Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective July 31, 2014, Nikhil A. Mehta resigned as Chief Financial Officer of Clean Diesel Technologies, Inc. (the “Company”) in order to pursue other opportunities. He will remain employed by the Company in a transitional capacity until August 30, 2014. The Company’s Board of Directors has determined that Mr. Mehta’s departure will be treated as resignation for good reason, pursuant to his employment agreement. In connection with Mr. Mehta’s resignation, the Company and Mr. Mehta have entered into a separation and release agreement (the “Separation Agreement”). The Separation Agreement provides for, among other things: (i) severance benefits of (a) one year’s salary of $310,000, payable on a bi-weekly basis; (b) a prorated, lump-sum bonus in the amount of $27,125 pursuant to Mr. Mehta’s personal objectives under his 2014 bonus plan; (c) the accelerated vesting of all stock options and restricted share units held by Mr. Mehta and the extension of the expiration date on his options from 90 days to 180 days after the date of his separation; (d) one year of medical, dental and vision coverage; and (e) outplacement assistance; and (ii) the release by Mr. Mehta of all claims against the Company. The description of the Separation Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement, which is filed as exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference. The parties also agreed to waive the 90 day notice period under Mr. Mehta’s employment agreement.
Effective July 31, 2014, the Company’s Board of Directors appointed David E. Shea to serve as Chief Financial Officer and Chief Accounting Officer.
Mr. Shea, age 51, has served as the Company’s Vice President of Finance and Treasurer since May 2013 and Corporate Controller since April 2014. Mr. Shea joined the Company as Corporate Controller in October 2010 following the business combination of the Company and Catalytic Solutions, Inc., a position which he held until May 2013. Mr. Shea served as the Corporate Controller of Catalytic Solutions, Inc. from October 2009 to October 2010 and Manager of Financial Planning and Analysis from October 2005 to October 2009.
Mr. Shea will continue to serve as Vice President of Finance, Treasurer and Corporate Controller until a successor is named.
Mr. Shea’s compensation was not changed in connection with his new appointment. There are no arrangements or understandings between Mr. Shea and any other person pursuant to which Mr. Shea was appointed Chief Financial Officer and Chief Accounting Officer. Mr. Shea is not related to any other director or executive officer of the Company. There are no related person transactions involving Mr. Shea that are reportable under Item 404(a) of Regulation S-K.
A copy of the press release relating to Mr. Mehta’s departure and the appointment of Mr. Shea is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | | Description of Exhibits |
| 10.1 | | Separation Agreement and Release, dated July 31, 2014, between Nikhil A. Mehta and Clean Diesel Technologies, Inc. |
| 99.1 | | Press Release dated July 31, 2014 |
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