Business Context and Reporting Period
This Form 8-K Current Report, dated May 21, 2009, covers Evercore Partners Inc. (Evercore). The filing primarily announces a significant change in executive leadership and the execution of related material definitive agreements.
Key Financial Metrics and Agreements
This filing does not report operational financial results such as revenue, profit, or cash flow. Instead, it details specific financial terms of new executive compensation and equity transactions:
- Executive Compensation: Annual base salary of $500,000; target annual bonus of $1,325,000 (prorated for 2009); and a one-time cash sign-on bonus of $6.1 million.
- Equity Investment: Purchase of 1,391,466 Class B-3 Partnership Units for $15,000,000 by the new CEO and his trust.
- Equity Awards: Grant of 900,000 Restricted Stock Units (RSUs) subject to performance-based vesting conditions.
Material Changes and Leadership Transition
On May 22, 2009, Ralph L. Schlosstein was elected to the Board of Directors and appointed President and Chief Executive Officer. Mr. Schlosstein replaces the previous CEO role, while Mr. Altman continues as Chairman of the Board. Mr. Schlosstein previously served as CEO of HighView Investment Group, which was wound down in April 2009 due to market conditions, resulting in the return of investor capital.
Outlook, Risks, and Contractual Terms
The filing outlines specific contractual risks and conditions associated with the new CEO's tenure:
- Equity Lock-up: The $15 million Partnership Units are non-exchangeable and non-pledgeable for five years, except in cases of death, disability, termination without Cause, resignation for Good Reason, or a Change in Control.
- Performance Vesting: The 900,000 RSUs vest over five years contingent on the stock price hitting specific targets ($20, $25, $30, $35, and $40) for 20 consecutive trading days.
- Severance Provisions: In the event of termination without Cause or resignation for Good Reason, the CEO is entitled to accrued salary, pro-rated bonuses, and accelerated vesting of equity awards.
- Restrictive Covenants: A 12-month non-compete and non-solicitation period applies post-employment, reducible to six months if the company elects to pay salary and benefits during that period.
Investor Verification Checklist
- Verify the total cash outflow impact of the $6.1 million sign-on bonus and $15 million equity purchase on the company's immediate liquidity.
- Confirm the current stock price relative to the $20-$40 vesting thresholds for the 900,000 RSUs to assess dilution risk.
- Review the "Call Right" provision allowing the company to reacquire Partnership Units at fair value if the CEO resigns with Good Reason or is terminated for Cause.
- Assess the strategic implications of Mr. Schlosstein's background at BlackRock and the winding down of HighView Investment Group.