Reed’s (REED) outlines cash, stock and benefits in CEO Wallace exit deal
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Reed’s, Inc. detailed the separation arrangements for former Chief Executive Officer Cyril A. Wallace, Jr., who ended employment on March 31, 2026 and will consult through April 30, 2026. The company and Mr. Wallace entered into a Separation Agreement and Release on April 16, 2026.
Under the agreement, Reed’s will pay severance equal to one month of Mr. Wallace’s annual base salary, totaling $58,333.33, and a lump sum of $2,836.60 representing one month of COBRA premiums. The company will also waive repayment of his sign-on bonus and relocation expenses under his Employment Agreement.
In full satisfaction of a prior 46,667-share inducement restricted stock award, the Compensation Committee approved a fully vested restricted stock award for 36,657 shares under the 2020 Equity Incentive Plan, to be issued on or before April 30, 2026, plus a cash payment of $36,336.30.
Positive
- None.
Negative
- None.
8-K Event Classification
2 items: 5.02, 9.01
2 items
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Cash severance: $58,333.33
COBRA premium lump sum: $2,836.60
Inducement Award shares: 46,667 shares
+5 more
8 metrics
Cash severance
$58,333.33
One month of Cyril Wallace’s annual base salary under Separation Agreement
COBRA premium lump sum
$2,836.60
One month of COBRA premium paid as lump sum to Cyril Wallace
Inducement Award shares
46,667 shares
Original restricted stock awards referenced in Employment Agreement
New restricted stock award
36,657 shares
Fully vested shares under 2020 Equity Incentive Plan in Separation Agreement
Additional cash payment
$36,336.30
Cash amount equal to 10,010 × $3.63 closing price on Separation Date
Share price reference
$3.63 per share
Closing price of Reed’s common stock on Separation Date used in calculation
Consulting end date
April 30, 2026
Date through which Cyril Wallace will remain a consultant
Employment Separation Date
March 31, 2026
Effective date Mr. Wallace’s employment with Reed’s ended
Key Terms
Separation Agreement and Release, COBRA, restricted stock award, Amended and Restated 2020 Equity Incentive Plan, +2 more
6 terms
Separation Agreement and Release regulatory
"On April 16, 2026, the Company entered into a Separation Agreement and Release"
COBRA financial
"a lump sum payment representative of one (1) month of Mr. Wallace’s COBRA premium"
COBRA is a U.S. federal law that lets employees and their dependents temporarily keep employer-sponsored health insurance after job loss, reduction in hours, or other qualifying events by paying the premiums themselves. Investors should care because offering COBRA can affect a company’s cash flow, administrative costs and legal disclosures when workforce changes occur—similar to a former club member paying to keep their membership active after leaving the club.
restricted stock award financial
"the grant to Mr. Wallace of a restricted stock award under the Company’s Amended and Restated 2020 Equity Incentive Plan"
A restricted stock award is company shares given to an employee or executive that cannot be sold or fully owned until certain conditions—like staying with the company for a set time or hitting performance targets—are met. Think of it as a gift that only becomes yours after you fulfill specific obligations; for investors, these awards matter because they can increase the total shares outstanding when they vest, reveal how management is being paid and motivated, and create potential selling pressure when restrictions lift.
Amended and Restated 2020 Equity Incentive Plan financial
"a restricted stock award under the Company’s Amended and Restated 2020 Equity Incentive Plan (the “2020 Plan”)"
Inducement Award financial
"the Employment Agreement provided for a grant to Mr. Wallace of 46,667 restricted stock awards (the “Inducement Award”)"
An inducement award is a special cash or equity payment given to a new hire—often an executive or key employee—outside the company’s regular pay plans to persuade them to join. Think of it like a signing bonus that can align the new person’s goals with shareholders but also represents a cost and can reduce existing owners’ percentage of the company, so investors watch these awards for their impact on ownership and future performance.
Employment Agreement regulatory
"pursuant to Sections 4.2 and 4.6 of his Employment Agreement with the Company dated April 16, 2025"
FAQ
What did Reed’s, Inc. (REED) disclose about former CEO Cyril Wallace’s separation?
Reed’s, Inc. disclosed a Separation Agreement and Release with former CEO Cyril A. Wallace, Jr. It outlines severance, benefit-related payments, equity settlement, and consulting through April 30, 2026, following his earlier resignation and employment end on March 31, 2026.
What cash severance will former CEO Cyril Wallace receive from Reed’s, Inc. (REED)?
Cyril Wallace will receive a severance payment equal to one month of his annual base salary, totaling $58,333.33. He will also receive a separate lump sum of $2,836.60 representing one month of COBRA premiums under the Separation Agreement and Release.
How is Reed’s, Inc. (REED) handling Cyril Wallace’s prior inducement stock award?
A prior inducement award of 46,667 restricted shares is being fully satisfied by a new grant of 36,657 fully vested shares under the 2020 Equity Incentive Plan and a cash payment of $36,336.30, all approved by the Compensation Committee as part of the Separation Agreement.
What equity compensation is Reed’s, Inc. (REED) granting to Cyril Wallace in the separation deal?
Reed’s is granting a restricted stock award covering 36,657 shares of common stock under its Amended and Restated 2020 Equity Incentive Plan. These shares will be fully vested at issuance and are contingent on the Separation Agreement becoming effective and applicable tax withholdings.
Does the Reed’s, Inc. (REED) separation agreement include any other financial concessions?
Yes. In addition to cash payments and equity, Reed’s is waiving Cyril Wallace’s obligations to repay his sign-on bonus and relocation-related expenses. These obligations were originally set forth in Sections 4.2 and 4.6 of his April 16, 2025 Employment Agreement with the company.