Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
As previously announced, on May 4, 2022, Black Knight, Inc., a Delaware corporation (“Black Knight”), entered into an Agreement and Plan of Merger (as amended from time to time, the “Merger Agreement”) with Intercontinental Exchange, Inc., a Delaware corporation (“ICE”), and Sand Merger Sub Corporation, a Delaware corporation and a wholly owned subsidiary of ICE. On December 19, 2022, Black Knight entered into a letter agreement with Anthony M. Jabbour, the Executive Chairman of Black Knight’s Board of Directors, memorializing certain compensatory actions in connection with the merger contemplated by the Merger Agreement (the “Merger”).
The preexisting terms of Mr. Jabbour’s existing employment agreement, dated as of April 1, 2018 and amended as of May 16, 2022, provide that if Black Knight is sold during the term of the agreement, Mr. Jabbour will be eligible to receive a discretionary bonus in an amount determined by the Compensation Committee (the “Committee”) of the Black Knight Board of Directors. As previously disclosed in the registration statement filed by ICE with the U.S. Securities and Exchange Commission (the “SEC”) on Form S-4 containing a proxy statement/prospectus, as amended, and the definitive proxy statement dated August 19, 2022 filed by Black Knight with the SEC (the “Proxy Statement”), which Black Knight first mailed to its stockholders on or about August 19, 2022, the letter agreement provides that the amount of the discretionary bonus that Mr. Jabbour is eligible to receive, contingent upon the closing of the Merger, is $40,000,000 (the “Discretionary Bonus”) and that, in connection with certain tax-planning actions to mitigate the potential impact of Section 280G of the Internal Revenue Code on Mr. Jabbour and Black Knight, such bonus will be paid to Mr. Jabbour no later than December 28, 2022. The letter agreement further provides that if Mr. Jabbour is terminated by the Company for cause or Mr. Jabbour resigns his employment without good reason, in each case prior to consummation of the Merger, or if the Merger Agreement is terminated without the consummation of the Merger, he will be required to pay liquidated damages to Black Knight equal to the value of the after-tax proceeds of the Discretionary Bonus that would not have ultimately been paid absent the tax-planning actions described above (plus any tax refund he receives in respect of such payment), which amount will be deposited in an escrow account established by Mr. Jabbour as security for the liquidated damages.
In addition, on December 20, 2022, to further mitigate the potential impact of Section 280G of the Internal Revenue Code on the applicable executive and Black Knight, the Committee determined that each of Messrs. Jabbour, Joseph M. Nackashi, Kirk T. Larsen and Michael L. Gravelle will receive a 2022 annual cash incentive award equal to 75.0% of his target incentive opportunity and that the outstanding equity awards granted to Mr. Jabbour that would otherwise vest in the first quarter of 2023 will accelerate and vest, with such vesting or payment to occur no later than December 30, 2022.
The foregoing description of the letter agreement with Mr. Jabbour does not purport to be complete and is qualified in its entirety by reference to the full text of the letter agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.