☐ | Preliminary Proxy Statement |
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MEDLEY MANAGEMENT INC. |
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March 28, 2016
Please join us for Medley Management Inc.’s
In accordance with the Securities and Exchange Commission’s rules allowing companies to furnish proxy materials to their stockholders over the Internet, we have sentare to:
1. | Elect the director nominees listed in the Proxy Statement. |
2. | Ratify the appointment of RSM US LLP as our independent registered public accounting firm for fiscal year 2019. |
3. | Approve an amendment to our 2014 Omnibus Incentive Plan to increase the number of the awards available for issuance thereunder by 4,500,000 to 9,000,000. |
4. | Consider and act upon other matters which may properly come before the meeting or any adjournment(s) or postponement(s) thereof. |
Attached to this letter are a Notice of Annual Meeting of Stockholdersattend, and Proxy Statement, which describe the business to be conductedvote at the meeting.
Annual Meeting.
By Order of the Board of Directors, | ||
/s/ | ||
MEDLEY MANAGEMENT INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
John D. Fredericks | |
John D. Fredericks | |
Secretary | |
By Order of the Board of Directors,
John D. Fredericks
General Counsel and Secretary
May 8, 2019.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY VOTING METHODS
If, at the close of business on March 15, 2016, you were a stockholder of record or held shares through a broker, bank or other nominee, you may vote your shares by proxy through the Internet, by telephone or by mail or you may vote in person at the Annual Meeting. For shares held through a broker, bank or other nominee, you may vote by submitting voting instructions to your broker, bank or other nominee. Please refer to information from your broker, bank or other nominee on how to submit voting instructions. To reduce our administrative costs and help the environment by conserving natural resources, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day. You may revoke your proxies at the times and in the manners described on page 5 of the Proxy Statement.
If you are a stockholder of record or hold shares through a broker, bank or other nominee and are voting by proxy, your vote must be received by 11:59 p.m., Eastern Time, on May 9, 2016 to be counted.
To vote by proxy if you are a stockholder of record:
BY INTERNET
BY TELEPHONE
BY MAIL
AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON. IF YOU DO ATTEND THE MEETING IN PERSONAND WISH TO VOTE YOUR VOTE IS IMPORTANTSHARES PERSONALLY, YOU MAY REVOKE YOUR PROXY AT OR PRIOR TO US. THANK YOU FOR VOTING.
Page | |
STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING | |
HOUSEHOLDING OF PROXY MATERIALS | |
OTHER BUSINESS |
Why am I being provided with these materials?
We have made our29, 2019
Why did I receive a one-page Notice Regarding the Availability of Proxy Materials in the mail regarding theperson. You may also vote your shares by Internet, availability of proxy materials instead of a full set of proxy materials?
Pursuant to the rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide shareholders access to our proxy materials over the Internet. We believe that the e-proxy process will expedite our stockholders’ receipt of proxy materials, lower the costs of distribution and reduce the environmental impact of our Annual Meeting. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) ontelephone or about March 28, 2016 to stockholders of record entitled to vote at the Annual Meeting. All stockholders will have the ability to access the proxy materials atwww.proxyvote.com to download printable versions of the proxy materials or to request and receive a printed set of the proxy materials from us. Instructions on how to access the proxy materials over the Internet or to request a printed copy from us may be found on the Notice.
mail.
As of the Record Date, there were 5,777,7265,817,298 shares of our Class A common stock outstanding that will carry an aggregate of 5,777,7265,817,298 votes and 100 shares of our Class B common stock outstanding that will carry an aggregate of 233,333,330244,153,023 votes (i.e., a number of votes that is equal to 10 times the number of outstanding LLC Units, not including the 5,777,7265,817,298 LLC Units held by Medley Management Inc.)Medley). As of the Record Date, Medley Group LLC, an entity wholly owned by our pre-IPO owners, held all 100 issued and outstanding shares of our Class B common stock.
How are votes counted?
Proposal No. 2. Brokers may not vote shares with respect to Proposal No. 3 in the absence of stockholder instructions and such broker non-votes will have no effect on the outcome of Proposal No. 3.
Our
28, 2019.
28, 2019.
What does it mean if I receive more than one Notice on or about the same time?
It generally means you hold shares registered in more than one account. To ensure that all your shares are voted, please sign and return each proxy card or, if you vote by Internet or telephone, vote once for each Notice of Internet Availability you receive.
If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted a proxy card, the persons named in your proxy card will have the discretion to vote on those matters for you.
Our
Philip K. Ryan
Philip K. Ryan, 59, has been a member of the Board of Directors since September 2014. Mr. Ryan has served on the board of directors of Swiss Re Americas Holding Corporation since 2010 and as Chairman since 2012. Mr. Ryan joined the Board of Directors of Swiss Re Ltd, the parent company, in April 2015. He has also been an Adjunct Professor at the NYU Stern School of Business since 2013. Mr. Ryan served as Executive Vice President and Chief Financial Officer of Power Corporation of Canada and Power Financial Corporation in Montreal from January 2008 to May 2012 and in that capacity served on the board and committees of IGM Financial, Great West Lifeco and several of their subsidiaries, including Putnam Investments. Prior to that Mr. Ryan served as an officer of Credit Suisse Group in New York, London and Zurich from 1985 to 2008 in a variety of roles, including Chairman of the Financial Institutions Group (UK), Chief Financial Officer of Credit Suisse Group (Switzerland), Chief Financial Officer of Credit Suisse Asset Management (UK) and Managing Director of CSFB Financial Institutions Group (USA/UK). Mr. Ryan is also engaged in a number of charitable activities including the Smithsonian National Board. Mr. Ryan received a B.S. from the University of Illinois School of Engineering and an M.B.A. from the Indiana University Kelly Graduate School of Business.
Law.
Our Board manages or directs our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board and three standing committees: the Audit Committee,Committee; the Compensation CommitteeCommittee; and the Corporate Governance and Nominating Committee. Prior to our initial public offering in September 2014 (the “IPO”), our pre-IPO owners beneficially owned 100% of our Company. In connection with the IPO, these pre-IPO owners became members of Medley Group LLC, which holds shares of our Class B common stock entitling it to 97.6%97.7% of the voting power of our common stock eligible to vote in the election of directors. As a result, we are a “controlled company” within the meaning of the NYSE corporate governance standards and utilize the exemptions from certain corporate governance standards, including the requirement that a majority of our boardthe Board of directorsDirectors consist of independent directors and the requirement that we have a compensation committee and a nominating and corporate governance committee that is each composed entirely of independent directors. However, since the IPO, we have had a fully independent Audit Committee and independent director representation on each of our Compensation Committee and our Corporate Governance and Nominating Committee, and each such committee is chaired by an independent director.
Listed Company Manual.
Our
The Board does not have a policy on whether or not the roles of the Chief Executive Officer and Chairman should be separate. The Board evaluates relevant factors and determines the best leadership structure for the Company’s operating and governance environment at the time. The Board believes that having combined Co-Chairmen and Co-Chief Executive Officers is the appropriate leadership structure for the Company at this time. As the Co-Chairmen and Co-Chief Executive Officers, Messrs. Brook and Seth Taube are able to draw on their knowledge and expertise related to the Company’s daily operations, industry and competitive developments to set the agenda for the Board and ensure the appropriate focus on issues of concern to the Company. Furthermore, the Board believes that combining these roles enables decisive leadership, ensures clear accountability and facilitates information flow between management and the Board, all of which are essential to effective governance. The Board has not formally designated a lead independent director.
Family Relationships of Directors and Executive Officers
Messrs. Brook and Seth Taube, each a Co-Chief Executive Officer and Co-Chairman of the Board of Directors, are brothers. There are no other family relationships among any of our directors or executive officers.
Chairman should be separate. The Board evaluates relevant factors and determines the best leadership structure for the Company’s operating and governance environment at the time. The Board believes that having combined Co-Chairmen and Co-Chief Executive Officers is the appropriate leadership structure for the Company at this time. As the Co-Chairmen and Co-Chief Executive Officers, Mr. Brook Taube and Mr. Seth Taube are able to draw on their knowledge and expertise related to the Company’s daily operations, industry and competitive developments to set the agenda for the Board and ensure the appropriate focus on issues of concern to the Company. Furthermore, the Board believes that combining these roles enables decisive leadership, ensures clear accountability and facilitates information flow between management and the Board, all of which are essential to effective governance. The Board has not formally designated a lead independent director.
Audit Committee | Compensation Committee | Corporate Governance and Nominating Committee | ||||
Brook Taube | X | X | ||||
Seth Taube | X | X | ||||
Jeffrey T. Leeds | Chair | |||||
Guy T. Rounsaville, Jr. | X | Chair | ||||
Jeffrey Tonkel |
stockholders in 2018.
The duties and responsibilities of the Audit Committee are set forth in its charter, which may be found atwww.mdly.com under Investor Relations: Corporate Governance: Committee Charters: Audit, and include among duties and responsibilities:
incorporation.
OurThe Board of Directors believes that this role in risk oversight is appropriate. We believe that we have robust internal processes in place and a strong internal control environment to identify and manage risks. However, not all risks that may affect us can be identified or eliminated and some risks are beyond the control of us and our service providers.
East, New York, New York 10017.
We
Director Compensation for 2015
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | Total Number of Outstanding Unvested Equity Awards (#)(3) | |||||||||||||||
Jeffrey T. Leeds | — | $ | 70,000 | — | $ | 70,000 | 11,570 | |||||||||||||
Guy Rounsaville, Jr. | $ | 35,000 | $ | 35,000 | — | $ | 70,000 | 5,785 | ||||||||||||
Philip K. Ryan | — | $ | 85,000 | — | $ | 85,000 | 14,049 |
(1) Represents the annual cash retainer earned for services rendered in 2015.
(2) Represents the aggregate grant date fair value of the RSU awards computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718.
(3) Represents the aggregate number of unvested RSUs held by each non-employee director as of the fiscal year end.
2018.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | Total Number of Outstanding Unvested Equity Awards (#)(4) | |||||||||||||
Jeffrey T. Leeds | — | $ | 85,000 | $165,000 | $ | 250,000 | $ | 23,944 | ||||||||||
Guy T. Rounsaville, Jr. | $ | 35,000 | $ | 35,000 | $110,000 | $ | 180,000 | $ | 9,860 | |||||||||
James G. Eaton | — | $ | 70,000 | $110,000 | $ | 180,000 | $ | 19,719 |
(1) | Represents the annual cash retainer earned for services rendered in 2018. |
(2) | Represents the aggregate grant date fair value of the RSU awards computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. |
(3) | Represents fees for serving on the Medley Special Committee which was established in connection with the Company’s pending merger with Sierra. |
(4) | Represents the aggregate number of unvested RSUs held by each non-employee director as of the fiscal year end. |
Name | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||
Brook Taube | 2018 | — | — | — | — | — | — | $ | 49,661 | $ | 49,661 | |||||||||||||||||
Co-Chief Executive Officer | 2017 | — | — | — | — | — | — | $ | 38,686 | $ | 38,686 | |||||||||||||||||
Seth Taube | 2018 | — | — | — | — | — | — | $ | 52,719 | $ | 52,719 | |||||||||||||||||
Co-Chief Executive Officer | 2017 | — | — | — | — | — | — | $ | 39,195 | $ | 39,195 | |||||||||||||||||
Jeffrey Tonkel | 2018 | — | — | — | — | — | — | $ | 47,645 | $ | 47,645 | |||||||||||||||||
President | 2017 | $ | 225,000 | — | — | — | — | — | $ | 36,671 | $ | 261,671 | ||||||||||||||||
Richard T. Allorto, Jr. | 2018 | $ | 300,000 | — | $ | 1,065,170 | — | — | — | $ | 50,044 | $ | 1,415,214 | |||||||||||||||
Chief Financial Officer | 2017 | $ | 300,000 | — | $ | 583,500 | — | — | — | $ | 38,605 | $ | 922,105 | |||||||||||||||
John D. Fredericks | 2018 | $ | 300,000 | $ | 668,169 | $ | 810,111 | — | — | — | $ | 54,022 | $ | 1,832,302 | ||||||||||||||
General Counsel and Secretary | 2017 | $ | 300,000 | — | $ | 583,500 | — | — | — | $ | 39,832 | $ | 923,332 |
(1) | Amounts reported under Salary include guaranteed cash distributions made on membership interests in Medley LLC owned directly or indirectly by our named executive officers. During the years ended December 31, 2018 and 2017, neither Mr. Brook Taube nor Mr. Seth Taube received any guaranteed payments. Mr. Tonkel did not receive any guaranteed payments during the year ended December 31, 2018. During the period from January 1, 2017 to September 31, 2017, Mr. Tonkel received a $25,000 monthly cash payment, included under Salary in the Summary Compensation Table. Mr. Tonkel elected not to receive any guaranteed payments during the three months ended December 31, 2017. In addition, we pay to each of Mr. Allorto and Mr. Fredericks a $25,000 monthly cash payment, included under Salary in the Summary Compensation Table. |
(2) | Amounts reported under Stock Awards for the year 2018 consist of restricted LLC Units granted in March and May 2018 for services rendered in 2017. Amounts reported under Stock Awards for the year 2017 consist of restricted LLC Units granted in February 2017 for services rendered in 2016. The restricted LLC Units are included at their grant date fair market value which was computed in accordance with FASB ASC Topic 718. |
(3) | Amounts reported under All Other Compensation include Company-paid executive health insurance, Company 401(k) contributions, Company-paid life insurance premiums, Company-reimbursed commuting expenses and Company-paid professional dues. |
Option awards | Stock awards (1) | ||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option exercise date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market payout value of unearned shares, units or other rights that have not vested ($) | ||||||||||
Brook Taube | — | — | — | — | — | — | — | — | — | ||||||||||
Seth Taube | — | — | — | — | — | — | — | — | — | ||||||||||
Jeffrey Tonkel | — | — | — | — | — | — | — | — | — | ||||||||||
Richard T. Allorto, Jr. | — | — | — | — | — | 298,000 | $ | 1,150,280 | — | — | |||||||||
John D. Fredericks | — | — | — | — | — | 258,333 | $ | 997,165 | — | — |
(1) | Stock awards consist of restricted LLC Units of 216,333 granted on May 11, 2018, 140,000 granted on March 28, 2018, 100,000 granted on February 22, 2017 and 100,000 granted on March 17, 2016. Of the 216,333 awards granted on May 11, 2018, 158,000 will vest only upon (i) the participant’s termination without cause in connection with a change in control or (ii) provided the participant has not undergone a termination from service prior thereto, upon (a) the occurrence of a change in control or (b) death or disability of the participant. The remainder of the awards vest in three equal annual installments on each of the third, fourth and fifth anniversaries of the grant date, subject to the executive’s continued employment on the applicable vesting date. The market value of the RSUs was computed using Medley’s closing price of $3.86 per share as of December 31, 2018. |
Carried Interest Percentages Awarded | ||||||||
Named Executive Officer | Medley Real D (Annuity) LLC | Medley Tactical Opportunities LLC | Medley Chiller Holdings LLC | Caddo Investors Holdings 1 LLC | ||||
Brook Taube | 3.9% | 3.1% | 3.7% | 3.3% | ||||
Seth Taube | 3.9% | 3.1% | 3.7% | 3.3% | ||||
Jeffrey Tonkel | 3.9% | 3.1% | 3.7% | 3.3% | ||||
Richard T. Allorto, Jr. | 5.9% | 4.6% | 5.6% | 4.9% | ||||
John D. Fredericks | 5.9% | 4.6% | 5.6% | 4.9% |
Class A Common Stock Beneficially Owned(1) | LLC Units Beneficially Owned(1)(2) | Class B Common Stock Beneficially Owned(2) | Combined Voting Power(2)(3) | ||||||||||||||
Name of Beneficial Owner | Number | % | Number | % | Number | % | |||||||||||
Medley Group LLC(2) 280 Park Avenue, 6th Floor East, New York, NY 10017 | — | — | — | — | 100 | 97.7 | % | ||||||||||
JAM Partners, L.P.(4) 11 East 26th Street, Suite 1900, New York, NY 10010 | 626,054 | 10.8 | % | — | — | — | * | ||||||||||
American Financial Group, Inc.(5) Great American Insurance Tower 301 East Fourth Street, Cincinnati, OH 45202 | 579,100 | 10.0 | % | — | — | — | * | ||||||||||
Springhouse Capital (Master), L.P.(6) 18 Burr Farms Road, Westport, CT 06880 | 561,322 | 9.6 | % | — | — | — | * | ||||||||||
Weiss Asset Management LP(7) 222 Berkeley Street, 16th Floor, Boston, MA 02116 | 482,050 | 8.3 | % | — | — | — | * | ||||||||||
Named Executive Officers and Directors | |||||||||||||||||
Brook Taube(2)(8) | — | — | 10,000,000 | 34.3 | % | 100 | 97.7 | % | |||||||||
Seth Taube(2)(9) | 264,681 | 4.5 | % | 10,000,000 | 34.3 | % | 100 | 97.7 | % | ||||||||
Jeffrey Tonkel | — | — | 1,818,182 | 6.2 | % | — | — | ||||||||||
Richard T. Allorto, Jr. | — | — | 825,061 | 2.7 | % | — | — | ||||||||||
John D. Fredericks | — | — | 482,363 | 1.6 | % | — | — | ||||||||||
James G. Eaton(10) | 12,548 | * | — | — | — | — | |||||||||||
Jeffrey T. Leeds(11) | 34,123 | * | — | — | — | — | |||||||||||
Guy T. Rounsaville, Jr.(12) | 15,271 | * | — | — | — | — | |||||||||||
Directors and executive officers as a group (8 persons)(2) | 326,623 | 5.6 | % | 23,125,606 | 76.5 | % | 100 | 97.7 | % |
(1) | Subject to the terms of the exchange agreement, the LLC Units are exchangeable for shares of our Class A common stock on a one-for-one basis. See “Transactions with Related Parties - Exchange Agreement.” Beneficial ownership of LLC Units reflected in this table does not include beneficial ownership of shares of our Class A common stock for which such LLC Units may be exchanged. Percentage of our Class A common stock beneficially owned as reflected in this table is based on 5,817,298 shares of our Class A common stock outstanding as of April 24, 2019. Percentage of LLC Units beneficially owned as reflected in this table treats LLC Units held by the Company as outstanding. |
(2) | Holders of our Class B common stock are entitled to a number of votes that is equal to 10 times the number of LLC Units held by such holder, regardless of the number of shares of our Class B common stock held by such holder. Medley Group LLC, an entity wholly-owned by our pre-IPO owners, holds all 100 issued and outstanding shares of our Class B common stock, and our Class B common stock provides Medley Group LLC with a number of votes that is equal to 10 times the aggregate number of LLC Units held by all non-managing members of Medley LLC. As of April 24, 2019, the non-managing members of Medley LLC held 24,415,302 LLC Units entitling Medley Group LLC to 244,153,020 votes. Mr. Brook Taube and Mr. Seth Taube may be deemed to have beneficial ownership of the shares of our Class B common stock held by Medley Group LLC. |
(3) | Represents percentage of voting power of our Class A common stock and our Class B common stock voting together as a single class, based upon an aggregate of 5,817,298 shares of our Class A common stock outstanding as of April 24, 2019, which carry a total of 5,817,298 votes, and 100 shares of our Class B common stock outstanding as of April 24, 2019, which carry a total of 244,153,020 votes. |
(4) | According to the Form 4 filed on April 22, 2019 by JAM Partners, L.P. and certain of its affiliates (collectively, “JAM Partners”), JAM Partners has shared voting and shared dispositive power over 626,054 shares of our Class A common stock. |
(5) | According to the Schedule 13G filed on January 25, 2019 by American Financial Group, Inc. (“American Financial”), American Financial has sole voting and sole dispositive power over 579,100 shares of our Class A common stock. |
(6) | According to the Schedule 13G filed on February 14, 2019 by Springhouse Capital (Master), L.P. and certain of its affiliates (collectively, “Springhouse”), Springhouse has shared voting and shared dispositive power over 561,322 shares of our Class A common stock. |
(7) | According to the Schedule 13G filed on February 14, 2019 by Weiss Asset Management LP and certain of its affiliates (collectively, “Weiss”), Weiss has shared voting and shared dispositive power over 482,050 shares of our Class A common stock. |
(8) | Includes 1,818,182 LLC Units owned by B. Taube 2014 Associates, LLC and 8,181,818 LLC Units owned by the Brook Taube Trust. |
(9) | Includes 264,681 shares of our Class A common stock held by The Seth and Angie Foundation, 909,091 LLC Units owned by A. Taube 2014 Associates, LLC, 909,091 LLC Units owned by S. Taube 2014 Associates and 8,181,818 LLC Units owned by The Seth and Angie Taube Trust. |
(10) | Includes 19,719 shares of our Class A common stock underlying restricted stock units that vest on May 10, 2019. |
(11) | Includes 23,944 shares of our Class A common stock underlying restricted stock units that vest on May 10, 2019. |
(12) | Includes 9,860 shares of our Class A common stock underlying restricted stock units that vest on May 10, 2019. |
fiscal year 2019.
2015 | 2014 | |||||||
Audit fees(1) | $ | 470,000 | $ | 538,701 | ||||
Audit-related fees(2) | — | $ | 669,500 | |||||
Tax fees(3) | $ | 18,500 | $ | 124,395 | ||||
All other fees(4) | — | — | ||||||
Total | $ | 488,500 | $ | 1,332,596 |
2018 | 2017 | ||||||
Audit fees(1) | $ | 776,036 | $ | 726,246 | |||
Audit-related fees(2) | — | — | |||||
Tax fees(3) | — | — | |||||
All other fees(4) | — | — | |||||
Total | $ | 776,036 | $ | 726,246 |
(1) Amounts reported under Audit fees include professional services rendered for the audits of our annual financial statements and reviews of our quarterly financial statements.
(2) Amounts reported under Audit-related fees include reviews of registration statements filed with the SEC in 2014.
(3) Amounts reported under Tax fees include professional services rendered for tax return compliance, including review of partner capital accounts, and consultations related to technical interpretations, applicable laws and regulations and tax accounting.
(4) All other fees encompasses any services provided by the independent registered public accounting firm other than services reported in the other above categories. There were no such fees in 2015 and 2014.
(1) | Amounts reported under Audit fees include professional services rendered for the audits of our annual financial statements and reviews of our quarterly financial statements. This category also includes fees for professional services rendered in connection with the quarterly reviews and year-end audit of Medley LLC’s consolidated financial statements as well as customary services that only the independent auditor reasonably can provide such as consents and assistance with, and review of, other documents filed with the SEC. |
(2) | Amounts reported under Audit-related fees include assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the registrant’s financial statements and are not reported under audit fees. There were no such fees in 2018 and 2017. |
(3) | Amounts reported under Tax fees include professional services rendered for tax return compliance and consultations related to technical interpretations, applicable laws and regulations and tax accounting. There were no such fees in 2018 or 2017. |
(4) | All other fees encompasses any services provided by the independent registered public accounting firm other than services reported in the other above categories. There were no such fees in 2018 and 2017. |
YOUR
The Audit Committee operates pursuantawards available for issuance thereunder from 4,500,000 to a charter,9,000,000 (which may be issued as shares of our Class A common stock or LLC Units), which is reviewed annuallywas adopted by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under the discussion of “The Board of Directors on April 1, 2019, subject to the approval by our stockholders. We do not have a sufficient number of awards available for issuance to our participant base, both for future awards that we may issue and Certain Governance Matters—Committee Membership—Audit Committee.” Our management is responsible for awards that the preparation, presentation and integrity of our financial statements,Board, upon the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States.
In the performance of its oversight function, the Audit Committee reviewed and discussed the audited financial statements and internal control over financial reportingrecommendation of the Company with management and withCompensation Committee, has granted to participants subject to this increase to the independent registered public accounting firm. The Audit Committee also discussed withnumber of awards available under the independent registered public accounting firm the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committee.” In addition, the Audit Committee received the written disclosures and the letters from the independent registered public accounting firm required by applicable requirementsIncentive Plan. Approval of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence.
Based upon the review and discussions described in the preceding paragraph, our Audit Committee recommendedamendment to the Board that the audited financial statements of the Company be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Philip K. Ryan, Chair
Jeffrey T. Leeds
Guy Rounsaville, Jr.
Emerging Growth Company Status
We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, also known as the JOBS Act. As a result, we are permittedIncentive Plan is intended to and rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have not included a compensation discussion and analysis of our executive compensation programs and have not included tabular compensation information other than the Summary Compensation Table. However, in the interest of providing more fulsome disclosure, we have included compensation information for our Co-Chief Executive Officers, our Chief Financial Officer and our two next most highly compensated executive officers serving at the end of the fiscal year (collectively referred to herein as our “named executive officers”).
In addition to the foregoing described reduced compensation disclosure, for so long as we are an emerging growth company, we will not be required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachute” compensation. We will remain an emerging growth company until the earliest to occur of: (i) December 31, 2019; (ii) the first fiscal year after our annual gross revenues are $1.0 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which we become a “large accelerated filer,” which meansensure that we have been publicsufficient awards available for at least 12 months, have filed at least one annual report and the market value of our voting and non-voting common equity held by non-affiliates exceeds $700 million as of the last day of our then most recently completed second fiscal quarter.
Our named executive officers for 2015 are:
The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of our named executive officers for the fiscal years indicated.
Name | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(2) | Total ($) | |||||||||||||||||||||||||
Brook Taube | 2015 | — | — | — | — | — | — | $ | 40,884 | $ | 40,884 | |||||||||||||||||||||||
Co-Chief Executive Officer | 2014 | $ | 1,125,000 | — | — | — | — | — | $ | 44,484 | $ | 1,169,484 | ||||||||||||||||||||||
Seth Taube | 2015 | — | — | — | — | — | — | $ | 46,376 | $ | 46,376 | |||||||||||||||||||||||
Co-Chief Executive Officer | 2014 | $ | 1,125,000 | — | — | — | — | — | $ | 42,703 | $ | 1,167,703 | ||||||||||||||||||||||
Jeffrey Tonkel | 2015 | $ | 300,000 | — | — | — | — | — | $ | 38,872 | $ | 338,872 | ||||||||||||||||||||||
President | 2014 | $ | 300,000 | — | — | — | — | — | $ | 38,123 | $ | 338,123 | ||||||||||||||||||||||
Richard T. Allorto, Jr. | 2015 | $ | 300,000 | — | — | — | — | — | $ | 41,715 | $ | 341,715 | ||||||||||||||||||||||
Chief Financial Officer | 2014 | $ | 300,000 | — | — | — | — | — | $ | 38,253 | $ | 338,253 | ||||||||||||||||||||||
John D. Fredericks | 2015 | $ | 300,000 | — | — | — | — | — | $ | 43,114 | $ | 343.114 | ||||||||||||||||||||||
General Counsel and Secretary | 2014 | $ | 300,000 | — | — | — | — | — | $ | 39,543 | $ | 339,543 |
(1) Amounts reported under Salary include guaranteed cash distributions made on membership interests in Medley LLC owned directly or indirectly by our named executive officers.During the year ended December 31, 2015, neither of Messrs. Brook and Seth Taube received any guaranteed payments.
(2) Amounts reported under All Other Compensation include Company-paid executive health insurance, Company matching 401(k) contributions, Company-paid life insurance premiums, Company-reimbursed commuting expenses and Company-paid professional dues.
Outstanding Equity Awards at 2015 Fiscal Year End
Our named executive officers had no outstanding equity awards as of December 31, 2015.
Narrative Disclosure to Summary Compensation Table
Our named executive officers are generally compensated through a combination of annual guaranteed distributions on membership interests and annual discretionary bonuses in the form of cash, equity-based awards and/or profit interests in our advisor entities.
Guaranteed Distributions on Membership Interests
Each of our named executive officers owns, directly or indirectly, membership interests in Medley LLC. The payments to our Co-Chief Executive Officers, Brook and Seth Taube are periodically set subject to maximums based on our total assets under management. During the year ended December 31, 2015, neither of our Co-Chief Executive Officers received any guaranteed payments. This is expected to continue through December 31, 2016. In addition, we pay to each of Messrs. Tonkel, Allorto and Fredericks a $25,000 monthly cash payment.
As a condition to receiving membership interests in Medley LLC, each executive was required to become party to the limited liability company agreement of Medley LLC. The limited liability company agreement of Medley LLC, the unit award agreements evidencing such membership interests and the agreement described above relating to guaranteed payments, generally govern the rights and obligations of the executives.
Annual Discretionary Bonus
In March 2016, each of Messrs. Allorto and Fredericks was awarded an annual discretionary bonus for services rendered in 2015, which consisted of (1) 50,000 RSUs grantedissuance under the Incentive Plan and (2) the right to receive cash-settled carried interest payments in an amount tiedprovide incentives to the performance of one of our funds. The RSUs vest in three equal annual installments on eachparticipant base.
Restrictive Covenants
Under the terms of their respective confidentiality, non-interference and invention assignment agreements, each of the named executive officers is subject to covenants restricting his (i) use and disclosure of confidential information while employed and at all times thereafter, (ii) ability to engage in any business activities that directly or indirectly competes with us while employed and for six months thereafter and (iii) solicitation of our employees and consultants while employed and for twelve months thereafter and solicitation of our customers and clients while employed and for six months thereafter.
Retirement Plan
We maintain a qualified contributory retirement plan that is intended to qualify as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code (the “Code”). The plan covers all employees, including our named executive officers, who may contribute up to 96% of their eligible compensation, subject to statutory limits imposed by the Code. We are also permitted to provide for, but we currently do not provide any, matching contributions. In addition, the Company makes nonelective contributions under the 401(k) plan equal to 3% of each employee’s eligible earnings, subject to statutory limits imposed by the Code.
Compensation Committee Interlocks and Insider Participation
During the 2015 fiscal year, the members of our Compensation Committee were Mr. Leeds, Mr. Brook Taube (our Co-Chief Executive Officer) and Mr. Seth Taube (our Co-Chief Executive Officer). None of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.
The following table sets forth information regarding the beneficial ownership ofpurchase shares of our common stock under the Incentive Plan to recipients and of LLC Units as of March 15, 2016 by (1) each person known to us to beneficially own more than 5%us. This summary of the outstanding voting securitiesIncentive Plan is qualified entirely by reference to the complete text of Medley Management Inc., (2) eachthe Incentive Plan, amended as contemplated by Proposal No. 3, a copy of which is attached to this Proxy Statement as
Class A | LLC Units | Class B | Combined | |||||||||||||||||||||
Name of Beneficial Owner | Number | % | Number | % | Number | % | ||||||||||||||||||
Medley Group LLC(2) 280 Park Avenue 6 Floor East New York, NY 10152 | — | — | — | — | 100 | 97.6 | % | |||||||||||||||||
Wells Fargo & Company(4) 420 Montgomery Street San Francisco, CA 94104 | 1,018,183 | 17.6 | % | — | — | — | * | |||||||||||||||||
Mangrove Partners(5) 645 Madison Avenue 14th floor New York, NY 10022 | 658,178 | 11.4 | % | — | — | — | * | |||||||||||||||||
Brown Advisory Incorporated(6) 901 South Bond Street Suite 400 Baltimore, MD 21231 | 611,826 | 10.6 | % | — | — | — | * | |||||||||||||||||
American Financial Group Inc.(7) Great American Insurance Tower 301 East Fourth Street Cincinnati, OH 45202 | 579,100 | 10.0 | % | — | — | — | * | |||||||||||||||||
Royce & Associates, LLC(8) 745 Fifth Avenue New York, NY 10151 | 503,600 | 8.7 | % | — | — | — | * | |||||||||||||||||
BlackRock, Inc.(9) 55 East 52nd Street New York, NY 10022 | 384,486 | 6.7 | % | — | — | — | * | |||||||||||||||||
Named Executive Officers and Directors | ||||||||||||||||||||||||
Brook Taube(2)(10) | — | — | 10,000,000 | 34.4 | % | 100 | 97.6 | % | ||||||||||||||||
Seth Taube(2)(11) | 133,491 | 2.3 | % | 10,000,000 | 34.4 | % | 100 | 97.6 | % | |||||||||||||||
Jeffrey Tonkel | — | — | 1,818,182 | 6.2 | % | — | — | |||||||||||||||||
Richard T. Allorto, Jr. | — | — | 606,061 | 2.1 | % | — | — | |||||||||||||||||
John D. Fredericks | — | — | 303,030 | 1.0 | % | — | — | |||||||||||||||||
Jeffrey T. Leeds | 3,888 | * | — | — | — | — | ||||||||||||||||||
Guy Rounsaville, Jr. | 1,944 | * | — | — | — | — | ||||||||||||||||||
Philip K. Ryan | 7,814 | * | — | — | — | * | ||||||||||||||||||
Directors and executive officers as a group (8 persons) (2) | 147,137 | 2.5 | % | 22,727,273 | 78.1 | % | 100 | 97.6 | % |
_____________________
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires executive officers and directors, a company’s chief accounting officer and persons who beneficially own more than 10% of a company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC and the NYSE. Executive officers, directors, the chief accounting officer and beneficial owners with more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of copies of such reports and written representations from our executive officers and directors, we believe that our executive officers and directors complied with all Section 16(a) filing requirements during 2015.
Transactions with Related Persons
Statement of Policy Regarding Transactions with Related Persons
Our Board of Directors recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board of Directors has adopted a written policy on transactions with related persons that is in conformity with the requirements for issuers having publicly-held common stock that is listed on the NYSE.
Our related person policy requires that a “related person” (as defined as in Item 404(a) of Regulation S-K) must promptly disclose to our General Counsel any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The General Counsel will then promptly communicate that information to our Board. No related person transaction will be executed without the approval or ratification of our Board or a duly authorized committee of the Board. It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest
Exchange Agreement
In September 2014, we entered into an exchange agreement with the holders of LLC Units pursuant to which each holder of LLC Units (and certain permitted transferees thereof) may, from and after the first anniversary of the date of the IPO (subject to the terms of the exchange agreement) exchange their LLC Units for sharesIncentive Plan. Unless otherwise expressly provided in the Incentive Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Incentive Plan or any award or any documents evidencing awards granted pursuant to the Incentive Plan are within the sole discretion of Class A common stockthe Committee, may be made at any time and are final, conclusive and binding upon all persons or entities, including, without limitation, us, any participant, any holder or beneficiary of Medley Management Inc. on a one-for-one basis, subjectany award, and any of our stockholders.
Registration Rights Agreement
In September 2014, we entered into a registration rights agreement with our pre-IPO owners pursuant to which we will grant them, their affiliates and certain of their transferees the right, under certain circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of Class A common stock delivered in exchange for LLC Units. Under the registration rights agreement, we have agreed to register the exchange of LLC Units for shares of Class A common stock by our pre-IPO owners. In addition, Medley Group LLC, an entity wholly-owned by our pre-IPO owners, will have the right to request that we register the sale of shares of Class A common stock held by our pre-IPO owners an unlimitedor LLC Units (collectively, “Interests”) that may be issued under the Incentive Plan is 4,500,000 (or 9,000,000 upon stockholder approval of this Proposal No. 3). Of this amount, the maximum number of times andInterests for which incentive stock options may require usbe granted is 4,500,000; the maximum number of Interests for which options or stock appreciation rights may be granted to make available shelf registration statements permitting salesany individual participant during any single fiscal year is 4,500,000; the maximum number of Interests for which performance compensation awards denominated in shares may be granted to any individual participant in respect of a single fiscal year is 2,250,000 (or if any such awards are settled in cash, the maximum amount may not exceed the fair market value of such shares on the last day of the performance period to which such award relates); the maximum number of shares of Class A common stock intogranted during a single fiscal year to any
Tax Receivable Agreement
Holders of LLC Units (other than Medley Management Inc.) may, subject to certain conditions, from and after the first anniversary of the date of the completion of the IPO (subject to the terms of the exchange agreement), exchange their LLC Units for shares of Class A common stock of Medley Management Inc. on a one-for-one basis. Medley LLC intends to make an election under Section 754 of the Code effective for each taxable year in which an exchange of LLC Units for shares of Class A common stock occurs, which is expected to result in increases to the tax basis of the assets of Medley LLC at the time of an exchange of LLC Units. The exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Medley LLC. These increases in tax basis may reduce the amount of tax that Medley Management Inc. would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The IRS may challenge all or part of the tax basis increase and increased deductions, and a court could sustain such a challenge.
In September 2014, we entered into a tax receivable agreement with the holders of LLC Units that provides for the payment by Medley Management Inc. to exchanging holders of LLC Units of 85% of the benefits, if any, that Medley Management Inc. is deemed to realizeaward, including as a result of these increases in tax basis and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. This payment obligation is an obligation of Medley Management Inc. and not of Medley LLC. Medley Management Inc. expects to benefit from the remaining 15% of cash tax savings, if any, in income tax it realizes. For purposesnet settlement of the tax receivable agreement, the cash tax savings in income tax will be computed by comparing the actual income tax liability of Medley Management Inc. (calculated with certain assumptions) to the amount of such taxes that Medley Management Inc. would have been required to pay had there been no increase to the tax basis of the assets of Medley LLCaward or as a result of the exchanges and had Medley Management Inc. not entered intoaward being settled in cash, the tax receivable agreement. The termundelivered Interests may be granted again under the Incentive Plan, unless the Interests are surrendered after the termination of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless Medley Management Inc. exercises its right to terminate the tax receivable agreement for an amount based on the agreed payments remaining to be madeIncentive Plan, and only if stockholder approval is not required under the agreement (as described in more detail below) or Medley Management Inc. breaches any of its material obligations under the tax receivable agreement in which case all obligations generally will be accelerated and due as if Medley Management Inc. had exercised its right to terminate the tax receivable agreement. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including:
We anticipate that we will account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from future exchanges as follows:
All of the effects of changes in any of our estimates after the datethen-applicable rules of the exchange will be included in net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income.
We expect that as a result of the size of the increases in the tax basis of the tangible and intangible assets of Medley LLC, the payments that we may make under the tax receivable agreement will be substantial. There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the tax receivable agreement exceed the actual cash tax savings that Medley Management Inc. realizes in respect of the tax attributes subject to the tax receivable agreement and/or distributions to Medley Management Inc. by Medley LLC are not sufficient to permit Medley Management Inc. to make payments under the tax receivable agreement after it has paid taxes. Late payments under the tax receivable agreement generally will accrue interest at an uncapped rate equal to LIBOR plus 500 basis points. The payments under the tax receivable agreement are not conditioned upon continued ownership of us by holders of LLC Units.
In addition, the tax receivable agreement provides that upon certain changes of control, Medley Management Inc.’s (or its successor’s) obligations with respect to exchanged or acquired LLC Units (whether exchanged or acquired before or after such transaction) would be based on certain assumptions, including Medley Management Inc. would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement.
Furthermore, Medley Management Inc. may elect to terminate the tax receivable agreement early by making an immediate payment equal to the present value of the anticipated future cash tax savings. In determining such anticipated future cash tax savings, the tax receivable agreement includes several assumptions, including (i) that any LLC Units that have not been exchanged are deemed exchanged for the market value ofwhich the shares of Class A common stock are listed. Awards may, in the sole discretion of the Committee, be granted in assumption of, or in substitution for, outstanding awards previously granted by an entity directly or indirectly acquired by us or with which we combine (referred to as “substitute awards”), and such substitute awards shall not be counted against the total number of Interests that may be issued under the Incentive Plan, except that substitute awards intended to qualify as “incentive stock options” shall count against the limit on incentive stock options described above. No award may be granted under the Incentive Plan after the tenth anniversary of the effective date (as defined therein), but awards theretofore granted may extend beyond that date.
Asbe paid to the holders holding vested awards (including any awards that would vest as a result of the change in control provisions andoccurrence of such event but for such cancellation) the early termination right, Medley Management Inc. could be required to make payments under the tax receivable agreement that are greater than or less than the specified percentage of the actual cash tax savings that Medley Management Inc. realizes in respect of the tax attributes subject to the tax receivable agreement. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity.
Decisions made by our pre-IPO owners in the course of running our business may influence the timing and amount of payments that are received by an exchanging or selling existing owner under the tax receivable agreement. For example, the earlier disposition of assets following an exchange or acquisition transaction generally will accelerate payments under the tax receivable agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase an existing owner’s tax liability without giving rise toawards, if any, rights of an existing owner to receive payments under the tax receivable agreement. Payments under the tax receivable agreement are based on the tax reporting positions that we will determine. Medley Management Inc. will not be reimbursed for any payments previously made under the tax receivable agreement if a tax basis increase is successfully challengedas determined by the IRS. As a result, in certain circumstances, payments couldCommittee (which if applicable may be made underbased upon the tax receivable agreement in excess of the Medley Management Inc.’s cash tax savings.
Medley LLC Limited Liability Company Agreement
Medley Management Inc. holds LLC Units in Medley LLC and is the sole managing member of Medley LLC. Accordingly, Medley Management Inc. will operate and control all of the business and affairs of Medley LLC and, through Medley LLC and its operating entity subsidiaries, conduct our business.
Pursuant to the limited liability company agreement of Medley LLC, Medley Management Inc. has the right to determine when distributions will be made to holders of LLC Units and the amount of any such distributions. If a distribution is authorized, such distribution will be made to the holders of LLC Units pro rata in accordance with the percentages of their respective limited liability company interests.
The holders of LLC Units, including Medley Management Inc., will incur United States federal, state and local income taxes on their proportionateprice per share of any taxable income of Medley LLC. Net profits and net losses of Medley LLC will generally be allocated to its holders (including Medley Management Inc.) pro rata in accordance with the percentages of their respective limited liability company interests, except as otherwise required by law. The limited liability company agreement of Medley LLC will provide for cash distributions, which we refer to as “tax distributions,” to the holders of the LLC Units if Medley Management Inc., as the sole managing member of Medley LLC, determines that the taxable income of Medley LLC will give rise to taxable income for the holders of LLC Units to the extent that other distributions made by Medley LLC for such year were otherwise insufficient to cover such tax liabilities. Generally, these tax distributions will be computed based on our estimate of the net taxable income of Medley LLC multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate (including the “medicare” tax imposed under Internal Revenue Code) prescribed for an individual or corporate resident in New York, New York or California (taking into account the non-deductibility of certain expenses and the character of our income) and the character of the applicable income, but not taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes.
The limited liability company agreement of Medley LLC also provides that substantially all expenses incurred by or attributable to Medley Management Inc., but not including obligations incurred under the tax receivable agreement by Medley Management Inc., income tax expenses of Medley Management Inc. and payments on indebtedness incurred by Medley Management Inc., will be borne by Medley LLC.
Other than Medley Management Inc., holders of LLC Units, including our pre-IPO owners, will, subject to limited exceptions, be prohibited from transferring any LLC Units held by them upon consummation of the IPO, or any shares of Class A common stock received or to be received by other holders of our Class A common stock in such event), including, without limitation, in the case of options and stock appreciation rights, a cash payment equal to the excess, if any, of the fair market value of the shares of our Class A common stock subject to the option or stock appreciation right over the aggregate exercise price or strike price thereof.
Other Transactions
Christopher Taube, our Senior Managing Director, Head of Institutional Fund Raising, isordinary income to the brother of Messrs. Brookholder for federal income tax purposes, but the deduction may be limited under Sections 280G and Seth Taube, our Co-Chief Executive Officers and Co-Chairmen162(m) of the Board. In connection with his employment, Mr. Chris TaubeCode for ordinary income paid to certain executives designated in those Sections. Any gain or loss recognized upon a subsequent sale or exchange of the Class A common stock (if settled in Class A common stock) is treated as capital gain or loss for which we are not entitled to a guaranteed annual payment relateddeduction.
Name and Position | Dollar Value ($) | Number of Shares Underlying Awards | |||
Brook Taube, Co-Chief Executive Officer | — | — | |||
Seth Taube, Co-Chief Executive Officer | — | — | |||
Jeffrey Tonkel, President | — | — | |||
Richard T. Allorto, Jr., Chief Financial Officer | $850,000 | 256,024 | (1) | ||
John D. Fredericks, General Counsel and Secretary | $1,850,000 | 557,229 | (2) | ||
Executive Group | $2,700,000 | 813,253 | |||
Non-Executive Director Group | — | — | |||
Non-Executive Officer Employee Group | $3,701,008 | 1,114,761 | (3) |
(1) | Consists of 256,024 performance-based restricted LLC Units awarded by the Board, as recommended by the Compensation Committee, to be granted on the date of stockholder approval of Proposal No. 3. The award shall vest in full in three years with one-third vesting on December 31, 2019, one-third vesting on December 31, 2020 and one-third vesting on December 31, 2021, subject to continued employment on each vesting date; provided that the restricted LLC Units shall fully vest upon earlier termination of service with the Company other than due to a termination for cause or due to the employee’s resignation. The aggregate amount of restricted LLC Units actually granted will be based on the number of restricted LLC Units having a fair market value on the date of grant equal to $850,000. For estimating the number of restricted LLC Units to be included in the table above, we used our closing price of $3.32 per share as of April 17, 2019. |
(2) | Consists of (i) 256,024 performance-based restricted LLC Units awarded by the Board, as recommended by the Compensation Committee, to be granted on the date of stockholder approval of Proposal No. 3. The award shall vest in full in three years with one-third vesting on December 31, 2019, one-third vesting on December 31, 2020 and one-third vesting on December 31, 2021, subject to continued employment on each vesting date and (ii) 301,205 restricted LLC Units awarded by the Board, as recommended by the Compensation Committee, to be granted on the later of the closing date of the Merger or the date of stockholder approval of Proposal No. 3. The award shall vest in full in three years with one-third vesting on each of the first, second and third anniversaries of the closing date of the Merger, subject to continued employment on each vesting date. The aggregate amount of restricted LLC Units actually granted will be based on the number of restricted LLC Units having a fair market value on the date of grant equal to $1,850,000. For calculating the number of restricted LLC Units to be included in the table above, we used our closing price of $3.32 per share as of April 17, 2019. |
(3) | Consists of (i) 399,400 RSUs awarded to employees by the Board, as recommended by the Compensation Committee, to be granted on the date of stockholder approval of Proposal No. 3. The RSUs will vest in full in three years with one-third vesting on December 31, 2019, one-third vesting on December 31, 2020 and one-third vesting on December 31, 2021, subject to the closing of the Merger. The dollar value of the RSUs was computed using our closing price of $3.50 per share as of April 1, 2019, the date the Board, upon the recommendation of the Compensation Committee, approved the grant of the awards and (ii) 715,361 restricted LLC Units awarded by the Board, as recommended by the Compensation Committee, to be granted on the date of stockholder approval of Proposal No. 3. The award shall vest in full in three years with one-third vesting on December 31, 2019, one-third vesting on December 31, 2020 and one-third vesting on December 31, 2021, subject to continued employment on each vesting date; provided that the restricted LLC Units shall fully vest upon earlier termination of service with the Company other than due to a termination for cause or due to the employee’s resignation. The aggregate amount of restricted LLC Units actually granted will be based on the number of restricted LLC Units having a fair market value on the date of grant equal to $2,375,000. For calculating the number of restricted LLC Units to be included in the table above, we used our closing price on of $3.32 per share as of April 17, 2019. |
Name or Category | Number of Shares Subject to Stock Option Awards* | Number of Shares Granted as Stock Awards* | ||
Named Executive Officers: | ||||
Brook Taube** Co-Chief Executive Officer | — | — | ||
Seth Taube** Co-Chief Executive Officer | — | — | ||
Jeffrey Tonkel** President | — | — | ||
Richard T. Allorto Jr. Chief Financial Officer | — | 298,000 | ||
John D. Fredericks General Counsel and Secretary | — | 258,333 | ||
All current Executive Officers as a group | — | 556,333 | ||
All current Directors who are not Executive Officers as a group | — | 115,915 | ||
Director nominees: | ||||
Jeffrey T. Leeds** | — | 58,067 | ||
Guy T. Rounsaville, Jr.** | — | 25,581 | ||
James G. Eaton** | — | 32,267 | ||
All current employees who are not Executive Officers as a group | — | 2,526,306 | ||
All Directors and Executive Officers as a group (8 persons) | — | 672,248 |
Such notice must set forth the information required under our by-laws, including, but not limited to, (i) for each director nominee proposed by the stockholder, all information relating to such nominee that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Exchange Act, including such nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected and (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration), the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made.
By Order of the Board of Directors, | ||
/s/ John D. Fredericks | ||
John D. Fredericks | ||
General Counsel and Secretary |
2015,2018, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to:600 Montgomery Street35thSan Francisco, California 94111
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