Business Context and Reporting Period
This Form 8-K Current Report was filed by Accel Entertainment, Inc. on July 15, 2020. The filing discloses the execution of amended and restated executive employment agreements with three key officers: the Chief Executive Officer, the General Counsel/Chief Compliance Officer/Secretary, and the Chief Financial Officer.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation terms and severance arrangements.
Material Changes and Executive Compensation
The Company entered into new employment agreements with the following executives, updating their base salaries, bonus targets, and severance provisions:
- Andrew Rubenstein (CEO):
- Base Salary: $750,000.
- Target Annual Bonus: 100% of base salary.
- Severance (Without Cause/Good Reason): Two years of base salary plus the two most recent annual bonuses, plus two years of COBRA coverage.
- Change in Control: Includes pro-rated bonus and accelerated vesting of unvested equity awards.
- Covenants: Three-year post-termination non-competition and non-solicitation.
- Derek Harmer (General Counsel/CCO/Secretary):
- Base Salary: $400,000.
- Target Annual Bonus: 55% of base salary.
- Severance (Without Cause/Good Reason): One year of base salary plus the most recent annual bonus, plus twelve months of COBRA coverage.
- Covenants: One-year post-termination non-competition and non-solicitation.
- Brian Carroll (CFO):
- Base Salary: $350,000.
- Target Annual Bonus: 50% of base salary.
- Severance (Without Cause/Good Reason): One year of base salary plus the most recent annual bonus, plus twelve months of COBRA coverage.
- Covenants: One-year post-termination non-competition and non-solicitation.
All severance payments are contingent upon the executive delivering an effective release of claims against the Company.
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or management commentary regarding business operations. The primary risk disclosed relates to the potential future liability for severance payments should any of these executives be terminated without cause or resign for good reason, particularly in the event of a change in control for the CEO.
Investor Verification Checklist
- Review the full text of Exhibits 10.10(A), 10.11(A), and 10.12(A) for specific definitions of "cause," "good reason," and "change in control."
- Verify the total potential cash outlay for severance if all three executives were terminated simultaneously under the "without cause" provisions.
- Assess the impact of the CEO's accelerated equity vesting clause on shareholder dilution in a change of control scenario.
- Confirm the duration and scope of the non-competition covenants, noting the CEO's three-year restriction versus the one-year restriction for the other officers.