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): | May 4, 2016 |
Cogent Communications Holdings, Inc.
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(Exact name of registrant as specified in its charter)
| Delaware | 000-51829 | 46-5706863 |
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(State or other jurisdiction |
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(Commission |
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(I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
| 2450 N St NW, Washington, District of Columbia | 20037 | |
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(Address of principal executive offices) |
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(Zip Code) |
| Registrant’s telephone number, including area code: | 202-295-4274 |
Not Applicable
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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 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))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 4, 2016, the Board of Directors made awards of restricted stock to the executive officers of the Company pursuant to the Company’s 2004 Incentive Award Plan, as amended.
David Schaeffer, Chairman of the Board, President and Chief Executive Officer of the Company, received an award of 170,000 shares of restricted stock. A portion of the grant, 120,000 shares, will vest in monthly increments of 10,000 shares starting on January 1, 2019 continuing through December 1, 2019. The remaining portion of the grant, 50,000 performance shares will vest in March 2020, after the annual report on Form 10-K for 2019 is filed, based ratably on the Company achieving 15% revenue growth and 20% EBITDA as adjusted growth for the full year 2019. The stock will fully vest on an earlier date if a change of control occurs. The terms and conditions of the grant are set forth in the grant award document filed herewith as Exhibit 10.1.
Each senior Vice President received an award between 12,000 and 24,250 shares of restricted stock, as noted in the table below. Twenty percent of the grant will vest in quarterly increments in March, June, September and December 2019. The remaining twenty percent of the grant will be performance shares that vest on December 31, 2019 based on attainment of customer satisfaction goals. The stock will fully vest on an earlier date if a change of control occurs. The terms and conditions of the grant are set forth in the grant award document filed herewith as Exhibit 10.2.
Name: Robert Beury
Shares Granted: 12,000
Shares Vesting each Quarter: 2,400
Performance Shares: 2,400
Vest Start Date: March 1, 2019
Name: James Bubeck
Shares Granted: 12,000
Shares Vesting each Quarter: 2,400
Performance Shares: 2,400
Vest Start Date: March 1, 2019
Name: Timothy O’Neill
Shares Granted: 12,000
Shares Vesting each Quarter: 2,400
Performance Shares: 2,400
Vest Start Date: March 1, 2019
Name: Thaddeus Weed
Shares Granted: 24,250
Shares Vesting each Quarter: 5,000
Performance Shares: 4,250
Vest Start Date: March 1, 2019
Item 5.07 Submission of Matters to a Vote of Security Holders.
On May 4, 2016, the Company held its 2016 Annual Meeting of Stockholders at 2450 N Street NW, Washington, DC 20037. Out of 45,265,999 shares outstanding and authorized to vote at the Annual Meeting as of the record date of March 8, 2016, proxies representing 42,904,986 shares, or more than 94.78% of outstanding shares, were voted.
Under the first proposal, the following nominees were elected to the Company’s Board of Directors, each to hold office until his successor is elected and qualified, in the amounts noted below:
David Schaeffer: FOR: 40,592,640; WITHHELD: 290,428
Steven D. Brooks: FOR: 25,064,468; WITHHELD: 15,818,600
Timothy Weingarten: FOR: 25,091,690; WITHHELD: 15,791,378
Richard T. Liebhaber: FOR: 40,605,925; WITHHELD: 277,143
D. Blake Bath: FOR: 40,607,414; WITHHELD: 275,654
Marc Montagner: FOR: 39,929,654; WITHHELD: 953,504
Broker non-votes for the first proposal were 2,021,918 shares.
Stockholders approved the second proposal, ratifying the appointment of Ernst & Young, LLP as the Company’s independent registered public accountants for the fiscal year ending December 31, 2016. The vote on this second proposal was as follows: FOR: 42,769,008; AGAINST: 132,417; ABSTAIN: 3,561.
Stockholders approved the third proposal, an advisory vote concerning executive compensation. The vote on this third proposal was as follows: FOR: 22,008,365; AGAINST: 18,667,607; ABSTAIN: 207,096. Broker non-votes for this third proposal were 2,021,918 shares.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
Number Description
10.1 Restricted Stock Award, dated as of May 4, 2016, between the Company and David Schaeffer (filed herewith).
10.2 Form of Restricted Stock Award, dated as of May 4, 2016, between the Company and the Vice President named executive officers (filed herewith).
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
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.
| Cogent Communications Holdings, Inc. | ||||
| May 5, 2016 | By: |
David Schaeffer
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| Name: David Schaeffer | ||||
| Title: President & CEO | ||||
Exhibit Index
Exhibit No.
Description
Restricted Stock Award, dated as of May 4, 2016, between the Company and David Schaeffer (filed herewith).
Form of Restricted Stock Award, dated as of May 4, 2016, between the Company and the Vice President named executive officers (filed herewith).
EXHIBIT 10.1
RESTRICTED STOCK AWARD
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Name: Dave Schaeffer
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Cogent Communications Holdings, Inc. | |
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Grant Date: May 4, 2016
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2004 Incentive Award Plan (the “Plan”) | |
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1. Grant: Effective as of the Grant Date specified above you have been granted 170,000 (one hundred seventy thousand) shares of common stock $.001 par value (the “Restricted Stock”) of Cogent Communications Holdings, Inc. (the “Company”) subject to the vesting requirement described below.
2. Normal Vesting : You will become vested in 10,000 of the shares of Restricted Stock on January 1, 2019 and in an additional 10,000 of the shares of Restricted Stock on the first day of each month thereafter, with vesting full vesting of 120,000 shares completed on December 1, 2019. The remaining (50,000) shares of Restricted Stock shall vest on March 1, 2020 to the extent determined by the following calculation:
Executive shall be entitled to vest in up to 50,000 shares of Restricted Stock based on the growth of revenue and EBITDA, as adjusted (as defined in the company’s earnings releases), of Cogent Communications Holdings, Inc. between 2018 and 2019. The number of shares that will vest, if any, shall be calculated following filing of the company’s annual audited financial statements on Form 10-K for 2019. 25,000 shares of Restricted Stock will vest if revenue growth equals or exceeds 15% and, separately, another 25,000 shares of Restricted Stock will vest if EBITDA, as adjusted, growth equals or exceeds 20%. If the growth of the performance measure is less than the amount specified in the preceding sentence the bonus shall be reduced such that it is proportional to performance realized, e.g. if revenue growth is 7.5% then the bonus for revenue growth will be 12,500 shares. If the performance measure is zero or negative the number of shares that vest for that performance measure shall be zero.
3. Accelerated Vesting : Notwithstanding the foregoing, you will become fully vested upon the termination of your employment by reason of death, disability, or retirement. You will also become fully vested upon a Change of Control (even without termination of employment). If the accelerated vesting is due to a Change of Control the number the shares that vest in such event shall be limited to the number shares that when multiplied by the closing price of the Company’s common stock on May 4, 2016 yield a dollar value not in excess of three times your annual compensation on the date of the Change of Control. If the acceleration of vesting due to a Change of Control would trigger the excise tax provided for in Section 280G and 4999 of the U.S. Internal Revenue Code such vesting shall be delayed by a time sufficient to not trigger the excise tax. The shares for which vesting accelerates shall be allocated from the last shares to vest and the remaining unvested shares shall continue to vest under the normal vesting rule. Upon termination of employment other than as provided above you will forfeit any unvested shares of Restricted Stock that have not vested by the end of your severance period, i.e. you continue vesting during your severance period and lose the remaining unvested shares. Your severance period is the number of months compensation specified in your employment agreement for use in calculating your severance, e.g. 6 months or 12 months. In addition, the performance shares provided for above shall vest in the amount determined above even if your employment ceases after December 31, 2019 and on or before March 1, 2020 whether through your resignation or discharge. Change of Control has the meaning set forth in the Plan. Annual compensation means your average compensation as calculated for U.S. income tax purposes for the last three complete calendar years.
4. Nontransferable : The Restricted Stock or any interest or right therein or part thereof may not be disposed of by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), until vested, and any attempted disposition prior thereto shall be null and void and of no effect. The foregoing notwithstanding, transfers of the Restricted Stock may be permitted for estate planning purposes with the prior written consent of the Compensation Committee and subject in each case to the provisions of the Plan and the same restrictions and forfeiture provisions under this Agreement that the Restricted Stock had in your hands.
5. Dividends/Voting : You will be entitled to vote the shares of Restricted Stock. However, you will only be entitled to receive any dividends that are paid on shares of the Restricted Stock once they are vested. Any dividends paid on unvested shares of Restricted Stock shall be held by the Company, without interest thereon and paid to you at the time the shares of Restricted Stock on which such dividends were paid vest.
6. Certificates : The Company shall cause the Restricted Stock to be issued and a stock certificate or certificates representing the Restricted Stock to be registered in your name or held in book entry form, but if a stock certificate or certificates are issued, they shall be delivered to, and held in custody by the Company until the shares of Restricted Stock vest. You agree to give to the Company a stock power for all unvested shares of Restricted Stock. If issued, each such certificate will bear such legends as the Company may determine.
7. No Other Rights : The grant of Restricted Stock under the Plan is a one-time benefit and does not create any contractual or other right to receive an award of Restricted Stock or benefits in lieu of Restricted Stock in the future. Future awards of Restricted Stock, if any, will be at the sole discretion of the Company, including, but not limited to, the timing of the award, the number of shares and vesting provisions. The grant of Restricted Stock under the Plan does not entitle you to any rights to remain employed with the Company, nor does it constitute a contract of employment.
8. Miscellaneous: The shares of Restricted Stock are granted under and governed by the terms and conditions of the Plan, as may be amended from time to time. Defined terms used herein shall have the meaning set forth in the Plan, unless otherwise defined herein.
Cogent Communications Holdings, Inc.
By:
Robert Beury on behalf of the Board of Directors and the Compensation Committee
EXHIBIT 10.2
RESTRICTED STOCK AWARD
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Name: [Name of Vice President]
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Cogent Communications Holdings, Inc. | |
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Grant Date: May 4, 2016
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2004 Incentive Award Plan (the “Plan”) | |
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1. Grant: Effective as of the Grant Date specified above you have been granted shares of common stock $.001 par value (the “Restricted Stock”) of Cogent Communications Holdings, Inc. (the “Company”) subject to the vesting requirement described below.
2. Normal Vesting : You will become vested in of the shares of Restricted Stock on March 1, 2019 and in an additional of the shares of Restricted Stock on the first day of June, September, and December thereafter, with vesting of of all shares completed on December 1, 2019. The remaining of the shares of Restricted Stock shall vest on December 31, 2019 based on the attainment of customer satisfaction goals.
3. Accelerated Vesting : Notwithstanding the foregoing, you will become fully vested upon the termination of your employment by reason of death, disability, or retirement. You will also become fully vested upon a Change of Control (even without termination of employment). If the accelerated vesting is due to a Change of Control the number the shares that vest in such event shall be limited to the number shares that when multiplied by the closing price of the Company’s common stock on May 4, 2016 yield a dollar value not in excess of three times your annual compensation on the date of the Change of Control. If the acceleration of vesting due to a Change of Control would trigger the excise tax provided for in Section 280G and 4999 of the U.S. Internal Revenue Code such vesting shall be delayed by a time sufficient to not trigger the excise tax. The shares for which vesting accelerates shall be allocated from the last shares to vest and the remaining unvested shares shall continue to vest under the normal vesting rule. Upon termination of employment other than as provided above you will forfeit any unvested shares of Restricted Stock that have not vested by the end of your severance period, i.e. you continue vesting during your severance period and lose the remaining unvested shares. Your severance period is the number of months compensation specified in your employment agreement for use in calculating your severance, e.g. 6 months or 12 months. Change of Control has the meaning set forth in the Plan. Annual compensation means your average compensation as calculated for U.S. income tax purposes for the last three complete calendar years.
4. Nontransferable : The Restricted Stock or any interest or right therein or part thereof may not be disposed of by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), until vested, and any attempted disposition prior thereto shall be null and void and of no effect. The foregoing notwithstanding, transfers of the Restricted Stock may be permitted for estate planning purposes with the prior written consent of the Compensation Committee and subject in each case to the provisions of the Plan and the same restrictions and forfeiture provisions under this Agreement that the Restricted Stock had in your hands.
5. Dividends/Voting : You will be entitled to vote the shares of Restricted Stock. However, you will only be entitled to receive any dividends that are paid on shares of the Restricted Stock once they are vested. Any dividends paid on unvested shares of Restricted Stock shall be held by the Company, without interest thereon and paid to you at the time the shares of Restricted Stock on which such dividends were paid vest.
6. Certificates : The Company shall cause the Restricted Stock to be issued and a stock certificate or certificates representing the Restricted Stock to be registered in your name or held in book entry form, but if a stock certificate or certificates are issued, they shall be delivered to, and held in custody by the Company until the shares of Restricted Stock vest. You agree to give to the Company a stock power for all unvested shares of Restricted Stock. If issued, each such certificate will bear such legends as the Company may determine.
7. No Other Rights : The grant of Restricted Stock under the Plan is a one-time benefit and does not create any contractual or other right to receive an award of Restricted Stock or benefits in lieu of Restricted Stock in the future. Future awards of Restricted Stock, if any, will be at the sole discretion of the Company, including, but not limited to, the timing of the award, the number of shares and vesting provisions. The grant of Restricted Stock under the Plan does not entitle you to any rights to remain employed with the Company, nor does it constitute a contract of employment.
8. Miscellaneous: The shares of Restricted Stock are granted under and governed by the terms and conditions of the Plan, as may be amended from time to time. Defined terms used herein shall have the meaning set forth in the Plan, unless otherwise defined herein.
Cogent Communications Holdings, Inc.
By:
Dave Schaeffer
CEO