| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On December 7, 2023 (the “Effective Date”), the Compensation Committee of the Board of Directors (the “Committee”) of Vivid Seats Inc., a Delaware corporation (the “Company”), approved the following actions relating to the Company’s outstanding options to purchase shares of the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”) granted under the Company’s 2021 Incentive Award Plan, as amended (the “Plan”): (a) certain outstanding options, with exercise prices ranging from $12.86 to $15.00 per share, were cancelled (the “Cancellation”); (b) the exercise price of certain outstanding options, with exercise prices ranging from $8.22 to $12.86 per share, was reduced to $6.76 per share, the closing price of the Class A Common Stock on the Nasdaq Global Select Market on the Effective Date, provided that if any such option is exercised prior to the one-year anniversary of the Effective Date, the holder will be required to pay the original exercise price (the “Repricing”); and (c) all outstanding options were amended to provide that, except as the Committee may otherwise approve, in the event of a holder’s Termination of Service (as defined in the Plan) (i) prior to the sixth anniversary of the grant date, such options will remain unexpired until the later of six years from the grant date and three months from the date of such Termination of Service, and (ii) on or following the sixth anniversary of the grant date, such options will remain unexpired until three months from the date of such Termination of Service, provided, in each case, that if such Termination of Service is (x) due to the holder’s death or Disability (as defined in the Plan), such options will remain unexpired until one year from the date of such Termination of Service, or (y) for Cause (as defined in the Plan), then the original expiration terms will apply (the “Amendment” and, together with the Cancellation and the Repricing, the “Modifications”). Other than with respect to the Modifications, the original terms of all outstanding options, including the vesting schedules and expiration dates, were unchanged. The Modifications affected options held by, among others, the Company’s executive officers.
The Committee approved the Modifications after careful consideration of various alternatives and a review of relevant factors with the advice of the Company’s independent compensation consultant. The Committee determined that the Modifications, which are permitted under the Plan, are in the best interests of the Company and its stockholders and provide the most effective means of retaining and motivating the Company’s key employees while preserving cash resources and without incurring stock dilution from significant additional equity grants.
The Cancellation and the Repricing affected the following options held by the Company’s named executive officers:
Cancellation
| | | | | | | | |
Name and Position | | Shares Underlying
Cancelled Options | | | Exercise Price Range of
Cancelled Options | |
Stanley Chia, Chief Executive Officer | | | 551,364 | | | $ | 12.86 – $15.00 | |
Lawrence Fey, Chief Financial Officer | | | 441,092 | | | $ | 12.86 – $15.00 | |
Jon Wagner, Chief Technology Officer | | | 220,546 | | | $ | 12.86 – $15.00 | |
Repricing
| | | | | | | | |
Name and Position | | Shares Underlying
Original Options | | | Exercise Price Range of
Original Options | |
Stanley Chia, Chief Executive Officer | | | 1,477,666 | | | $ | 10.26 – $12.86 | |
Lawrence Fey, Chief Financial Officer | | | 1,031,757 | | | $ | 10.26 – $12.86 | |
Jon Wagner, Chief Technology Officer | | | 578,535 | | | $ | 10.26 – $12.86 | |
