Latham Group, Inc. Form 8-K Summary
Business context and reporting period
Latham Group, Inc. (Nasdaq: SWIM), a Delaware corporation headquartered in Latham, New York, filed this Form 8-K on June 14, 2022, with an earliest reported event date of June 12, 2022. The filing concerns a change in the Company’s chief financial officer and related executive compensation arrangements.
Financial metrics and liquidity
The filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other operating and financial performance metrics.
Material changes versus the prior comparable period
- Robert L. Masson II was appointed Chief Financial Officer, effective July 11, 2022.
- J. Mark Borseth announced his retirement as Chief Financial Officer effective July 11, 2022. He will remain a non-executive employee and Strategic Advisor through December 31, 2022, after which he will cease employment with the Company and its subsidiaries.
- The filing states that Mr. Borseth did not express disagreement with the Company regarding its operations, policies, or practices.
Compensation, outlook, risks, and unusual items
- Mr. Masson’s base salary is $420,000, with a target annual cash bonus equal to 60% of base salary. His 2022 bonus is guaranteed to be at least $252,000.
- Mr. Masson will receive a one-time restricted stock unit award valued at $315,000, generally vesting over three years, and a 2022 stock option award valued at $378,000, generally vesting over four years.
- Beginning in 2023, Mr. Masson is expected to receive annual equity awards with a target grant-date value of $630,000, generally vesting over four years. The Company may determine the award type.
- Mr. Masson may receive up to $150,000 in relocation expense reimbursement and is eligible for standard employee benefits.
- If terminated without cause or if he resigns for good reason, subject to a release of claims, Mr. Masson is entitled to 12 months of base salary, 12 months of COBRA coverage under specified cost-sharing terms, and payment of the prior year’s earned but unpaid bonus.
- Under Mr. Borseth’s retirement agreement, he will continue receiving his base salary through December 31, 2022 and may receive his earned 2022 bonus; 75% of his target bonus is guaranteed.
- Of Mr. Borseth’s equity, 106,606 restricted shares scheduled to vest on December 27, 2022 will vest, while his remaining unvested restricted shares will be forfeited. The Company will pay 70% of his COBRA premiums for nine months.
- Payments and vesting under Mr. Borseth’s retirement agreement are conditioned on a release of claims and continued compliance with post-employment restrictive covenants.
Important facts for investors to verify
- Confirm the July 11, 2022 effective date of the CFO transition and the December 31, 2022 end of Mr. Borseth’s employment.
- Review the complete Masson Employment Agreement and Borseth Retirement Agreement when filed in a future periodic report.
- Assess the potential compensation, equity dilution, severance, relocation, and retirement-related costs associated with the transition.
- Monitor subsequent filings for any changes to executive compensation, equity awards, or the CFO transition.