Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(a) Effective September 9, 2018, Michael Brauser has resigned as Executive Chairman and as a member of the Board of Directors of Red Violet, Inc. (the “Company”). In accepting Mr. Brauser’s resignation, the Board of Directors of the Company has agreed to the continued vesting of Mr. Brauser’s RSUs in accordance with the terms of his RSU agreement and continued compensation in accordance with the terms of his existing agreement with the Company. On September 9, 2018, the Company’s Board of Directors appointed Derek Dubner, the Company’s Chief Executive Officer, as Interim Chairman of the Board of Directors.
(e) On September 5, 2018 (the “Effective Date”), the Company’s Compensation Committee approved the grant of performance and time vested Restricted Stock Units (“RSUs”) under its 2018 Stock Incentive Plan (the “Plan”) to certain of its executive officers and directors as described below. Except as provided in the Plan, a recipient’s employment agreement or the award agreement, the RSU grants shall not vest unless and until the Company has, for any fiscal quarter in which the RSUs are outstanding, (i) gross revenue determined in accordance with the Company’s reviewed or audited financial statements in excess of $7.0 million for such fiscal quarter, (ii) positive adjusted EBITDA, also as determined based on the Company’s reviewed or audited financial statements for such fiscal quarter and reported on Company’s Quarterly Reports on Form10-Q or Annual Reports on Form10-K, and (iii) the participant continues to provide services to the Company either as an employee, director or consultant on the last date of the quarter that the performance criteria is met (collectively, (i-iii), the “Performance Criteria”). Revenue and expenses from acquisitions made after the Effective Date and prior to the achievement of the Performance Criteria shall not be included in the determination of whether the Company has achieved the Performance Criteria. If the Performance Criteria are met, the RSUs will vestone-third annually on July 1, 2019, July 1, 2020 and July 1, 2021 (“Time-Based Vesting Requirement”). If the Performance Criteria are met, any portion of the RSUs which has passed a Time-Based Vesting Requirement date shall be issued in accordance with the distribution procedures in the award agreement. In the event of a Change of Control (as defined in the Plan), all RSUs which have not vested on the date of such Change of Control shall immediately vest.
The foregoing is a summary of the terms of the RSU Award Agreement and is qualified in its entirety by reference to the complete text of the RSU Award Agreement, which will be filed by the Company as an exhibit to its Quarterly Report onForm 10-Q for the quarter ending September 30, 2018.
On September 5, 2018, the Compensation Committee granted the following RSUs subject to the Time-Based Vesting Requirement and Performance Criteria as described above to:
Michael Brauser – 500,000
Derek Dubner – 375,000
James Reilly – 275,000
Daniel MacLachlan – 275,000
Peter Benz – 25,000
Steven D. Rubin – 25,000
Robert Swayman – 12,500
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
