Business Context and Reporting Period
This Form 8-K Current Report was filed by Ribbon Communications Inc. on June 18, 2020, with the earliest event reported on June 18, 2020. The filing details significant changes to the Company's Board of Directors and executive leadership, including the resignation of three directors and the appointment of three new directors designated by Swarth (a consortium of JPMC Heritage Parent LLC, Heritage PE (OEP) III, L.P., and ECI Holding (Hungary) Kft). Additionally, the report announces the appointment of a new Chief Financial Officer and the departure of the incumbent CFO and General Counsel.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on corporate governance changes and executive compensation arrangements.
Material Changes Versus Prior Period
- Board Composition: Richard Lynch, Kent Mathy, and Scott Schubert resigned as directors effective June 18, 2020. Shaul Shani, Mariano de Beer, and Tanya Tamone were appointed as directors effective June 19, 2020.
- Executive Leadership: Miguel Lopez was appointed Executive Vice President and Chief Financial Officer, effective June 29, 2020. Daryl Raiford (current CFO) and Justin Ferguson (EVP, General Counsel, and Corporate Secretary) are departing the Company.
- Committee Structure: A new Technology and Innovation Committee was created, with Mariano de Beer, Beatriz Infante, and Krish Prabhu serving as members.
Guidance, Outlook, and Compensation Details
The filing contains no financial guidance or outlook. It details specific compensatory arrangements for the new leadership:
- New Directors: Mariano de Beer and Tanya Tamone will receive an annual retainer of $60,000 and restricted share units valued at $120,000. Shaul Shani intends to waive his right to participate in the Director Compensation Program.
- New CFO (Miguel Lopez):
- Base Salary: $525,000 annually.
- Target Bonus: 75% of base salary.
- Equity Grants: Annual RSUs and PSUs valued at $393,750 each; Sign-on RSUs valued at $212,500.
- Relocation: One-time cash allowance of $50,000 (subject to reimbursement conditions).
- Severance: Upon termination without Cause or for Good Reason, Lopez is entitled to 100% of annual base salary paid over 12 months, a prorated bonus, and 12 months of health premiums. In the event of a Change in Control followed by termination within 12 months, equity awards accelerate and severance is paid as a lump sum.
Investor Verification Checklist
- Verify the effective dates of the new CFO's employment and the departure of the current CFO and General Counsel.
- Review the definitive proxy statement filed on April 29, 2020, for details on the Swarth consortium's designation of new directors.
- Examine the Employment Agreement (Exhibit 10.1) and Severance Agreement (Exhibit 10.2) for specific definitions of "Cause," "Good Reason," and "Change in Control."
- Confirm the vesting schedules and performance thresholds for the new CFO's equity awards.
- Monitor future filings for the appointment of a new General Counsel and Corporate Secretary following Patrick Macken's appointment.