Business Context and Reporting Period
This Form 8-K Current Report, dated May 20, 2021, is filed by Custom Truck One Source, Inc. (formerly Nesco Holdings, Inc.) regarding the acquisition of Custom Truck One Source, L.P. The filing details executive compensation arrangements, employment transitions, and leadership changes effective as of April 1, 2021, and May 20, 2021.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation terms and severance agreements.
- Joshua Boone (VP, Integration): Base salary of $400,000; potential special bonus up to $700,000; up to $10,000 in professional fee reimbursement.
- Lee Jacobson (Former CEO): Severance includes 18 months of salary continuation and 18 months of COBRA premium payments.
Material Changes
The primary material change is the leadership transition associated with the acquisition:
- CEO Departure: Lee Jacobson ceased serving as Chief Executive Officer effective April 1, 2021.
- Executive Agreements: New employment transition and "good reason" extension agreements were executed with Joshua Boone, Robert Blackadar (former President), and Kevin Kapelke (former COO).
- Equity Acceleration: Mr. Jacobson's outstanding equity awards accelerated upon his cessation of service.
Guidance, Outlook, and Risks
The filing contains no financial guidance or outlook. Key contingencies and risks relate to executive retention and severance liabilities:
- Retention Conditions: Joshua Boone's special bonus is contingent on employment continuing through December 31, 2021, and compliance with restrictive covenants.
- Severance Triggers: Significant severance payments (12 months base salary for Mr. Boone; 18 months for Mr. Jacobson) are triggered by termination without "cause" or resignation for "good reason."
- Restrictive Covenants: All executives are subject to confidentiality, non-disparagement, non-solicitation, and non-compete agreements ranging from 12 to 18 months post-termination.
Investor Verification Checklist
- Verify the exact vesting schedule and conditions for Joshua Boone's $700,000 special bonus.
- Confirm the total cash value of Lee Jacobson's 18-month salary continuation and COBRA payments.
- Review the attached Exhibits 10.1, 10.2, 10.3, and 99.1 for full legal terms of the transition and release agreements.
- Monitor future filings for the appointment of a permanent CEO to replace Lee Jacobson.