PROPOSAL 4 — AMENDMENTS TO THE TRIPLE-S MANAGEMENT CORPORATION 2017 INCENTIVE
PLAN
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Proposal 4 is presented by the Board to: (i) amend Sections 5(a), 5(c) and 5(e) of the the Triple-S Management Corporation 2017 Incentive Plan (the Plan”); and (ii) add new Sections 5(g) and 9(e) to the Plan. Said amendments would replenish and increase the total number of shares reserved for issuance under the Plan by 1,100,000. The amendment will (i) increase the number of shares available for issuance under the Plan to 2,800,000, of which 1,882,732 shares will be available for future awards as of December 31, 2019; (ii) clarify that the number of shares surrendered or withheld in payment of any exercise or other price of an Award or taxes related to an Award shall not again be, or shall not become, available for distribution under the Plan; (iii) prohibit the payment of dividends and dividend equivalents on unearned and/or unvested awards; (iv) establish a minimum vesting requirement of a least one (1) year on all awards granted under the Plan; and (v) establish specific treatment of performance based awards upon a change in control.
We are presenting the following resolutions, which provides you the opportunity to endorse or not endorse the following amendments to the Plan:
RESOLVED, that Section 5(a) of the Plan shall be amended as follows:
(a) Subject to adjustment as provided below, the maximum number of Shares available for issuance under the Plan will not exceed 1,700,0002,800,000 Shares, plus the number of Shares that were subject to any outstanding awards under the Triple-S Management Corporation 2007 Incentive Plan as of the Effective Date that are thereafter forfeited, cancelled, expire, terminate, or otherwise lapse, in whole or in part without the delivery of Shares. All Shares remaining available for issuance under the Triple-S Management 2007 Incentive Plan will be cancelled upon the adoption of the Plan by the shareholders of the Company. Notwithstanding the foregoing and subject to adjustment as provided in Section 1, no Participant may receive under the Plan in any calendar year (i) Options or Stock Appreciation Rights that relate to more than 600,000 Shares; (ii) Restricted Stock and RSUs that relate to more than 300,000 Shares; or (iii) Performance Awards or Other Stock-Based Awards that relate to more than 300,000 Shares; and the maximum amount that may be paid in a calendar year in respect of an annual Award denominated in cash or value other than Shares with respect to any Participant shall be $3,000,000, and the maximum amount of a long-term incentive Award denominated in a cash shall be $1,500,000 multiplied by the number of years included in any applicable Performance Period(s) (and any applicable fraction for any Performance Period(s) of less than one year) relating to such Awards.
FURTHER RESOLVED, that Section 5(c) of the Plan shall be amended as follows:
(c) Any shares subject to an Award (but not including any Substitute Award), that expires, is cancelled, forfeited, or otherwise terminates without the delivery of Shares, excluding the number of shares surrendered or withheld in payment of any exercise or other price of an Award or taxes related to an Award, shall again be, or shall become, available for distribution under the Plan. The number of Shares surrendered or withheld in payment of any exercise or other price of an Award or taxes related to an Award shall not again be, or shall not become, available for distribution under the Plan. Upon the exercise of SRAs, the gross number of Shares exercised shall be deducted from the total number of Shares remaining available for issuance under the Plan. In the event the Company repurchases Shares on the open market, such Shares shall not be added to the Shares available for issuance under the plan.
FURTHER RESOLVED, that Section 5(e) of the Plan shall be amended as follows:
(e) In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, issuance of Shares pursuant to the anti-dilution provisions of the Shares, or other similar corporate transaction or event affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall adjust equitably any or all of (i) the number and type of Shares (or other securities) which thereafter may be made the subject of Awards, including the aggregate and individual limits specified in