Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(e) Compensatory Arrangements of Certain Officers
On January 25, 2021, the Board of Directors of The Joint Corp. (the "Company"),
upon the recommendation of the Compensation Committee of the Board of Directors
(the "Compensation Committee"), approved an amendment to the Executive
Short-Term Incentive Plan (the "Executive STIP") under which the Company's
President and Chief Executive Officer and its Chief Financial Officer are
eligible to receive compensation in the form of cash on an annual basis.
Under the Executive STIP, budgeted EBITDA will be established by the Board of
Directors of the Company annually. The Executive STIP bonus pool will be
combined with the bonus pool for the Non-Executive Short-Term Incentive Plan
(the "Combined Pool"). The Compensation Committee will establish the maximum
amount that may be allocated to the Combined Pool (the "Combined Pool Maximum"),
and the amount by which actual EBITDA exceeds budgeted EBITDA will be allocated
to the Combined Pool up to the established maximum.
The amendment provides that the Combined Pool will not be funded, and
participants will not receive payment, if the amount allocated to the Combined
Pool for the year in question is less than 85% of the Combined Pool Maximum for
that year (the "Award Threshold"), provided that if the amount allocated to the
Combined Pool is less than the Award Threshold, the Company's Board of Directors
may create a bonus pool under such terms and conditions as it may determine.
If the amount in the Combined Pool meets the Award Threshold, the amount
allocated to the Combined Pool will be paid to the participants in both the
Executive STIP and the Non-Executive Short-Term Incentive Plan on a pro rata
basis based on their respective eligibility, and in each case, up to their
maximum targeted STIP award. The President and CEO's targeted STIP award will
not exceed 50% of his base salary. The CFO's STIP award will not exceed 40% of
his base salary.
Notwithstanding the foregoing, in the event that actual EBITDA for the year in
question after the funding of the Combined Pool Maximum ("Revised EBITDA")
exceeds budgeted EBITDA for that year, the maximum targeted STIP award for the
President and CEO would increase to 62.5% of his base salary, and the maximum
targeted STIP award for the CFO would increase to 50% of his base salary. In
that event, 25% of each dollar by which Revised EBITDA exceeds budgeted EBITDA
will be added to the Combined Pool and allocated to the participants in both the
Executive STIP and the Non-Executive Short-Term Incentive Plan on a pro rata
basis based on their respective eligibility, and in each case, up to their
maximum targeted STIP award, as adjusted.
The foregoing description of the Executive STIP as amended does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Executive STIP, a copy of which is filed as Exhibit 10.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 The Joint Corp. Executive Short-Term Incentive Plan (Amended
January 25, 2021).
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