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) August 4, 2006
Rand Logistics, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-50908 20-1195343
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
450 Park Avenue, 10th Floor, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 644-3450
- --------------------------------------------------------------------------------
(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 240.13a-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 4, 2006, the Compensation Committee of the Board of Directors
(the "Compensation Committee") of Rand Logistics, Inc. (the "Registrant")
approved and adopted a Warrant Compensation Program (the "Program") providing
for awards to senior management of the Registrant and its subsidiaries, and to
non-executive directors of the Registrant, of warrants to purchase common stock
of the Registrant (the "Warrants") that are substantially identical to those
warrants included in the units issued in the Registrant's initial public
offering. The Warrants will be immediately exercisable at an exercise price of
$5.00 and expire on October 26, 2008. The Warrants will not be subject to any
forfeiture restrictions and will be freely transferable.
Other than with respect to awards to non-executive board members and the
Inducement Warrants included in Edward Levy's award (described below), the terms
of the awards will require that, if the recipient's employment is terminated
(other than as a result of death or permanent disability or termination without
cause):
(a) prior to August 31, 2006, then the recipient will be required
to pay to the Registrant an amount equal to 75% of the greater
of (i) the value of the Warrants issued to the recipient on
the date of grant, (ii) the value of the Warrants on the date
of termination of employment, and (iii) the value of the
Warrants on the date they are sold or exercised, if sold or
exercised prior to termination of employment (the greater of
(i), (ii) or (iii) being the "Payment Amount"),
(b) on and after August 31, 2006 and prior to November 30, 2006,
then the recipient will be obligated to pay to the Registrant
an amount equal to 50% of the Payment Amount, and
(c) on and after November 30, 2006 and prior to February 28, 2007,
then the recipient will be obligated to pay to the Registrant
an amount equal to 25% of the Payment Amount.
In all cases, a recipient's Payment Amount obligation may be satisfied by
delivery of securities of the Registrant with a market value equal to the
Payment Amount obligation.
Pursuant to the Program, in lieu of cash compensation that would otherwise
be paid to such individuals, the Compensation Committee awarded Laurence Levy,
the Registrant's Chief Executive Officer, 303,030 Warrants; Edward Levy, the
Registrant's President, 353,535 Warrants; and Jonathan Brodie, H. Cabot Lodge
III and Isaac Kier, all non-executive directors of the Registrant, were each
awarded 25,253 Warrants.
Of the 353,535 Warrants Edward Levy was awarded, 151,515 (the "Inducement
Warrants") were awarded as an inducement to accept the position of President of
the Registrant, and the issuance of additional warrants is in lieu of cash
compensation for the first year of Mr. Levy's employment. The terms of Mr.
Levy's award with respect to the Inducement Warrants will require that, if his
employment is terminated (other than as a result of death or permanent
disability or termination without cause):
(a) prior to September 30, 2006, then Mr. Levy will be required to
pay to the Registrant an amount equal to 90% of the Payment
Amount,
(b) on and after September 30, 2006 and prior to December 31,
2006, then Mr. Levy will be obligated to pay to the Registrant
an amount equal to 80% of the Payment Amount,
(c) on and after December 31, 2006 and prior to March 30, 2007,
then Mr. Levy will be obligated to pay to the Registrant an
amount equal to 70% of the Payment Amount,
(d) on and after March 30, 2007 and prior to June 30, 2007, then
Mr. Levy will be obligated to pay to the Registrant an amount
equal to 60% of the Payment Amount,
(e) on and after June 30, 2007 and prior to September 30, 2007,
then Mr. Levy will be obligated to pay to the Registrant an
amount equal to 50% of the Payment Amount,
(f) on and after September 30, 2007 and prior to December 31,
2007, then Mr. Levy will be obligated to pay to the Registrant
an amount equal to 40% of the Payment Amount,
(g) on and after December 31, 2007 and prior to March 30, 2008,
then Mr. Levy will be obligated to pay to the Registrant an
amount equal to 30% of the Payment Amount,
(h) on and after March 30, 2008 and prior to June 30, 2008, then
Mr. Levy will be obligated to pay to the Registrant an amount
equal to 20% of the Payment Amount, and
(i) on and after June 30, 2008 and prior to September 30, 2008,
then Mr. Levy will be obligated to pay to the Registrant an
amount equal to 10% of the Payment Amount.
In addition to their salaried compensation, Scott Bravener, President of
Lower Lakes Towing Ltd. and Lower Lakes Transportation Company, both indirectly
wholly-owned subsidiaries of the Registrant, was awarded by Lower Lakes Towing
Ltd. 75,758 Warrants; and Joseph W. McHugh Jr., the Registrant's Chief Financial
Officer, was awarded 30,303 Warrants.
The Warrants included in the foregoing awards will be issued to the
recipients after the filing of a Registration Statement on Form S-8, which the
Registrant intends to file as soon as practicable.
ITEM 3.03. MATERIAL MODIFICATION OF RIGHTS OF SECURITY HOLDERS
On August 8, 2006, the Registrant filed with the Secretary of State of the
State of Delaware an Amended and Restated Certificate of Designations for its
Series A Convertible Preferred Stock. The Amended and Restated Certificate of
Designations excludes from the definition of "Additional Shares" included
therein (i) the 2,402,957 shares of the Registrant's common stock issued on
August 1, 2006 pursuant to the Stock Purchase Agreement effective as of such
date and described in the Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 2, 2006 and (ii) common stock
issuable upon exercise of up to 1,000,000 warrants which, in the aggregate, may
be issued to senior management of the Registrant and its subsidiaries, and to
non-executive directors of the Registrant in lieu of cash compensation which
would otherwise be paid to such individuals. A copy of the Amended and Restated
Certificate of Designations is attached as Exhibit 3.1 and is incorporated
herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 3.1 Amended and Restated Certificate of Designations of the
Registrant, dated August 8, 2006.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
RAND LOGISTICS, INC.
Date: August 10, 2006 By: /s/ Laurence S. Levy
-----------------------------
Name: Laurence S. Levy
Title: Chairman of the Board and
Chief Executive Officer