Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
On September 6, 2017, the Compensation Committee of A. H. Belo Corporation (the “Company”) approved an amendment to the Employment Agreement with Timothy M. Storer dated March 2, 2017 (the “Amendment”), revising and clarifying the financial performance metrics relating to his annual cash incentive bonus opportunity for 2017 and his performance-based restricted stock units (
“
PBRSUs
”
) for 2017.
The revisions reflect the expanded scope of Mr. Storer’s oversight responsibilities over the DMV Portfolio
c
ompanies. Both the consolidated
A
djusted EBITDA and the
T
otal
C
ontract
V
alue
(“TCV”)
metrics were revised
to reflect his expanded role.
For 2017, t
he DMV Portfolio
c
ompanies
and TCV
E
ntities
include Distribion, Inc., Vertical Nerve, Inc., CDFX, LLC,
Your
Speakeasy
, LLC
and Connect.
Under the amended Employment Agreement, Mr. Storer will receive a compensation package that consists of a base salary of $450,000, with a target bonus opportunity set at $300,000, or approximately 67% of his base salary. Mr. Storer will be eligible for an annual 2.5% increase in base salary each year after the first year of his five-year employment contract provided that the DMV Portfolio
c
ompanies achieve 85% or more of their prior year consolidated
A
djusted EBITDA
T
arget.
Mr. Storer’s annual cash incentive bonus opportunity will be based upon financial performance metrics of the DMV Portfolio
c
ompanies. For 2017, the financial performance metrics will be weighted as follows: (i) 50% against the consolidated
A
djusted EBITDA
T
arget
of the DMV Portfolio
c
ompanies, as revised by this Amendment; and (ii) 50% against the
TCV
E
ntities
’
TCV
T
arget
, as revised by this Amendment. Threshold, target and maximum performance and payout ranges for the consolidated
A
djusted EBITDA and TCV components are 85%, 100%, and 200%, respectively, for performance, and 50%, 100%, and 200%, respectively, for payout.
On March 2, 2017, Mr. Storer was granted PBRSUs having an at-target value of $500,000. The PBRSUs will be earned
based on the DMV Portfolio
c
ompanies’ achievement level of consolidated
A
djusted EBITDA for 2017, as revised by this
A
mendment. Provided Mr. Storer remains employed by the Company on the first anniversary date of the grant and the DMV Portfolio
c
ompanies’ consolidated
A
djusted EBITDA is at least 95% of the 2017 target, the P
B
RSUs will vest and be paid out 60% in shares of Series A Common Stock and 40% in cash. The payout will be prorated for achievement between 95% and 100% of the DMV Portfolio
c
ompanies’ consolidated
A
djusted EBITDA, and is capped at 100% of target.
The foregoing summary of the Amendment is not complete and is qualified in its entirety by reference to the Amendment, which is filed herewith as Exhibit 10.1 and incorporated by reference.
Terms not defined herein, shall have the meaning set forth in the Employment Agreement and Amendment.
Mr. Storer’s Employment Agreement dated March 2, 2017 was previously filed with the Securities Exchange Commission on Form 8-K filed March 6, 2017. The form of award notice for Mr. Storer’s amended PBRSU grant is filed herewith as Exhibit 10.2, and is incorporated herein by reference.
On September 6, 2017, the Board of Directors approved certain administrative amendments to the A. H. Belo Savings Plan (the “Third Amendment to the Savings Plan”) that (i) eliminate the requirement that a Savings Plan participant complete one year of service prior to being eligible to receive a Company matching contribution, (ii) add a new Company subsidiary, Your Speakeasy
,
LLC, as a participating employer; (iii) permit, beginning with the January 1, 2018 Plan year, the Savings Plan to receive employee participant contributions as Roth contributions, receive rollovers of Roth contributions from other qualified plans, as well as receive catch-up contributions as Roth contributions; and (iv) permit Company make-whole matching contributions, beginning with the 2018 plan year, provided that the Company’s cumulative Plan year matching contribution to a participant’s Savings Plan account is less 1.5% of such participant’s annual compensation and the participant deferred 1.5% or more of his or her annual compensation to the Savings Plan during the Plan year, provided further that such participant remains employed through the end of the applicable Plan year. The foregoing summary of the Third Amendment to the Savings Plan is not complete and is qualified in its entirety by reference to the Third Amendment to the Savings Plan, which is filed herewith as Exhibit 10.3 and incorporated by reference.