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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): February 1, 2023
LIMBACH HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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| Delaware | 001-36541 | 46-5399422 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
797 Commonwealth Drive, Warrendale, Pennsylvania 15086
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (412) 359-2100
Not Applicable
(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:
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| ☐ | | 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)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, $0.0001 par value | LMB | The Nasdaq Stock Market LLC |
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 ☐
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. ¨
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 1, 2023, Limbach Holdings, Inc. (the “Company”) implemented the use of the Limbach Facility Services LLC Performance Award Summary for the Corporate Senior Management Short Term Incentive Plan (“STIP”) cash bonus (the “Award Summary”) in the form which is filed as Exhibit 10.1 to this Current Report on Form 8-K. This Award Summary is utilized for the annual STIP for senior executives, including the executive officers of the Company (as defined in Rule 3b-7 of the Securities Exchange Act of 1934, as amended). Under the Award Summary and the STIP these senior officers are eligible to participate and receive an annual cash performance-based bonus. The bonus amount is based on the Company’s performance relative to the Company’s adjusted EBITDA for the fiscal year (subject to certain minimum and maximum amounts) and based on a percentage of the officer’s annual base salary earned during the year. The purpose of the Award Summary and STIP are to maintain a competitive level of total cash compensation and to align the interests of the Company’s executives with those of the Company’s stockholders and with the strategic objectives of the Company.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the complete text of the aforementioned document, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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| Exhibit No. | | Description |
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| 104 | | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) |
SIGNATURE
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.
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| | LIMBACH HOLDINGS, INC. | |
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| | By: | /s/ Jayme L. Brooks | |
| | | Name: Jayme L. Brooks | |
| | | Title: Chief Financial Officer | |
Dated: February 3, 2023
LIMBACH FACILITY SERVICES LLC1
Performance Award Summary - Corporate Senior Management
Short Term Incentive Plan (STIP) – Cash Bonus
Objectives and Key Performance Indicators
January 1, 20XX to December 31, 20XX
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| Name: | | | Date: |
Adjusted EBITDA Measure | Weighting = 100% |
oAdjusted EBITDA Award % (GE%) = As detailed below: Performance Goals and Payout as a % of allocated Incentive Target |
| Performance Goal | Payout % of Incentive Target | |
| <$XX.XM Adjusted EBITDA | 0% | |
| $XX.XM to $XX.XM | 25 - 100%2 | |
| >$XX.XM to $XX.XM | 100 - 180%3 | |
Potential Bonus Award: Calculation of the Executive’s bonus award will be made pursuant to this Performance Award Summary as follows.
| | | | | |
| Annual Base Salary (BS) | $ XX |
| Potential Incentive (as a % of Annual Base Salary) (PI%) | XX % |
Final Incentive Earned: [Team] Adjusted EBITDA Component (100%): PI%4 x GE%5 = XX % x BS | $ XX |
Minimum Performance Conditions: The Company must achieve the following level of performance before any 20XX cash bonuses are paid under this Award Summary:
oThe Company’s Adjusted EBITDA must be at least $XX.XM in 20XX
oThe Company must be in compliance with all Bank Covenants at December 31, 20XX through the Completion of the Annual Audit.
Payments:
oPayments of any cash bonus payable under this Award Summary will be made following the Completion of the Annual Audit and the receipt of formal approval from the Compensation Committee.
oSubject to Section 409A (as defined in the Additional Terms) and any other legal requirements, once earned and Compensation Committee approval is obtained, the Company may determine to pay the approved bonus in installment payments if in the determination of the Company’s Chief Executive Officer and/or the Compensation Committee that because of the Company’s cash
1 A subsidiary of the Company
2 Done by linear interpolation
3 Done by linear interpolation
4 Expressed as a %
5 Actual GE% as determined by Adjusted EBITDA performance achieved as confirmed through the Completion of the Annual Audit
position, liquidity or otherwise, it would be in the best interest of the Company and its stockholders for the payments to be made in installments. The Company will provide notice to the employee if the payments are to be made in installments.
oPayments will be issued via the Company’s normal payroll practice and are subject to all applicable payroll deductions and tax withholdings.
This Award Summary is also governed and will be construed in accordance with the Limbach Facility Services LLC Performance Award Summary - Corporate Senior Management Short Term Incentive Plan (STIP) Cash Bonus Additional Terms (the “Additional Terms”) attached hereto as Exhibit A, and such Additional Terms are incorporated herein by reference.
This Award Summary and the Additional Terms establishes the conditions of your annual STIP opportunity. The overall Company 20XX business plan has been assembled assuming the Company can deliver Adjusted EBITDA as set forth herein, which allows the Company to fully fund the STIP. As an executive of the Company, the employee is responsible to support the achievement of the Company's overall financial goals.
EXHIBIT A
LIMBACH FACILITY SERVICES LLC6
Performance Award Summary - Corporate Senior Management
Short Term Incentive Plan (STIP) – Cash Bonus Additional Terms
Termination: The portion of the cash bonus otherwise payable under the Award Summary would be payable to the employee if the employee is terminated by the Company or one of its subsidiaries other than for “Cause” during the year. The amount payable will be based upon the termination month forecast figures as determined by the Company in its sole discretion. Example: if an employee is terminated on June 30th, that employee would be entitled to 50% of the bonus based upon the latest monthly full year forecast projections. Except as noted above in this paragraph, if the employee’s employment with the Company or one of its subsidiaries is terminated, no amounts under the Award Summary shall be payable to the employee unless otherwise agreed to by the Company in a writing executed by an authorized representative of the Company or one of its subsidiaries. Nothing in the Award Summary shall confer upon any employee the right to continue in the employ of the Company or any of its subsidiaries or affect any right which the Company or its subsidiaries may have to terminate such employment.
Administration: The Compensation Committee shall have the full power to construe and interpret the Award Summary (and any bonus paid hereunder) in its sole discretion, including exercising any and all authority and responsibility given to the Company in this document. Without limiting the foregoing, the Compensation Committee shall have the power to establish or amend any rules or administrative procedures necessary or appropriate for the Award Summary.
Non-Assignability and Accounting: The right to any bonus under the Award Summary is not assignable in any manner whatsoever (except to the extent of a beneficiary designation made pursuant to established administrative procedures). No employee may create a lien or any other encumbrance on any present or future interest he or she may have under the Award Summary.
Additional Limitations (Clawbacks): The Award Summary and any bonus paid under the Award Summary will be administered in compliance with Section 10D of the Securities Exchange Act of 1934, as amended, any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which shares of the Company may be traded, and any Company policy adopted with respect to compensation recoupment, to the extent the application of such rules, regulations and/or policies is permissible under applicable local law. This provision will not be the Company’s exclusive remedy with respect to such matters.
Severability: The Award Summary (including any rules or administrative procedures established hereunder and this Exhibit A) represents the full and complete understanding between the Company and the employee with regard to terms of the Award Summary and any bonus payable hereunder. The terms of the Award Summary (including any rules or administrative procedures) shall control in the event of inconsistencies with any other Company documents or any statements made by Company employees concerning the Award Summary.
If a final determination is made by a court of competent jurisdiction that any provision contained in the Award Summary is unlawful, the Award Summary shall be considered amended in that instance to apply to such extent as the court may determine to be enforceable, but only to the extent consistent with the original intent of the drafter. Alternatively, if such a court finds that any provision contained in the Award Summary is unlawful -- and that provision cannot be amended, consistent with the original intent of the drafter, so as to make it lawful -- such finding shall not affect the effectiveness of any other provision of the Award Summary.
6 A subsidiary of the Company
Applicable Law: The place of administration of the Award Summary shall be deemed within the State of Delaware. The Award Summary shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions therein, to the extent permissible under applicable local law.
The Award Summary and the bonus payable under the Award Summary is intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). In each case, the Award Summary shall be administered and interpreted in a manner consistent with such intent, including in a manner that avoids the imposition of penalties under Section 409A.
Defined Terms:
“Adjusted EBITDA” is defined as the Company’s net income plus depreciation and amortization expense, interest expense, and taxes, as further adjusted to eliminate the impact of, when applicable, other non-cash items or expenses that are unusual or non-recurring that the Company’s Board of Directors believe do not reflect the Company’s core operating results. For the purposes of the Award Summary Adjusted EBITDA will be determined by the Compensation Committee in its sole discretion.
“Bank Covenants” means the covenants contained in any agreements, instruments or documents under which the Company or its subsidiaries have or are permitted to borrow funds, the compliance of which will be determined by the Company’s Compensation Committee or its designee in the Compensation Committee’s sole discretion.
“Compensation Committee” means the Compensation Committee of the Company’s Board of Directors.
“Completion of the Annual Audit” means that the Company’s registered independent public accounting firm has completed its audit of the Company’s financial statements for the relevant year as determined by the Compensation Committee.
“Company” means Limbach Holdings, Inc., a Delaware corporation and/or its successors and assigns.
“Cause” has the same meaning ascribed to it under the Limbach Holdings, Inc. Amended and Restated Omnibus Incentive Plan, as then amended.