided in Section 7(c) hereof), and in no event shall the Executive’s bonus be paid later than March 15, 2023.”
3.Section 3(b) of the Employment Agreement is hereby deleted in its entirety and replaced with the following.
“(b) Long-Term Incentive Compensation. All outstanding equity grants held by the Executive shall continue to vest in accordance with their terms for the remainder of the Term, in accordance with the terms of the applicable award agreements and subject to Section 7(c)(iv) below.”
4.Sections 7 and 7(a) of the Employment Agreement are hereby deleted in their entirety and are renamed and replaced with the following:
“7. Termination without Cause; Expiration of Term. If the Executive’s employment is terminated by the Company without Cause (as defined below), or by the Executive for Good Reason (as defined below) prior to the scheduled expiration of the Term on December 31, 2022, or due to the scheduled expiration of the Term on December 31, 2022, the provisions of this Section 7 shall apply.
(a) The Company may terminate the Executive’s employment at any time without Cause upon not less than thirty (30) days’ prior written notice to the Executive, and the Executive may resign for Good Reason (as defined below). The Executive’s employment shall terminate automatically and without action of either party upon the scheduled expiration of the Term on December 31, 2022.”
5.Sections 7(c)(i) and (ii) of the Employment Agreement are hereby deleted in their entirety and replaced with the following:
“(i) (a) if the Executive’s termination date occurs prior to the scheduled expiration of the Term on December 31, 2022, continuation of the Executive’s Base Salary (at the rate then in effect) for the remainder of the Term, and (b) upon the scheduled expiration of the Term on December 31, 2022, continued payments to the Executive for twelve (12) months thereafter at the rate of $2,020,000 annually, which shall be paid in regular payroll installments over such twelve (12) month period following the scheduled expiration of the Term on December 31, 2022;
(ii) The Target Incentive Bonus, payable as and in accordance with Section 3(a) (without duplication); and”
6.Section 7(c)(iii) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
“If the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then continued health (including hospitalization, medical, dental, vision etc.) insurance coverage substantially similar in all material respects as the coverage provided to the Company’s then other active senior executives for the Subsidy Period (as defined below); provided that the Executive shall pay an amount equal to the amount active employees pay for such coverage as of the date of the Executive’s termination (the “Monthly COBRA Costs”) and the period of COBRA health care continuation coverage provided under section 4980B of the Internal Revenue Code, as amended and the regulations and guidance promulgated thereunder (the “Code”) shall run concurrently with the period; provided further that, notwithstanding the foregoing, the amount of any benefits provided by this subsection (c)(iii) shall be reduced or eliminated to the extent the Executive becomes entitled to duplicative benefits by virtue of the Executive’s subsequent or other employment; and provided further that, notwithstanding the foregoing, if the Company’s making payments under this Section 7(c)(iii) would violate any nondiscrimination rules applicable to the Company’s group health plan under which such coverage is made available, or result in the imposition of penalties under the Code or the Affordable Care Act, or be impermissible under applicable law, the Parties agree to reform this Section 7(c)(iii) in a manner as is necessary to comply with such requirements and avoid such penalties. For purposes of this Section 7(c)(iii), the “Subsidy Period” shall commence on the date that the Executive’s employment with the Company is terminated pursuant to Section 7 (i.e. upon the scheduled expiration of the Term, or, if sooner, the date the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason) and shall continue through the date that is eighteen (18) months following the scheduled expiration of the Term on December 31, 2022.”
7.A new clause (iv) is added at the end of Section 7(c) of the Employment Agreement to provide as follows:
“(iv) Effective at the scheduled expiration of the Term on December 31, 2022 or, if earlier, the date of consummation of the transactions proposed by that certain Merger Agreement by and between the Company, Corgi Bidco, Inc., and Corgi Merger Sub, Inc., dated May 24, 2022, (x) all outstanding equity grants held by the Executive that vest based upon the Executive’s continued service over time shall accelerate, and become fully vested and/or exercisable, as the case may be, and (y) all outstanding equity grants held by the Executive that vest based upon attainment of performance criteria shall accelerate, and become vested and/or exercisable, as the case may be, at the applicable target level of performance. Exhibit A provides a complete list of all equity awards subject to this Section 7(c)(iv).”
8.Section 9 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:
“9. Death; Disability. Any termination of the Executive’s employment by the Company by reason of death or, subject to the requirements of applicable law, Disability (as defined below), shall be treated for all purposes under this Agreement in the same manner as a termination of the Executive by the Company without Cause or resignation by the Executive for Good Reason as described in Section 7 above. In the event of the Executive’s death, whether during or after the Executive’s employment, any payments to which the Executive is entitled under the terms of this Agreement shall be paid to the Executive’s estate.”
9.Section 11(a) of the Employment Agreement is hereby deleted in its entirety, and the provisions of Section 7, as amended hereby, shall apply in lieu thereof.
10.Section 12(d) of the Employment Agreement is hereby amended to include the following at the end thereof:
“Notwithstanding the foregoing, neither the Amendment to the Employment Agreement dated May 11, 2020 nor the actions contemplated thereby, including any announcement of the Executive’s termination of employment or the transition of his duties in connection therewith, shall constitute a “Good Reason” for termination of employment.”
11.A new clause (iii) is added at the end of Section 13(c) of the Employment Agreement to provide as follows:
“(iii) shall not be required to take any steps to mitigate or offset any severance payments that are payable pursuant to Section 7 of this Agreement.”
12.In all other respects, the provisions of the Employment Agreement shall continue in effect and are hereby confirmed.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date noted in the first paragraph hereof.
COVETRUS, INC.
BY: /s/ Ben Wolin________
Name: Ben Wolin
Title: Chief Executive Officer
EXECUTIVE
/s/ Matthew Foulston
Matthew Foulston
Document
Covetrus Announces Retirement of Matthew Foulston
Portland, Maine, August 11, 2022 -- Covetrus® (NASDAQ: CVET), a global leader in animal-health technology and services, today announced that Matthew Foulston, the Company’s Executive Vice President and Chief Financial Officer, has informed the company that he will be retiring from the company effective December 31, 2022.
Foulston’s role at Covetrus caps off a strong career in which he has led technical, strategic and operational finance teams within a broad range of manufacturing, distribution and automotive companies. Since joining Covetrus in 2020, Foulston’s leadership and depth of experience served the company well. “Matthew is a strong financial partner to our business, our leadership, our Board, and me. Plus, he’s a great advocate for our employees – one example being his development of the intern and mentoring programs that will extend beyond the finance team throughout the organization. So, while I will be sorry to see Matthew leave, it’s clear his impact will continue long after his final day at Covetrus,” said Ben Wolin, President and CEO of Covetrus. “We appreciate Matthew’s many contributions, and we wish him much enjoyment in his well-earned retirement.”
“It has been great to finish up my career working with such a talented team in such a dynamic industry,” Foulston said. “The sense of purpose and the long runway ahead for this business make Covetrus a very compelling place to work, and I look forward to seeing the Company’s continued growth and great success.”
A search for the role of Chief Financial Officer is underway, and Foulston is assisting in the process to ensure a smooth transition to his successor.
About Covetrus
Covetrus is a global animal-health technology and services company dedicated to empowering veterinary practice partners to drive improved health and financial outcomes. We are bringing together products, services, and technology into a single platform that connects our customers to the solutions and insights they need to work best. Our passion for the well-being of animals and those who care for them drives us to advance the world of veterinary medicine. Covetrus is headquartered in Portland, Maine with more than 5,700 employees serving over 100,000 customers around the globe. For more information about Covetrus visit https://covetrus.com/.
Forward-Looking Statements
This press release contains certain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and that involve risks and uncertainties, including statements about our plans, objectives, expectations, and intentions. Such statements are subject to numerous risks and uncertainties. Factors that could adversely affect our business and prospects are set forth in our public filings with the Securities and Exchange Commission. Our forward-looking statements are based on current beliefs and expectations of our management team and, except as required by law, we undertake no obligations to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release, whether as a result of new information, future developments or otherwise. Investors are cautioned not to place undue reliance on these forward-looking statements.
Investor Contact:
Nicholas Jansen
nicholas.jansen@covetrus.com
(207) 550-8106
Media Contact:
Mona Downey
mona.downey@covetrus.com
