UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
December 21, 2017 (December 19, 2017)
DYNEGY INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-33443 |
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20-5653152 |
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(State or Other Jurisdiction |
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(Commission |
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(I.R.S. Employer |
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of Incorporation) |
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File Number) |
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Identification No.) |
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601 Travis, Suite 1400, Houston, Texas |
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77002 |
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(Address of principal executive offices) |
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(Zip Code) |
(713) 507-6400
(Registrants’ telephone number, including area code)
N.A.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Compensatory Arrangements of Certain Officers
As previously disclosed, Dynegy Inc. (“Dynegy”) and Vistra Energy Corp. (“Vistra Energy”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) whereby, upon the terms and subject to the conditions set forth in the Merger Agreement, Dynegy will merge with and into Vistra Energy (the “Merger”).
In connection with the Merger, certain executive officers of Dynegy (including its current named executive officers) may become entitled to payments and benefits that may be treated as “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (“Section 280G”). To mitigate the potential impact of Section 280G on Dynegy and the named executive officers, on December 19, 2017, Dynegy’s Board of Directors approved (i) payment during 2017 of 75% of the annual bonus that it presently expects would otherwise be paid to each respective named executive officer in early 2018 and (ii) the immediate vesting and settlement of 173,650 restricted stock units previously granted to Robert Flexon, Dynegy’s President & Chief Executive Officer, and 3,854 restricted stock units previously granted to Henry Jones, Dynegy’s Executive Vice President & Chief Commercial Officer. Those restricted stock units were granted in 2015 and were otherwise scheduled to vest, in the case of Mr. Flexon, on March 3, 2018 and April 20, 2018, and, in the case of Mr. Jones, on March 3, 2018. Also, on December 19, 2017, Dynegy entered into an acknowledgment (the “Acknowledgment”), the form of which is attached hereto as Exhibit 10.1, with the named executive officers. Each named executive officer agreed to repay the accelerated annual bonus payment amounts to the extent it is subsequently determined that the right to payment would have been forfeited before payment otherwise would have been made in the ordinary course.
The foregoing description of the Acknowledgment does not purport to be complete and is qualified in its entirety by reference to the form of such Acknowledgment, which is filed hereto as Exhibit 10.1, and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
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Exhibit
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Document |
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10.1 |
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Form of Acknowledgment between Dynegy Inc. and certain executive officers |
EXHIBIT INDEX
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Exhibit
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Document |
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10.1 |
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Form of Acknowledgment between Dynegy Inc. and certain executive officers |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: December 21, 2017 |
DYNEGY INC. |
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(Registrant) |
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By: |
/s/ Catherine C. James |
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Name: |
Catherine C. James |
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Title: |
Executive Vice President and General Counsel |
[Form of Acknowledgment]
December [ ], 2017
Private & Confidential
[Name]
c/o Dynegy Inc.
601 Travis Street, Suite 1400
Houston, Texas 77002
Re: Section 280G Mitigation Acknowledgment
Dear [ ]:
Your continued services and loyalty to Dynegy Inc. (the “ Company ”) are very important to the Company. I am therefore pleased to inform you that, pursuant to the terms of this letter agreement (the “ Acknowledgment ”), the Company will take certain compensatory actions that may mitigate the effect of Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, subject to the terms set forth herein. Those actions are intended to incentivize you to contribute towards the successful completion of the contemplated merger with Vistra Energy Corp. (the “ Merger ”) and to continue to use your best efforts to ensure optimal corporate performance through the closing of the Merger.
Accordingly, in consideration of the mutual promises and covenants hereinafter set forth, it is hereby agreed as follows:
1. 2017 Annual Incentive Bonus .
(a) Assuming your continued employment with the Company or its affiliates through December 29, 2017, on such date the Company will pay you an amount in respect of your 2017 annual incentive bonus equal to [$ ] (the “ Accelerated Annual Bonus Amount ” and such date, the “ Pre-Payment Date ”), less applicable tax and other withholdings. Your Accelerated Annual Bonus Amount is equal to [ ]% of your target annual incentive bonus for 2017.
(b) In the event that the Board of Directors of the Company or a committee thereof determines that the annual incentive bonus that would become payable to you based on the actual level of achievement of the applicable service and performance metrics (the “ Final Annual Bonus Amount ”) differs from the Accelerated Annual Bonus Amount (including by virtue of your forfeiture of eligibility for such an annual incentive bonus, in which case the Final Annual Bonus Amount shall be deemed to be $0), you will (i) if the Final Annual Bonus Amount exceeds the Accelerated Annual Bonus Amount, be paid such excess amount by the Company in accordance with the otherwise applicable terms of the applicable Company annual incentive bonus plan or (ii) if the Accelerated Annual Bonus Amount exceeds the Final Annual Bonus Amount, repay such excess amount to the Company on an after-tax basis within fifteen (15) business days following such determination.
2. Acceleration of Equity . Effective December 29, 2017 (the “ Equity Acceleration Date ”), notwithstanding the provisions of the applicable award agreements, the Company shall
accelerate the vesting and settlement of the restricted stock unit awards held by you as set forth on Appendix A hereto (the “ Accelerated Restricted Stock Units ”).
3. Further Acknowledgements . By executing this Acknowledgment:
(a) You agree to maintain the confidentiality of this Acknowledgment to the extent its terms have not been publicly disclosed by the Company and to refrain from disclosing or making reference to its terms, except (i) as required by law, (ii) with your accountant or attorney for the sole purposes of obtaining, respectively, financial or legal advice, or (iii) with your immediate family members (the parties in clauses (ii) and (iii), “ Permissible Parties ”); provided , the Permissible Parties agree to keep the terms and existence of this Acknowledgment confidential to the extent otherwise required hereby.
(b) You agree that in the event that you are required to but fail to repay any amount pursuant to Paragraph 1(b) of this Acknowledgment, you will reimburse the Company for any reasonable fees (including reasonable attorneys’ fees) or costs it incurs in connection with seeking the repayment of such amount.
(c) You acknowledge that you have read and understood this Acknowledgment, are fully aware of its legal effect, have not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and have entered into this Acknowledgment freely based on your own judgment. You acknowledge that you have had the opportunity to consult with legal counsel of your choice in connection with your execution of this Acknowledgment. You acknowledge that you have been advised to consult with your tax advisor regarding the tax consequences of this Acknowledgment, including the tax consequences if you are required to repay any amounts to the Company pursuant to this Acknowledgment.
4. Miscellaneous .
(a) This Acknowledgment may be signed in counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.
(b) This Acknowledgment shall be binding upon and shall inure to the benefit of the Company, its successors and permitted assigns.
(c) Neither this Acknowledgment, nor any modification thereof, nor the payment of any benefits or any other action or omission taken subject hereto shall be construed as giving you, or any person whomsoever, the right to be retained in the service of the Company or its affiliates. Except to the extent provided under an employment agreement with the Company, your employment with the Company or its affiliates is “at-will,” meaning that either you or the Company may terminate your employment at any time and for any reason.
(d) This Acknowledgment shall be governed by and construed and enforced in accordance with the laws of the state of Texas applicable to contracts executed in and to be performed entirely within such State, without giving effect to the conflict of law principles thereof.
(e) The provisions of this Acknowledgment shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
(f) The headings and captions in this Acknowledgment are provided for reference and convenience only, shall not be considered part of this Acknowledgment, and shall not be employed in the construction of this Acknowledgment.
(g) This Acknowledgment constitutes the entire agreement between you and the Company with regard to the subject matter hereof and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between you and the Company with respect to the subject matter hereof.
If you accept the terms and conditions of this Acknowledgment, please sign one of the two enclosed copies and return it to the undersigned on or before December 26, 2017.
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Yours sincerely, |
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Name: |
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Title: |
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ACKNOWLEDGED AND AGREED: |
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Signature: |
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Date: December , 2017 |
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Name: |
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APPENDIX A
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Grant Number |
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Grant Date |
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Original Vesting Date |
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Number of Shares Accelerated |
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