UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 19, 2020 (February 14, 2020)
Cogent Communications Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | | 000-51829 | | 46-5706863 |
(State or other jurisdiction of
incorporation) | | (Commission File Number) | | (I.R.S. Employer
Identification No.) |
2450 N St NW,
Washington, District of Columbia | | 20037 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: 202-295-4200
Not Applicable
__________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | | Trading Symbol | | Name of Each Exchange on which Registered |
| Common Stock, par value $0.001 per share | | CCOI | | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 14, 2020 the Company's US operating subsidiary entered into an amendment to its CEO, Dave Schaeffer’s, employment agreement which extended the term through 2024 and changed the bonus criteria by which he earns his annual bonus to be measured based on year over year growth in the company’s revenue and EBITDA, as adjusted, with each measure at target equal to 50% of the target bonus. The Compensation Committee of the company’s Board of Directors will set the revenue growth rate and EBITDA, as adjusted, growth rate targets each year. If the actual growth rate for a performance measure is less than the targeted amount set by the Committee, then the bonus for that component shall be reduced such that it is proportional to performance realized. If the performance measure is zero or negative, the bonus for that performance measure shall be zero. This description of the amendment to the employment agreement does not purport to be complete, and is subject to and qualified in its entirety by reference to the full text of amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
On February 14, 2020, the Board of Directors granted David Schaeffer, Chairman of the Board, President and Chief Executive Officer of the Company, an award of up to 189,000 shares of restricted stock (dependent upon meeting performance criteria). The stock has voting rights. A portion of the grant, 84,000 shares, will vest in monthly increments of 7,000 shares starting on January 1, 2023 continuing through December 1, 2023. The remaining portion of the grant, up to 105,000 performance shares will vest on April 1, 2024 based on the following performance metrics:
1) Up to 35,000 shares based on the Company’s organic growth rate in revenue as compared to the organic growth rate of the NASDAQ Telecommunications Index (“NTI”) between April 1, 2020 and December 31, 2023.
2) Up to 35,000 shares based on the Company’s organic growth rate in cash flows from operating activities as compared to the NTI between April 1, 2020 and December 31, 2023.
3) Up to 35,000 shares based on the Company’s total shareholder return as compared to the total shareholder return of the NTI between April 1, 2020 and December 31, 2023.
This description of the provisions of the Restricted Stock Award to Mr. Schaeffer does not purport to be complete, and is subject to and qualified in its entirety by reference to the full text of amendment, which is attached as Exhibit 10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
In addition each other executive officer received a grant of restricted stock twenty percent of which vests in quarterly increments in March, June, September and December 2023. The remaining twenty percent vests on December 1, 2023 based on attainment of customer satisfaction goals. The stock has voting rights. The terms and conditions of the grants conform to the Form of Restricted Stock Award in use since 2017 for all grants from the Company to any of the Vice President named executive officers, which is referenced as Exhibit 10.3.
Item 8.01 Other Events.
On February 14, 2020, the Board adopted a set of corporate governance guidelines (the “Corporate Governance Guidelines”), which, among other things, established the position of Lead Independent Director, and elected Marc Montagner to serve as the Company’s first Lead Independent Director.
The adoption of the Corporate Governance Guidelines and creation of the Lead Independent Director role reflects the Company’s continued commitment to improved corporate governance. The Lead Independent Director will, among other duties, act as a liaison between the independent directors and management; chair executive sessions of the independent directors; serve as a point of contact for stockholders that is independent from management; and have such other duties as set forth in the Corporate Governance Guidelines. The Corporate Governance Guidelines that can be found on the Company’s website at www.cogentco.com.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | Cogent Communications Holdings, Inc. |
| | |
| | |
| February 19, 2020 | By: | /s/ David Schaeffer |
| | | Name: David Schaeffer |
| | | Title: President and Chief Executive Officer |
