Vintage Wine Estates, Inc. appointed Seth Kaufman as new CEO

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Kaufman Appointment


On July 20, 2023, the Company announced that the Board appointed Seth Kaufman, age 49, as the Company's President and Chief Executive Officer, effective on or prior to October 30, 2023. In connection with such appointment, the Company entered into an Employment Agreement (the "Employment Agreement") with Mr. Kaufman, pursuant to which the Company will pay an annualized base salary of $900 thousand, a target bonus of 80% of base salary, which is guaranteed for fiscal 2024, and a signing bonus of $326 thousand payable in two equal lump sums on the 6-month and 12-month anniversary dates of his employment, respectively. Additionally, the Company awarded Mr. Kaufman a one-time grant of 4 million stock options, pursuant to the Company's 2021 Omnibus Incentive Plan (the "2021 Plan"), with each one-fourth of the granted options vesting over four years and being exercisable at $1.50, $3.00, $4.50, and $6.00 per share respectively; 1 million time-vesting restricted stock units pursuant to the 2021 Plan, which vest over four years; and 2 million performance-vesting restricted stock units (the "PSUs") pursuant to the 2021 Plan, which vest over four years, provided that for each one-third of the granted PSUs, the Volume Weighted Average Price per share of the Company's common stock over a 30 day consecutive trading day period preceding an applicable vesting date is at least $2.00, $4.00, and $6.00 per share, respectively.


For the last four years, Mr. Kaufman has been President and CEO of Moët Hennessy North America, which is a wine and spirits business of LVMH. Prior to LVMH, Mr. Kaufman progressively advanced through several roles over a nearly 20-year career with PepsiCo, Inc., including President, PepsiCo North America Nutrition and the Hive Emerging Brand Unit, Senior Vice President, Pepsi Trademark and Flavors, and the Chief Marketing Officer, PepsiCo North America Beverages. His career began as a Regional Market Director for a division of Interep Radio. Mr. Kaufman earned his M.B.A. from the University of Michigan, Ross School of Business 


and his B.S. in Television, Radio & Film Management from the Syracuse University, S.I. Newhouse School of Public Communications.


There are no family relationships among Mr. Kaufman and any of our directors and executive officers and, except as discussed above, there are no arrangements or understandings between him and any other persons pursuant to which he was appointed as our Chief Executive Officer. Neither Mr. Kaufman nor any of his immediate family members have been a party to any transaction with the Company, nor is any such transaction currently proposed, that would be reportable under Item 404(a) of Regulation S-K.


Wheatley Separation Agreement


On July 19, 2023, the Company and Terry Wheatley, President of VWE, entered into a Separation Agreement and Release of all Claims (the "Separation Agreement") whereby Ms. Wheatley voluntarily elected to resign from the Company, effective July 19, 2023. Pursuant to the terms of the Separation Agreement, the employment agreement between the Company and Ms. Wheatley effective June 7, 2021 (the "Prior Employment Agreement") was terminated and upon such termination the Company agreed to provide Ms. Wheatley her accrued but unpaid Base Salary and PTO (as defined in the Prior Employment Agreement) through July 19, 2023, and any vested amounts or benefits that she is entitled to receive under any plan, program, or policy, as described in Section 5.1 of the Prior Employment Agreement. Pursuant to the terms of the Separation Agreement, the Company agreed to pay Ms. Wheatley an amount equal to three years of her annual base salary, to be paid in monthly installments over twenty-four consecutive months, a one-time payment of $125 thousand and reimbursement for the cost of health insurance continuation coverage through December 31, 2023, if continuation coverage is elected by Ms. Wheatley. In addition, the Company agreed to use good faith reasonable efforts to enter into an asset purchase agreement for the sale to Ms. Wheatley of the Company's intellectual property rights related to its "Purple Cowboy," "Wine Sisterhood" and "Gem & Jane" trademarks. In connection with her separation, all outstanding stock options and unvested restricted stock units previously granted to Ms. Wheatley under the 2021 Plan ceased to vest and any unvested awards were forfeited.


The Company issued press releases announcing such management changes on July 20, 2023. Copies of the press releases are attached hereto as Exhibits 99.1 and 99.2.


The foregoing summaries of the Employment Agreement and Separation Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Employment Agreement and Separation Agreement, respectively, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, which are incorporated herein by reference.


Johnston Compensation Changes


On July 17, 2023, the Compensation Committee (the "Committee") of the Board unanimously approved an increase in the annualized base salary for Kristina Johnston, Chief Financial Officer of the Company, effective July 1, 2023, from $320 thousand to $400 thousand, awarded Ms. Johnston a one-time retention bonus in the amount of $175 thousand, provided Ms. Johnston remains employed by the Company at September 30, 2023, and granted Ms. Johnston a one-time stock compensation award of 250 thousand restricted stock units that vest over two years, 500 thousand restricted stock units that vest over four years, 62.5 thousand stock options that vest over two years with an exercise price of $1.50, and 187.5 thousand stock options that vest over four years with an exercise price of $1.50.


The descriptions of Mr. Kaufman's and Ms. Johnston's option awards are not complete and are qualified in their entirety by reference to the Form of Stock Option Award Agreement (2021 Omnibus Incentive Plan), attached hereto as Exhibit 10.3 and incorporated herein by reference. The descriptions of Mr. Kaufman's and Ms. Johnston's time-vesting restricted stock unit awards are not complete and are qualified in their entirety by reference to the Form of Restricted Stock Unit Award Agreement (2021 Omnibus Incentive Plan - Time Vesting), attached hereto as Exhibit 10.4 and incorporated herein by reference. The description of Mr. Kaufman's performance-vesting restricted stock unit awards is not complete and is qualified in its entirety by reference to the Form of Restricted Stock Unit Award Agreement (2021 Omnibus Incentive Plan - Performance Vesting), attached hereto as Exhibit 10.5 and incorporated herein by reference.