Business Context and Reporting Period
This Form 8-K Current Report was filed by Farmland Partners Inc. on February 6, 2019. The filing discloses the execution of an amended and restated employment agreement with Erica Borenstein, the Company's General Counsel and Secretary.
Key Financial Metrics
The filing text does not provide revenue, profit, cash flow, margins, debt, or liquidity metrics. This report focuses exclusively on executive compensation arrangements.
Material Changes and Compensation Details
The primary material change is the new employment terms for Ms. Borenstein effective February 6, 2019:
- Term: Three years, with automatic one-year extensions thereafter.
- Base Salary: $175,000, subject to annual review.
- Bonus: Eligible for an annual bonus based on performance goals.
- Equity: Eligible for equity and long-term incentive awards under applicable plans.
Outlook, Risks, and Severance Provisions
The agreement outlines specific severance triggers and payouts, which represent potential future liabilities:
- Termination without Cause / Good Reason / Change in Control:
- Accrued benefits.
- Severance equal to 2x the sum of: (A) base salary, (B) average of the three most recent annual bonuses, and (C) average equity award value of the three most recent grants.
- COBRA premium reimbursement for up to 18 months.
- Immediate full vesting of outstanding equity awards.
- Termination for Cause / Without Good Reason: Entitled only to accrued benefits.
- Death or Disability: Entitled to accrued salary, bonuses, vacation, and COBRA reimbursement (up to 18 months for disability).
- Definitions: "Good reason" includes a material diminution in duties or a reduction of total compensation to less than $250,000. "Change in Control" includes a 50% ownership change, board composition change, or sale of 80% of assets.
Investor Verification Checklist
- Verify the total potential severance liability by calculating the 2x multiplier against Ms. Borenstein's current bonus history and recent equity grants.
- Review the full text of Exhibit 10.1 for specific restrictions on the equity award valuation and COBRA reimbursement.
- Confirm if the $250,000 total compensation threshold for "good reason" is met under current bonus projections.
- Assess the impact of the "Change in Control" definition on potential M&A scenarios, specifically the 80% asset sale threshold.