Item 5.02. Departure of Directors or Certain Officers? Election of Directors? Appointment of Certain Officers? Compensatory Arrangements of Certain Officers.
As previously disclosed, on
In connection with the transactions contemplated by the Merger Agreement,
certain officers of the Company (including its current named executive officers)
may become entitled to payments and benefits that may be treated as "excess
parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"). To mitigate the potential impact of
Sections 280G and 4999 of the Code on the Company and certain executive
officers, on
(1) acceleration of the vesting and settlement of the performance-based
restricted stock units awarded toMr. Miao andMr. Ermi in 2020, which otherwise would have vested onDecember 31, 2022 and been settled betweenJanuary 1, 2023 andMarch 15, 2023 (the "2020 PSUs"), so that such 2020 PSUs will vest and be settled inDecember 2022 at 128.1% of the target levels of performance, which for Messrs. Miao and Ermi equates to 276,681 shares of the Company's common stock and 98,681 shares of the Company's common stock, respectively, provided, that if the Committee determines on or before the earlier ofMarch 15, 2023 and the closing of the Merger that the 2020 PSUs were achieved at more than 128.1% of the target level of performance, Messrs. Miao and Ermi will be issued the corresponding additional number of shares of the Company's common stock provided for in their respective grant agreements, and if the Committee determines on or before the earlier ofMarch 15, 2023 and the closing of the Merger that the recipient's 2020 PSUs were achieved at less than 128.1% of the target level of performance, Messrs. Miao and Ermi must pay to the Company as soon as practical after such determination an amount in cash equal to the fair market value of the excess number of shares they received;
(2) acceleration of the vesting of the following outstanding time-vesting
restricted stock awards, which were previously awarded to Messrs. Miao and Ermi and were scheduled to vest on the earlier to occur of their scheduled vesting date onApril 14, 2023 and the closing of the Merger (the "RSAs"): 72,036 RSAs forMr. Miao and 25,678 RSAs forMr. Ermi , provided that if the recipient would have forfeited any of his applicable RSAs as a result of the recipient's termination of employment before the earlier of the applicable scheduled vesting date in 2023 and the closing of the Merger, the recipient must pay to the Company as soon as practical after such termination an amount in cash equal to the fair market value of the number of shares that vested that would not otherwise have vested but for the acceleration; and
(3) acceleration of the vesting of the following outstanding time-vesting
restricted stock unit awards which were previously awarded to Messrs. Lewis, Miao and Ermi and were scheduled to vest on the earlier to occur of their scheduled vesting dates in March, April and/or May of 2023, and the closing of the Merger (the "RSUs"): 374,497 RSUs forMr. Lewis , 121,129 RSUs for Mr. Miao and 43,178 RSUs forMr. Ermi , provided that if the recipient would have forfeited any of his applicable RSUs as a result of the recipient's termination of employment before the earlier of the applicable scheduled vesting date in 2023 and the closing of the Merger, the recipient must pay to the Company as soon as practical after such termination an amount in cash equal to the fair market value of the number of shares issued in respect of his RSUs that would not otherwise have been issued but for the acceleration.
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These actions are intended to mitigate the potential impacts of Section 280G and 4999 of the Code on the Company and the named executive officers, including to preserve potential compensation-related corporate income tax deductions for the Company that might otherwise be disallowed through the operation of Section 280G of the Code and to mitigate or eliminate the amount of excise tax that may be payable by a named executive officer pursuant to Section 4999 of the Code.
The Company equity awards that were accelerated would have otherwise vested, if not earlier vested, upon the consummation of the Merger, assuming it is consummated.
Cautionary Statement Regarding Forward-Looking Statements
This communication includes forward-looking statements. These forward-looking
statements generally can be identified by phrases such as "will," "expects,"
"anticipates," "foresees," "forecasts," "estimates" or other words or phrases of
similar import. These statements are based on current expectations, estimates
and projections about the industry and markets in which the Company operates and
management's beliefs and assumptions as to the timing and outcome of future
events, including the transactions described in this communication. While the
Company's management believes the assumptions underlying the forward-looking
statements are reasonable, such information is necessarily subject to
uncertainties and may involve certain risks, many of which are difficult to
predict and are beyond management's control. These risks and uncertainties
include, but are not limited to: the expected timing and likelihood of
completion of the proposed transaction, including the timing, receipt and terms
and conditions of any required governmental and regulatory approvals of the
Merger; the occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement; the outcome of any legal
proceedings that may be instituted against the parties and others following
announcement of the entry into the Merger Agreement; the inability to consummate
the Merger due to the failure to obtain the requisite stockholder approvals or
the failure to satisfy other conditions to completion of the Merger; risks that
the proposed Merger disrupts current plans and operations of the Company; the
amount of the costs, fees, expenses and charges related to the transaction; and
the other risks and important factors contained and identified in the Company's
filings with the
There can be no assurance that the proposed transaction will in fact be consummated. We caution investors not to unduly rely on any forward-looking statements. The forward-looking statements speak only as of the date of this communication. The Company is not under any duty to update any of these forward-looking statements after the date of this communication, nor to conform prior statements to actual results or revised expectations, and the Company does not intend to do so.
Important Information for Investors and Stockholders
In connection with the proposed Merger, the Company has filed a preliminary
proxy statement with the
Investors and securityholders will be able to obtain a free copy of these
documents (and, when available, will be able to obtain a copy of the definitive
proxy statement) and other related documents filed by the Company with the
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Participants in the Solicitation
The Company and certain of its directors, executive officers and employees may
be considered to be participants in the solicitation of proxies from the
Company's stockholders in connection with the Merger. Information regarding the
persons who may, under the rules of the
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