Business Context and Reporting Period
This Form 8-K was filed by Donnelley Financial Solutions, Inc. on July 13, 2017. The report discloses the amendment and restatement of the employment agreement for Daniel N. Leib, effective as of the filing date.
Key Financial Metrics
The filing does not provide general corporate financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The only financial data disclosed relates to the specific compensation terms for Mr. Leib:
- Base Salary: Not less than $700,000 per year.
- Target Annual Bonus: Not less than 100% of base salary.
Material Changes
The primary material change is the execution of an Amended and Restated Employment Agreement (A&R Employment Agreement) with Daniel N. Leib. This agreement updates terms originally dated May 3, 2011, and previously amended in October 2016. The amendment clarifies severance and equity treatment upon termination or a change in control.
Outlook, Risks, and Unusual Items
Severance Provisions:
- Standard Qualifying Termination: Severance equal to two times the sum of base salary and target annual bonus, plus pro-rata bonus, prior year bonus (if unpaid), and two years of COBRA coverage.
- Change in Control Qualifying Termination: Severance increases to two and one-half times the sum of base salary and target annual bonus, plus pro-rata target bonus, prior year bonus (if unpaid), and two years of COBRA coverage.
Equity Treatment:
- Awards issued on or prior to Dec 31, 2019: Time-based awards fully vest upon Qualifying Termination. Performance-based awards vest at target levels upon Change in Control or Qualifying Termination within the specified window.
- Awards issued on or after Jan 1, 2020: Time-based awards fully vest only upon Qualifying Termination within the Change in Control window. Performance-based awards vest at target levels upon Change in Control or Qualifying Termination within the specified window.
Conditions and Risks:
- All payments are conditioned on Mr. Leib granting a release and complying with non-competition, non-solicitation, non-disparagement, and confidentiality covenants.
- A "golden parachute" provision exists to reduce payments if they would trigger the excise tax under Section 4999 of the Internal Revenue Code, provided the reduction benefits Mr. Leib after-tax.
Investor Verification Checklist
- Review the full text of the Amended and Restated Employment Agreement attached as Exhibit 10.1 for precise definitions of "Cause," "Good Reason," and "Change in Control."
- Verify the total potential liability exposure for the company under the severance provisions in the event of a Change in Control.
- Confirm the status of any outstanding equity awards held by Mr. Leib to assess immediate vesting implications.