|
Item
5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain Officers; Compensatory Arrangements of Certain
Officers.
|
|
|
(e)
|
Material
Compensatory Plan, Contract or Arrangement with Chief Executive Officer,
Chief Financial Officer, or Named Executive Officer
.
|
Chief
Executive Officer and President
Effective
December 27, 2007, Stamford Industrial Group, Inc., a Delaware corporation
(the
"Company") and Mr. Albert W. Weggeman, the President and Chief Executive Officer
of the Company, agreed to cancel the restricted stock award that was granted
to
Mr. Weggeman pursuant to the terms of his employment agreement dated as of
September 22, 2006, and to issue to Mr. Weggeman a new restricted stock award
pursuant to the Company's 2007 Stock Incentive Plan (the "Plan"). Under the
new
award, Mr. Weggeman shall earn shares of restricted common stock (the
“
Restricted
Stock
”)
on the
following basis: (i) $1,000,000 of Restricted Stock upon the Company
achieving annual earnings before interest, taxes, depreciation and amortization,
and excluding capital gains ("Adjusted EBITDA" as defined in the Plan) as
computed by the Company on or prior to its filing of its annual report on Form
10-K, on a consistent basis, of at least $25,000,000 in a fiscal year of the
Company commencing after fiscal year ended December 31, 2007;
(ii) $1,000,000 of Restricted Stock upon the Company achieving annual
Adjusted EBITDA as computed by the Company on or prior to its filing of its
annual report on Form 10-K, on a consistent basis, of at least $50,000,000
in a
subsequent fiscal year of the Company; and (iii) $1,000,000 of Restricted
Stock upon the Company achieving annual Adjusted EBITDA as computed by the
Company on or prior to its filing of its annual report on Form 10-K, on a
consistent basis, of at least $75,000,000 in a subsequent fiscal year of the
Company.
Each
of
the grants specified in (i)-(iii) above are one-time grants which vest on the
date on which the Company’s Form 10-K is filed in respect of the fiscal year for
which the grant is being made and the grant price will be the closing price
of
the Common Stock of the Company on the principal exchange on which it is traded
on such date.
Also
effective December 27, 2007, the Company and Mr. Weggeman agreed to cancel
non-plan options to purchase 2,491,419 shares of the Company's common stock
at
an exercise price of $0.64 per share
,
which
were granted to Mr. Weggeman pursuant to the terms of his employment agreement
dated as of September 22, 2006,
and
award
to Mr. Weggeman options under the Plan to purchase 2,491,419 shares of
common stock at an exercise price of $1.25 per share, which was the closing
price of the common stock as reported by the OTC Pink Sheet Electronic
Quotation Service on December 27, 2007. Options to purchase
(i) 484,442 shares are immediately vested and exercisable,
(ii) 761,267 shares shall vest and become exercisable in 22 equal
consecutive monthly tranches commencing on January 3, 2008; provided, that,
upon
the occurrence of a Change-of-Control Event as defined in the Plan, the vesting
of such 761,267 shares shall accelerate and they shall automatically vest,
to
the extent not previously vested, immediately prior to the effective time of
such Change-of-Control Event, and (iii) 1,245,710 shares shall vest and
become exercisable upon the occurrence of both of the following
events: (A) the Company's common stock reaching a price of at least
$5.12 per share (subject to adjustment for stock splits and similar events)
for
20 consecutive trading days, and (B) the aggregate amount of Adjusted
EBITDA for any four consecutive calendar quarters, commencing with the calendar
quarter beginning January 1, 2008, being not less than $70,000,000; provided,
that, if the conditions specified in clauses (A) and (B) of this clause (iii)
have not been satisfied on or before the fourth anniversary of the date of
grant
of such options, then the options described in this clause (iii) shall have
lapsed without vesting. The 1,245,710 shares acquirable under clause (iii)
described above may not be sold or otherwise transferred (except on the
death of Mr. Weggeman) prior to December 27, 2011.
Also
effective December 27, 2007, the Company and Mr. Weggeman entered into a
deferred compensation agreement pursuant to which Mr. Weggeman would be entitled
to receive deferred compensation of up to $1,519,766, which may be reduced
if
the stock price at the time of distribution is less than $1.25. The deferred
compensation shall vest on the following basis:
|
|
(i)
|
19.4%
shall be immediately vested;
|
|
|
(ii)
|
30.6%
shall vest in twenty-two equal monthly consecutive tranches commencing
on December 27, 2007, subject to Mr. Weggeman's being employed by the
Company on each vesting date;
|
|
|
(iii)
|
up
to 50.0% shall vest as follows, provided that Mr. Weggeman is actively
employed as of the vesting date:
|
|
|
(A)
|
16.7%
shall vest as of March 31, 2008, if the Company’s Adjusted EBITDA for the
year ending December 31, 2007 (“Year 1”) is not less than $13,800,000
(the “Year 1 Target”); if the Year 1 Target is not achieved, and if the
sum of the Company’s Adjusted EBITDA for the years ending December 31,
2007 and 2008 is not less than the sum of the Year 1 Target plus
the Year
2 Target (as defined below), then the such 16.7% shall vest as of
March
31, 2009;
|
|
|
(B)
|
16.7%
shall vest as of March 31, 2009, if the Company’s Adjusted EBITDA for the
year ending December 31, 2008 (“Year 2”) is not less than $15,700,000
(the “Year 2 Target”); if the Year 2 Target is not achieved, and if the
sum of the Company’s Adjusted EBITDA for the years ending December 31,
2008 and 2009 is not less than the sum of the Year 2 Target plus the Year
3 Target (as defined below), then such 16.7% shall vest as of March
31,
2010;
|
|
|
(C)
|
16.6%
shall vest as of March 31, 2010, if the Company’s Adjusted EBITDA for the
year ending December 31, 2009 (“Year 3”) is not less than $17,200,000
(the “Year 3 Target”); if (i) the Year 3 Target is not achieved, and
(ii) the Company renews the employment agreement of Mr. Weggeman for
another three-year term, and (iii) the sum of the Company’s Adjusted
EBITDA for the years ending December 31, 2009 and 2010 is not less
than
the sum of the Year 3 Target plus the Year 4 Target (as defined
hereinafter), then such 16.6% shall vest as of March 31, 2011. “Year 4
Target” means an amount of the Company’s Adjusted EBITDA for the year
ending December 31, 2010 that will be agreed upon by the parties
in the
renewed employment agreement, if
any.
|
Amounts
vesting on or before October 1, 2009, shall be payable not later than October
31, 2009. Amounts vesting after October 1, 2009, shall be payable promptly
after
vesting. Payments shall be made in cash or in common stock of the Company,
as
determined by the Compensation Committee in its absolute
discretion.
The
Company may accelerate the vesting schedules of any
one or more of the foregoing agreements at any time or times in its
discretion.
The
foregoing descriptions of the provisions of the Restricted Stock Award, Stock
Options, and Deferred Compensation Agreement do not purport to be complete
and
are qualified in their entirety by reference to the Restricted Stock Award
Agreement, the Stock Option Agreement, and the Deferred Compensation Agreement
between the Company and Mr. Weggeman, the forms of which are attached hereto
as
Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, and the
Company's 2007 Stock Incentive Plan, which is filed with the Commission as
Appendix B of the Company's definitive proxy statement filed with the Commission
on May 11, 2007 and incorporated herein by reference.
Chief
Financial Officer
Effective
December 27, 2007, the Company and Mr. Jonathan LaBarre, Chief Financial
Officer of the Company, agreed to cancel options awarded to Mr. LaBarre under
the Company's 1999 Equity Incentive Plan and pursuant to the terms of his
employment agreement dated as of December 1, 2006, to purchase 250,000
shares of the Company's common stock at an exercise price of $2.56 per
share and award to Mr. LaBarre options under the Plan to purchase 250,000
shares of stock at an exercise price of $1.25 per share, which was
the closing price of the common stock in the as reported by the OTC
Pink Sheet Electronic Quotation Service on December 27, 2007. Options to
purchase 125,000 shares vest and become exercisable as follows: 41,666 options
vest immediately; 41,667 options vest on December 1, 2008; and 41,667 options
vest on December 1, 2009;
provided,
that upon the occurrence of a Change-of-Control Event as defined in the Plan,
the vesting of such 83,334 options shall accelerate, and they shall
automatically vest, to the extent not previously vested, immediately prior
to
the effective time of such Change-of-Control Event.
The
other 125,000 options vest and become exercisable upon the occurrence of both
of
the following events: (A) the Company's common stock reaching a price of at
least $5.12 per share (subject to adjustment for stock splits and similar
events) for 20 consecutive trading days, and (B) the aggregate amount of
Adjusted EBITDA for any four consecutive calendar quarters, commencing with
the
calendar quarter beginning January 1, 2008, being not less than
$70,000,000
;
provided, that if the conditions specified in clauses (A) and (B) above have
not
been satisfied on or before the fourth anniversary of the date of grant of
such
options, the options described in this sentence shall have lapsed without
vesting.
The
shares of common stock acquirable on exercise of these options may not be sold
or otherwise transferred (except on the death of Mr. LaBarre) prior to December
27, 2011. The Company may accelerate the vesting schedule at any time or times
in its discretion. The foregoing description of the provisions of the stock
options awarded to Mr. LaBarre does not purport to be complete and is qualified
in its entirety by reference to the Stock Option Agreement between the Company
and Mr. LaBarre, the form of which is included as Exhibit 10.4 to this Current
Report on Form 8-K, and the Company's 2007 Stock Incentive Plan, which is filed
with the Commission as Appendix B of the Company's definitive proxy statement
filed with the Commission on May 11, 2007 and incorporated herein by
reference.