Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Co-Chief Executive Officer and Director
On January 13, 2020 (the "Effective Date"), Altisource Asset Management
Corporation (the "Company" or "AAMC") appointed Indroneel Chatterjee as the
Company's Co-Chief Executive Officer, effective on such date. Mr. Chatterjee
also became a member of the Company's Board of Directors on the Effective Date.
The current Chief Executive Officer, George Ellison, will continue as co-Chief
Executive Officer and Chairman and be responsible for managing the Company's
existing business including the asset management agreement with Front Yard
Residential Corporation. Mr. Chatterjee was hired as an additional resource for
AAMC and will be responsible for implementing new business.
Mr. Chatterjee, age 39, has served as a consultant to various businesses since
March 2019. He previously served as Senior Vice President, New Business
Initiatives of Altisource Solutions, Inc. from September 2018 to March 2019.
Altisource Solutions, Inc. is a subsidiary of Altisource Portfolio Solutions
S.A. (NASDAQ: ASPS) ("ASPS"), an integrated service provider and marketplace for
the real estate and mortgage industries. Mr. Chatterjee served as Chief
Financial Officer of ASPS from October 2017 to August 2018. Prior to joining
ASPS, he served as Head of Credit Solutions, Global Markets at Nomura
Securities, an investment banking firm, from January 2017 to September 2017 and
as Executive Director on the fixed income trading desk at Nomura from August
2014. Mr. Chatterjee also held the positions of Investment Analyst, Absolute
Return Income Fund for Perry Capital from March 2013 to April 2014, Executive
Director for UBS Securities LLC from November 2009 to March 2013 and Vice
President, High Yield Research for AIG Global Investment Group from October 2006
to November 2009. He holds a Bachelor of Science in Economics from the Wharton
School of Business at the University of Pennsylvania.
Executive Compensation
On the Effective Date, the Company and Mr. Chatterjee entered into an Employment
Agreement (the "Employment Agreement") setting forth the terms of his
employment.
Mr. Chatterjee is entitled to receive an initial annual base salary of $675,000,
subject to annual adjustment by the Compensation Committee of the Company's
Board of Directors (the "Compensation Committee"), with reduction in salary
below such amount only permitted if part of an across-the-board reduction not to
exceed 10% of the salaries of all executive officers at the "chief" level.
Mr. Chatterjee will be eligible to earn annual cash bonuses beginning with the
fiscal year ending December 31, 2020. His target bonus for 2020 will be
$800,000, with a maximum bonus potential for 2020 of $1.6 million. The bonus
will be subject to the achievement of performance targets established by the
Compensation Committee. He will also receive a cash signing bonus of $800,000,
subject to an obligation to repay 100% of such signing bonus if terminated by
the Company for Cause (as defined in the Employment Agreement) or without Good
Reason (as defined in the Employment Agreement) within the first year following
the Effective Date or 50% of such signing bonus if terminated by the Company for
Cause or without Good Reason during the second year following the Effective
Date.
Mr. Chatterjee will also receive an initial equity award, which award will be
made outside of the Company's 2012 Equity Incentive Plan (the "Plan") but will
otherwise be subject to the terms and conditions of the Plan. Such initial
equity award will be an "inducement award" for purposes of the NYSE American's
exemption from shareholder approval requirements for inducement awards. The
equity award will consist of options to purchase 60,000 shares of common stock
and 60,000 restricted shares. The options will be subject to vesting following
the achievement of certain trading price targets and further time-based vesting
criteria thereafter. The restricted shares will vest annually over a four-year
period following the date of grant.
Mr. Chatterjee will be entitled to receive additional option awards in
connection with certain dilutive issuances of securities and will receive
relocation expenses and reimbursement of legal fees in connection with the
negotiation of the Employment Agreement. He will be eligible to participate in
the Company's health, life insurance, disability, retirement and other welfare
plans on the same terms available to other senior executives.
Upon termination of employment, Mr. Chatterjee will be eligible to receive
accrued salary and benefits payable through the date of termination. He will be
subject to customary confidentiality and non-disparagement obligations, as well
as a twelve-month obligation not to solicit clients, customers or employees. In
addition, if his employment is terminated by the Company
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for Cause or by Mr. Chatterjee without Good Reason, he will be subject to a
twelve-month non-competition obligation. If his employment is terminated by the
Company without Cause or by Mr. Chatterjee for Good Reason, Mr. Chatterjee will
be entitled to receive severance equal to the sum of his annual base salary and
annual target bonus, payable in twelve month installments, and accelerated
vesting of his equity awards (except as prohibited by the Plan), in each case,
subject to his execution of a customary release, providing, among other things,
confirmation of his confidentiality, non-disparagement and non-solicitation
obligations.
Board Service
Mr. Chatterjee will not receive any additional compensation for his service on
the Company's Board of Directors.
Other
There are no arrangements or understandings between Mr. Chatterjee and any other
person pursuant to which he was selected as an officer or Director of the
Company. There are no family relationships between Mr. Chatterjee and any
director or executive officer of the Company nor is Mr. Chatterjee party to any
related person transactions, in each case as required to be disclosed under Item
401 or 404 of Regulation S-K.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Effective on January 13, 2020, the Board of Directors of the Company approved
the amendment and restatement of the Company's Second Amended and Restated
Bylaws (as amended and restated, such bylaws are the Company's Third Amended and
Restated Bylaws) to increase the size of the Board of Directors from four to
five and permit the appointment of more than one Chief Executive Officer.
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Item 8.01 Other Events.
On January 13, 2020, the Company issued a press release announcing the hiring of
Mr. Chatterjee and the terms of his inducement equity award. A copy of the press
release is attached as Exhibit 99.1 and incorporated by reference herein.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
3.1 Third Amended and Restated Bylaws (marked to show changes from the
Second Amended and Restated Bylaws).
99.1 Press Release of Altisource Asset Management Corporation dated January
13, 2020.
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