Business Context and Reporting Period
This Form 8-K Current Report was filed by W&T Offshore, Inc. on March 13, 2009, regarding events occurring on March 10, 2009. The filing addresses a modification to the Company's 2008 general bonus program under its 2005 Annual Incentive Plan and Long-Term Incentive Compensation Plan.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to specific executive compensation adjustments:
- Total Cash/Stock Deficit for Named Executives: Approximately $412,831.18 in remaining bonus value to be paid in cash or additional stock.
- Trigger Event: A recent decline in the market price of the Company's common stock resulted in insufficient shares available under the Bonus Plan to cover the full 2008 Stock Bonus Amount.
Material Changes
The primary material change is the alteration of the 2008 bonus payout structure due to share availability constraints:
- Share Issuance: The Company granted substantially all available restricted stock shares on a pro rata basis to employees and executive officers based on the March 11, 2009 closing price.
- Deferred Payment: The difference between the intended Stock Bonus Shares and the Issued Bonus Shares will be paid on or before May 15, 2009.
- Payment Method: The Company retains sole discretion to pay the remaining balance in cash or additional restricted stock (based on the May 4, 2009 closing price) if shareholders approve an increase in available shares.
Guidance, Outlook, and Risks
Management Commentary: The Compensation Committee acted to address the shortfall caused by the declining stock price. All granted restricted stock is subject to a three-year vesting schedule (one-third annually starting December 15, 2009).
Risks and Contingencies: The final form of the remaining bonus payment (cash vs. stock) is contingent upon shareholder approval for an increase in the number of shares available under the Bonus Plan. Until vesting, all shares are held in book-entry form by the transfer agent.
Important Facts for Investors to Verify
- Whether shareholders approve an increase in the number of shares available under the Bonus Plan, which would allow the remaining bonus to be paid in stock rather than cash.
- The specific closing price of the Company's common stock on May 4, 2009, if the Company elects to pay the remaining balance in stock.
- The impact of the cash portion of the bonus payments on the Company's liquidity when paid on or before May 15, 2009.
- The continued decline or recovery of the stock price, which directly influenced the need for this modification.