Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Phantom Stock Awards Pursuant to the
By unanimous written consent, all of the directors of
The Board of Directors ("Board") had taken the opportunity to review and discuss
the
The two executive officers who are also directors immediately transferred their
phantom stock ("Phantom Stock") and related Phantom Stock Awards to family inter
vivos trusts as permitted by the Company's 2014 Equity Plan. Those two officers
were
The awards are to be governed by a separate Phantom Stock Award Agreement ("Phantom Stock Award Agreement") for each recipient awarded Phantom Stock, a template of a form of such Phantom Stock Award Agreement is Exhibit 99.1 to this Current Report on Form 8-K.
The Phantom Stock Award Agreements describe that the shares of Phantom Stock that were awarded are non-forfeitable but unvested on the Award Date and vest as to the economic value of 50% of the shares of Phantom Stock awarded on the First Event Payment Date and as to the economic value of 50% of the shares of Phantom Stock awarded on the Second Event Payment Date. The Phantom Stock Award Agreements terminate on the earlier to the payment to the participant ("Participant") as a result of the second event or the 15th anniversary of the Phantom Stock Award Agreement.
Shares of Phantom Stock are not convertible, exercisable or exchangeable into
the Company's Common Stock, par value
Upon the occurrence of a Payment Event as defined in the Phantom Stock Award
Agreement, the Company will incur a liability to each Participant that is to be
remitted as a cash payment ("Payment"), subject to certain limitations as
described below, equal to: (x) the number of vested shares of Phantom Stock held
by such Participant, multiplied by (y) the fair market value as defined. The
"Fair Market Value" on any given day is the value of one share of Common Stock
determined as follows: (i) if the Common Stock is then listed or admitted to
trading on a
The Payment, subject to any limitations, shall be made within thirty (30) days after receipt of funds by the Company as a result of the Payment Event, and all of such Participant's shares of Phantom stock that vested as a result of the Payment Date Event shall terminate and be cancelled upon the payment, and the Participant shall have no further rights in respect of that portion of Participant's shares of Phantom Stock other than rights to receive any unpaid portion of the Payment that was limited to any limitations described below. Any Payment due to a Participant is subject to the execution and non-revocation of general release of claims, in a form provided by the Company, and continuous compliance with any restrictive covenant agreement, confidentiality agreement or other agreement entered into between the Participant and the Company or its subsidiaries and affiliates.
A Payment Event is a monetization event with an unrelated, unaffiliated third
party, such as a sale of all or substantially all of an asset, the entering into
a joint venture, license or sublicense or a similar transaction structure, that
is not an equity or similar or debt investment in the Company or a subsidiary
unless such equity or similar investment results in a unrelated, unaffiliated
third party or group of parties acting together, resulting in such party or
parties owning more than a 50% voting interest in the Company or a subsidiary of
the Company and resulting in payments aggregating at least
If the calculation of the payment based on the definition of Fair Market Value, exceeds 50% the amount of cash of received by the Company with respect to a Payment Event, an initial payment shall be limited to 50% of the cash received by the Company with respect to the Payment Event and the unpaid balance shall be carried as a liability due to the Participant to be added to the payment amount of the Second Payment Event, subject to the same limitation. Any remaining liability resulting from the payment amount limitation described in this section after the Second Payment Event shall be reduced to that amount agreed in good faith by the Participant and the Company and if no amount can be agreed within ninety (90) days, shall be determined by mediation.
Other than adjustments for stock splits, reverse stock splits, stock dividends and similar recapitalizations, the Phantom Stock Award Agreements do not provide for distributions or anti-dilution protections.
By accepting the shares of Phantom Stock, the Participants agreed that such awards were special incentive compensation are not to be taken into account, in any manner, as salary or compensation or performance bonus in determining the amount of any payment under any pension, retirement, life insurance, disability, severance or other employee benefit plan of the Company and its subsidiaries and affiliates. In addition, each beneficiary of the Participant shall be deemed to have agreed that such award shall not affect the amount of any life insurance coverage, if any, provided by any person on the life of the Participant which is payable to such beneficiary under any life insurance plan covering employees and shall not affect any matching obligation that the Company may otherwise have with respect to 401(k) or other retirement plans or health plans. Nothing contained in the Phantom Stock Award Agreements or the Company's 2014 Equity Plan shall prevent the Company from adopting or continuing in effect other compensation arrangements.
The above is a summary of what the Company believes are key the provisions of
the Phantom Stock Award Agreements. A copy of the Template of Form of Phantom
Stock Award Agreement is filed as Exhibit 99.1 to this Current Report on Form
8-K. The above summary is qualified in its entirety by the Current Report on
Form 8-K including the copy of the Template of Form of Phantom Stock Award
Agreement filed as Exhibit 99.1 to such report. A complete copy of the Company's
2014 Equity Plan was filed as Exhibit 10.2 to the Company's Current Report on
Form 8-K filed on
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. Exhibit Number Exhibit Description 99.1* Template of Form of Phantom Stock Award Agreement datedJune 7,2023 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date:
(Registrant) By: /s/Jeff E. Margolis Jeff E. Margolis SVP, CFO, Secretary and Treasurer
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