NU RIDE INC. appointed William Gallagher as new CEO

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


Departure of Directors


Pursuant to the Plan, as of the Effective Date, the following persons no longer serve on the board of directors of the Company: Daniel A. Ninivaggi, Joseph B. Anderson, Jr., Keith Feldman, David T. Hamamoto, Edward T. Hightower, Jane Reiss, Laura J. Soave, Dale Spencer, and Angela Strand.


Termination of Executives


Pursuant to the Plan, as of the Effective Date, the employment of the following executive officers of the Company was terminated: Messrs. Ninivaggi and Hightower and Adam Kroll. In connection with such termination, each entered into a severance agreement with the Company on terms previously approved by the board of directors and the Bankruptcy Court.


Severance Agreements


Pursuant to the Plan, on March 13, 2024, the Company entered into a Severance Settlement Agreement (the "Severance Agreement") with each of Messrs. Ninivaggi, Hightower and Kroll (each, a "Former Executive"). The Severance Agreements provide for certain payments and benefits to each Former Executive in consideration of obligations that existed under employment agreements with each Former Executive and in connection with providing consulting services to the Company upon emergence.


The Severance Agreements provide that each Former Executive receives an allowed general unsecured claim for severance on the Effective Date in the following amounts: Mr. Ninivaggi: $550,000; Mr. Hightower: $975,267; and Mr. Kroll: $685,000; (each, a "Proposed Allowed Employee Claim"), in exchange for their agreement to (a) release certain claims against the Debtors, (b) comply with restrictive covenants, including confidentiality and assignment of inventions covenants, under the Employment Agreements and other agreements with the Company containing these terms and (c) consult with the post-Effective Date Company for a specified number of hours over a six-month period for no additional consideration in the case of Messrs. Ninivaggi and Hightower and for a specified rate with respect to continuing SEC reporting obligations and certain other responsibilities for Mr. Kroll. In each case, the Former Executives will provide support with respect to the claims reconciliation process, satisfaction of applicable SEC and other regulatory requirements, filing of tax returns, and assistance with respect to prosecution of causes of action retained by the Company pursuant to the Plan.


Distributions with respect to the Proposed Allowed Employee Claims will be made as follows: (a) distribution on account of two thirds of the Proposed Allowed Employee Claim is to be made within 30 days of the Effective Date and (b) the remainder is to be made within 120 days of the Effective Date. The Former Executives are not entitled to a greater percentage recovery than other allowed general unsecured claims and are entitled to any subsequent "holdback" distributions that are made under the Plan.


Any unvested RSUs and options held by the Former Executives as of the Effective Date vested in full. PSUs held as of the Effective Date by Mr. Kroll vested in full, while those held by Messrs. Ninivaggi and Hightower terminated. Vested options will remain exercisable for three months following the Effective Date.


Appointment of New Board


Pursuant to the Plan, the following persons were appointed to the board of directors of the Company as of the Effective Date (the "New Board"): Alexander C. Matina, Andrew L. Sole, Michael J. Wartell, Neil Werner and Alexandre Zyngier. Biographical information about each of the members of the New Board is set forth in the Annual Report on Form 10-K filed by the Company on February 28, 2024 and such biographical information is hereby incorporated by reference.


As required by the Company's Third Amended and Restated Certificate of Incorporation (as defined below), the New Board has been divided into three classes, designated Class I, Class II and Class III. The term of the initial Class I directors (Mr. Weiner) shall expire at the annual meeting of the stockholders of the Company to be held in 2025; the term of the initial Class II directors shall expire at the annual meeting of the stockholders of the Company to be held in 2026 (Messrs. Zyngier and Wartell), and the term of the initial Class III directors (Messrs. Sole and Matina) shall expire at the annual meeting of the stockholders of the Company to be held in 2027, or, in each case, on the earlier of such persons death, resignation or removal.


The New Board has approved quarterly compensation of board members of $12,000 in cash and $8,000 in fair market value equity compensation to be issued under the Company's 2020 Equity Compensation Plan, both paid in arrears.


Appointment of New Chief Executive Officer


On the Effective Date, in accordance with the Plan, William Gallagher was appointed as the Chief Executive Officer, President, Secretary, and Treasurer of the Company. Biographical information about Mr. Gallagher is set forth in the Annual Report on Form 10-K filed by the Company on February 28, 2024 and such biographical information is hereby incorporated by reference.