UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 13, 2013
Registrant's Telephone Number, Including Area Code: (614) 255-3333
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
On February 13, 2013, the Compensation Committee of the Board of Directors of Diamond Hill Investment Group, Inc. (the "Company") adopted the Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy, a copy of which is attached hereto as Exhibit 99 and incorporated herein by reference.
This policy generally provides for the recoupment by the Company under certain circumstances of annual cash bonuses, stock-based awards, performance-based compensation and any other forms of cash or equity compensation other than salary.
To implement the policy, on February 13, 2013, the Company entered into a Compensation Restitution and Recoupment Policy Acknowledgement and Agreement (the "Recoupment Agreement") with each of its executive officers, including the following named executive officers of the Company:
R. H. Dillon, Chief Executive Officer; and James F. Laird, Chief Financial Officer and Secretary.
In the Recoupment Agreement, the executive officer acknowledges the existence of the policy and its application to all awards granted after the date of the Recoupment Agreement and agrees that the officer's execution of the Recoupment Agreement is a condition to the receipt of future awards.
The foregoing description of the Recoupment Agreements does not purport to be complete and is qualified in its entirety by reference to the form of Recoupment Agreement attached hereto as Exhibit 99.1, which is incorporated herein by reference.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DIAMOND HILL INVESTMENT GROUP, INC.
Date: February 20, 2013 By: /s/ James F. Laird
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James F. Laird, Chief Financial
Officer and Secretary
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99. Diamond Hill Investment Group, Inc. Compensation Recoupment and
Restitution Policy
99.1 Diamond Hill Investment Group, Inc. Compensation Recoupment and
Restitution Policy Acknowledgement and Agreement
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Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy
Adopted February 13, 2013
This Compensation Recoupment and Restitution Policy (this "Policy") of Diamond Hill Investment Group, Inc., an Ohio corporation (the "Company"), and its affiliates (collectively, "Diamond Hill") provides for the recoupment or restitution by the Company, under certain circumstances, of annual cash bonuses, stock-based awards, performance-based compensation, and any other forms of cash or equity compensation other than salary ("Awards"). This Policy applies to (i) all of Diamond Hill's current employees and (ii) all former employees who were employed by Diamond Hill during any "Adjustment Period" (as defined below), except to the extent that an Award agreement, Award statement or terms and conditions relating to any Award expressly provides that this Policy does not apply.
Compensation Recoupment and Restitution. If (i) the Company's
previously issued financial statements are restated as a result of error,
omission, fraud or non-compliance with financial reporting requirements or
(ii) there has been an erroneous calculation of the Company's incentive
compensation pool from which Awards are made for any period (either (i) or
(ii) is referred to as an "Adjustment Event"), the Compensation Committee
of the Company's Board of Directors will review the facts and circumstances
underlying the Adjustment Event. The Compensation Committee will make a
recommendation to the Company's Board of Directors as to whether the Company
should recover all or a portion of an Award (or multiple Awards) from, or
otherwise adjust an Award to, one or more employees (or former employees)
with respect to an "Adjustment Period" in which the Company's financial
results are affected by an Adjustment Event. An "Adjustment Period" is the
three-year period ending on the date that the Company (i) is required to
prepare an accounting restatement or (ii) identified the erroneous
calculation of the incentive compensation pool, as applicable.
If (i) any Award(s) was paid, granted or vested based upon the achievement of financial results that are subsequently restated or based on the improper calculation of the incentive compensation pool, or (ii) a lower payment, Award value or vesting amount would have occurred based upon the restated financial results or the proper calculation of incentive compensation pool, the Company may seek to recoup, and any such employee (or former employee) will forfeit or repay, all or any portion of such excess compensation as the Board of Directors deems appropriate. Recoupment under this Policy may include, but is not limited to, reimbursement by the employee of the amount of cash bonuses received, cancellation or forfeiture of outstanding stock-based compensation or Awards, the payment to the Company of stock sale proceeds and the surrender of shares of the Company, and the manner of recoupment will be determined by the Board of Directors in its discretion. To the extent not inconsistent with applicable law regarding extensions of credit by the Company under the Sarbanes-Oxley Act of 2002 or any other applicable law, the Board of Directors may determine the period of time and method for repayment of the designated amount.
If (i) any Award(s) would have been paid, granted or vested or (ii) a higher payment, Award value or vesting amount would have occurred based on the restated financial results or the proper calculation of the incentive compensation pool, the Compensation Committee of the Company's Board of Directors will review the facts and circumstances underlying the restatement or improper calculation of the incentive compensation pool. The Compensation Committee will make a recommendation to the Company's Board of Directors as to whether the Company should make appropriate restitution to affected employees who are then currently employed by the Company. The Board of Directors will determine, in its sole discretion, the amount, form and timing of any such restitution, which will be no more than the difference between the amount of compensation that was paid or awarded and the amount that would have been paid or granted based on the actual, restated financial statements or properly calculated incentive compensation pool. The Company will not be obligated to pay to any employee any additional compensation under this Policy.
Additional Recoupment for Fraud or Misconduct. If the Compensation
Committee determines that an employee (i) engaged in an act of fraud or
misconduct that contributed to the need for a financial restatement, or
(ii) violated any law or regulation applicable to the Company or any policy
or procedure of the Company and such violation has adversely impacted the
Company's business or reputation, the Compensation Committee will report such
determination to the Company's Board of Directors. In such an instance, the
Board of Directors may, in its discretion and in addition to any other
recoupment under this Policy, recover, and the employee will forfeit or repay,
all of the employee's Awards for the relevant period, plus a reasonable rate
of interest.
Taxes. Should any repayment obligation under this Policy trigger income tax penalties to the employee, the employee will be solely liable for the payment of any such taxes.
Interpretations of and Changes to the Policy. This Policy is intended to be interpreted in a manner consistent with any applicable rules or regulations adopted by the Securities and Exchange Commission or The NASDAQ Stock Market and any other applicable law and will be interpreted by the Board of Directors, whose interpretation of this Policy will be final. The Company reserves the right to adopt changes, amendments or interpretations of this Policy and any such changes, amendments or interpretations will immediately be applicable to all Awards covered by this Policy from its initial date of adoption. This Policy will not apply to the extent that such application would violate any applicable state law that is not preempted by federal law.
Not Exclusive Remedy. The recoupment of Awards pursuant to this Policy will not in any way limit or affect the Company's right to pursue disciplinary action or dismissal, take legal action or pursue any other available remedies. This policy does not replace and is in addition to any rights of the Company to recoup Awards from its employees under applicable laws and regulations, including but not limited to the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Incorporation of Policy. Each recipient of an Award from the Company will execute an acknowledgement providing that any Awards granted to such recipient on or after the effective date of this Policy are subject to this Policy. Additionally, the Company, in its discretion, may incorporate the requirements of this Policy into any applicable award statement, award agreement or terms and conditions of any Awards made by the Company following the adoption of this Policy.
DIAMOND HILL INVESTMENT GROUP, INC.
COMPENSATION RECOUPMENT AND RESTITUTION POLICY
ACKNOWLEDGEMENT AND AGREEMENT
THIS COMPENSATION RECOUPMENT AND RESTITUTION POLICY ACKNOWLEDGEMENT AND AGREEMENT (this "Agreement") is entered into as of the ___day of _______, 2013, between Diamond Hill Investment Group, Inc. (the "Company") and _______________________ (the "Employee").
RECITALS:
A. The Employee is an employee of the Company or its affiliates;
B. The Company's Board of Directors has adopted the Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy (the "Policy"); and
C. In consideration of and a condition to receipt of future annual cash and stock-based awards, performance-based compensation and other forms of cash or equity compensation made under the Company's 2011 Equity and Cash Incentive Plan and any other plans or programs adopted by the Company after the date of this Agreement (collectively, "Awards"), the Employee and the Company are entering into this Agreement.
The Company and the Employee agree as follows:
1. The Employee acknowledges receipt of the Policy. A copy of the Policy is attached to this Agreement as Annex A and is incorporated into this Agreement by reference. The Employee has read and understands the Policy and has had the opportunity to ask questions to the Company regarding the Policy.
2. The Employee acknowledges and agrees that the Policy shall apply to any and all Awards granted to the Employee after the date of this Agreement, that all such Awards are subject to adjustment or recoupment under the Policy. The Employee also agrees that any applicable award agreement, award statement or terms and conditions relating to any future Awards made to the Employee will be deemed to include the restrictions imposed by the Policy.
3. The recoupment or restitution of Awards pursuant to the Policy and this Agreement will not in any way limit or affect the Company's right to pursue disciplinary action or dismissal, take legal action or pursue any other available remedies available to the Company. This Agreement and the Policy do not replace, and are in addition to, any rights of the Company to recoup Awards from its employees under applicable laws and regulations, including, but not limited to, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act.
4. The Employee acknowledges and agrees that the Employee's execution of this Agreement is in consideration of, and is a condition to, the receipt by the Employee of future Awards from the Company; provided, however, that nothing in this Agreement will be deemed to obligate the Company to make any Awards to the Employee in the future.
5. The Employee agrees and acknowledges that the Company, in its sole discretion, may amend or restate the Policy from time to time after the date of this Agreement, and the Policy, as amended or restated, will apply to all Awards after the date of this Agreement. The Company will provide to the Employee a copy of the Policy as it may be amended or restated.
6. This Agreement will be governed by and construed in accordance with the laws of the State of Ohio, without regard to the laws of Ohio that would result in the application of the laws of any other state. The parties to this Agreement expressly agree that any legal action arising out of this Agreement shall be filed and maintained only in a state or federal court of competent jurisdiction in Franklin County, Ohio, and each party consents to such jurisdiction. This Agreement may be executed in two or more counterparts, and by facsimile and electronic transmission (including by .pdf), each of which will be deemed to be an original but all of which, taken together, shall constitute one and the same Agreement.
7. This Agreement is binding upon and will benefit the parties and their personal representatives, heirs, successors and assigns.
IN WITNESS WHEREOF, the Company and the Employee have executed this Compensation Recoupment and Restitution Policy Acknowledgement and Agreement as of the date first written above.
EMPLOYEE: _________________________
Print Name: _______________________
COMPANY:
Diamond Hill Investment Group, Inc.
By: _________________________
Name: _________________________
Title: _________________________
ANNEX A
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Diamond Hill Investment Group, Inc. Compensation Recoupment and Restitution Policy