Superior Group of Companies (SGC) 8-KDeparture of Directors or Certain Officers

On February 13, 2024, Superior Group of Companies, Inc. (the “Company”) entered into an employment agreement with its Chief Financial Officer, Michael Koempel. This agreement supersedes the terms and conditions of his offer letter that was provided upon commencement of employment in 2022, other than for the equity awards already granted.

Mr. Koempel’s employment agreement with the Company expires on December 31, 2028, unless sooner terminated in accordance with its terms. Under the agreement, Mr. Koempel will continue to be employed as Chief Financial Officer of the Company. His annual base salary initially will be approximately $426,400. He is eligible to receive an annual target incentive bonus of 61% of his base salary based on achievement of the performance criteria and/or goals established by the Company’s Board of Directors (the “Board”), which currently is based on net earnings and subject to a minimum level of net earnings. Solely for fiscal year 2024, Mr. Koempel is entitled to a minimum guaranteed bonus of $100,000 if employed throughout the 2024 fiscal year. Mr. Koempel also is eligible to participate in such other bonus plans as the Company may in its sole and absolute discretion offer to him.

In addition, he has been guaranteed equity awards that will have a fair market value at the time of the grant of at least $304,500 for 2024 and $389,000 for 2025 and which are conditioned upon Mr. Koempel being employed by the Company at the time such awards are made to senior management and throughout the relevant vesting period(s).

The employment agreement imposes non-compete, non-solicitation and confidentiality provisions on Mr. Koempel.

Mr. Koempel’s agreement contains provisions on severance. If he is terminated without Cause within 12 months after the completion of a Change in Control, or if Mr. Koempel is terminated without Cause or resigns with Good Reason, during the term of the agreement, Mr. Koempel is entitled to an amount equal to (a) 2 times his highest annual compensation, if such termination event occurs on or before December 31, 2026, or (b) 1.1 times his highest annual compensation, if such event occurs between January 1, 2027 and December 31, 2028, inclusive, in addition to the amounts he would receive upon any termination, including (i) accrued but unpaid base salary and bonus, (ii) incurred but not reimbursed expenses, and (iii) nonforfeitable benefits already earned and payable. Mr. Koempel’s right to receive certain of these items is contingent upon him fulfilling certain post-termination obligations, including the execution of a general release. For purposes of clauses (a) and (b) above, highest annual compensation is the sum of Mr. Koempel’s single highest base salary during the preceding three-year period and the average of the annual cash bonuses paid or payable to Mr. Koempel that were calculated based on the results of the 3 full fiscal years ended immediately before his termination of employment (regardless of when paid), or, if greater, the 3 full fiscal years ended immediately prior to a Change in Control (or, if applicable, such lesser period for which cash annual bonuses were paid or payable to him).

In connection with the employment agreement, the Board awarded an equity incentive grant to Mr. Koempel effective February 12, 2024. Mr. Koempel was granted 17,233 shares of restricted stock under the Company’s 2022 Equity Incentive and Awards Plan (the “2022 Plan”). The restricted stock vests on February 12, 2027, subject to continuing employment. In addition, 100% of the restricted stock subject to the award vests immediately upon a change of control (as defined in the 2022 Plan).