Vivint Solar, Inc. (NYSE:VSLR) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Chief Executive Officer
On December14, 2016, the Board of Directors (the Board) of Vivint
Solar, Inc. (the Company) appointed David Bywater as the Companys
President and Chief Executive Officer on a permanent basis. to
the Offer Letter (as defined below), Mr.Bywater will also be
appointed to fill a vacancy on the Board. It is anticipated that
such appointment will be made at the next regularly scheduled
meeting of the Board. Mr.Bywater had been serving as the Companys
Interim Chief Executive Officer since May2, 2016.
Prior to being appointed as the Companys Interim Chief Executive
Officer, David Bywater, age 47, served as the Chief Operating
Officer of APX Group, Inc. (APX), the parent company of Vivint,
Inc.,since July 2013. Before joining APX, Mr.Bywater served as
Executive Vice President and Corporate Officer for Xerox, and was
the Chief Operating Officer of its State Government Services from
2010toJuly 2013. Prior to that, from 2003 to 2010, Mr.Bywater
worked at Affiliated Computer Services (ACS), where, during his
tenure, he managed a number of their business units. ACS was
acquired by Xerox in 2010. From 1999 to 2003, Mr.Bywater was a
senior manager at Bain Company.
In connection with Mr.Bywaters appointment, the Company and
Mr.Bywater entered into a letter agreement (the Offer Letter), to
which Mr.Bywater will serve as the Companys Chief Executive
Officer effective as of December14, 2016 (the Start Date). The
Offer Letter does not have a specific term and provides that
Mr.Bywater is an at-will employee.
Under the terms of the Offer Letter, Mr.Bywater will be entitled
to the following payments and benefits:
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An annual base salary equal to $660,000, with eligibility for annual target incentive payments equal to $650,000. For 2016, Mr.Bywaters annual bonus amount will be equal to $346,667. |
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A signing bonus in the amount of $166,667, payable within 30 days of the Start Date. |
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An equity award comprised of (1)an option to purchase shares of common stock of the Company with a grant date fair value of $1,025,000, subject to an exercise price equal to the closing price per share of the Company on the date of grant, and (2)restricted stock units with a grant date fair value of $1,025,000. Each component of the equity award shall vest on a four year schedule, with 25% vesting on December6, 2017, and an additional 6.25% of the total number of shares subject to each award will vest on a quarterly basis thereafter until each award is fully vested, in each case subject to Mr.Bywaters continued service with the Company or any subsidiary of the Company through each vesting date. The option award, to the extent vested, shall remain outstanding and exercisable for 180 days following a termination of Mr.Bywaters employment by the Company without cause (as defined in the Companys 2014 Equity Incentive Plan, and the award agreement entered into in connection with the award of options). The equity awards shall otherwise be subject to the standard terms and conditions of the Companys 2014 Equity Incentive Plan, and the award agreements entered into thereto. |
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Beginning with the Companys annual grant cycle in 2018, and each year thereafter, the Company expects but is not obligated to grant Mr.Bywater long-term incentive awards under the 2014 Equity Incentive Plan with an aggregate grant date fair value equal to or greater than $2,000,000, subject to approval of the board of directors or an authorized committee at such time. |
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Mr.Bywater will be provided with the use of a leased company vehicle, a gas card paid by the Company, an individual excess employee liability insurance policy, and membership dues paid by the Company, at a country club of Mr.Bywaters choosing. |
In addition, the Company entered into an involuntary termination
protection agreement with Mr.Bywater that provides for the
severance benefits described below.
If Mr.Bywaters employment is terminated either by the Company
without cause (other than by reason of death or disability) or by
Mr.Bywater for good reason (as such terms are defined in his
involuntary termination protection agreement), and in each case
the termination occurs outside of the period beginning six months
prior to and ending 18 months following a change of control (as
defined in his involuntary termination protection agreement, and
such period, the Change of Control Period), Mr.Bywater will
receive the following severance benefits:
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an amount equal to 1.5x the sum of (1)Mr.Bywaters base |
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annual performance bonus in effect for the fiscal year in |
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an amount equal to the pro-rata portion of the annual bonus paid to Mr.Bywater in respect of the fiscal year ending immediately prior to the fiscal year in which Mr.Bywaters employment is terminated, which will be paid to Mr.Bywater in equal installments over a period of 18 months following the date of termination; and |
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continuing payments to reimburse Mr.Bywater for COBRA continuation coverage for a period of up to 18 months, or, if such reimbursements would result in an excise tax, a lump sum payment of $36,000 in lieu of such reimbursements. |
If Mr.Bywaters employment is terminated either by the Company
without cause (other than by reason of death or disability) or by
Mr.Bywater for good reason, and in each case the termination
occurs during the Change of Control Period, Mr.Bywater will
receive the following severance benefits:
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a lump sum payment of an amount equal to 2.0x the sum of (1)Mr.Bywaters base salary rate as then in effect, less $10,000, and (2)(a)if Mr.Bywater has been employed with the Company for at least one year as of the date of his termination of employment, the average of performance bonuses paid to Mr.Bywater for each year Mr.Bywater was employed by the Company during the three-year period immediately preceding the date of Mr.Bywaters termination, or (b)if Mr.Bywater has been employed with the Company for less than one year as of the date of his termination, Mr.Bywaters target annual performance bonus in effect for the fiscal year in which the termination occurs; |
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a lump sum payment equal to the pro-rata portion of the annual performance bonus that would have been paid to Mr.Bywater had Mr.Bywater been employed by the Company for the entire fiscal year in which Mr.Bywaters employment was terminated, based on actual performance for such fiscal year and assuming that any performance objectives that are based on individual performance are achieved at target levels; |
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50% of Mr.Bywaters then-outstanding equity awards will immediately vest and become exercisable and, with respect to equity awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at target levels; and |
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continuing payments to reimburse Mr.Bywater for COBRA continuation coverage for a period of up to 18 months, or lump sum payment of $36,000 in lieu of such reimbursements. |
In order to receive the severance benefits, Mr.Bywater must sign
and not revoke a release of claims in the Companys favor and
comply with certain restrictive covenants relating to
noncompetition, nonsolicitation, and nondisparagement for a
period of 12 months following the date of his termination.
In the event any of the payments provided for under this
agreement or otherwise payable to Mr.Bywater would constitute
parachute payments within the meaning of Section280G of the
Internal Revenue Code and could be subject to the related excise
tax under Section4999 of the Internal Revenue Code, he would be
entitled to receive either full payment of benefits or such
lesser amount which would result in no portion of the benefits
being subject to the excise tax, whichever results in the greater
amount of after-tax benefits to such executive. This agreement
does not require the Company to provide any tax gross-up
payments.
The foregoing descriptions of the Offer Letter and Mr.Bywaters
involuntary termination protection agreement do not purport to be
complete and are qualified in their entirety by reference to the
complete text of the Offer Letter and involuntary protection
termination agreement, which will be filed as exhibits to the
Companys annual report on Form 10-K for the year ending
December31, 2016.
Mr.Bywater also entered into an agreement of resignation with 313
Acquisition LLC (313 Acquisition), APX Group Holdings, Inc. and
APX. Mr.Bywater had been on a leave of absence from APX while
serving as the Companys Interim Chief Executive Officer.
Under the agreement of resignation, and in accordance with the
terms of the leave of absence agreement previously entered into
between APX, 313 Acquisition and Mr.Bywater, dated as of May2,
2016, Mr.Bywater will remain eligible to receive a prorated
annual bonus in respect of APX performance for the 2016 fiscal
year in an amount equal to $83,333.33.
Also under the agreement of resignation, Mr.Bywater will forfeit
225,000 time-vesting profits interests in 313 Acquisition (all
such profits interests, Class B Units), which were granted to
Mr.Bywater under the Amended and Restated 313 Acquisition LLC
Unit Plan. In addition, 313 Acquisition and Mr.Bywater agreed to
the following modifications to his Class B Units:
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After Mr.Bywaters date of resignation, 63,334 time-vesting Class B Units shall become vested. |
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Mr.Bywaters remaining 2.0x and 3.0x exit-vesting Class B |
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hurdles set forth in the applicable subscription agreement |
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If Blackstone ceases to have an equity interest in 313 Acquisition, or, if earlier, Mr.Bywater ceases to be an employee of the Company other than as a result of a specified qualifying termination, all of his unvested 2.0x and 3.0x exit-vesting Class B Units shall be forfeited without consideration. |
For the purposes of Mr.Bywaters Class B Units, a specified
qualifying termination consists of a termination by the Company
of Mr.Bywaters employment with the Company without cause, and not
due to his death or disability (each as defined for the purposes
of the Companys 2014 Equity Incentive Plan). The modifications to
Mr.Bywaters Class B Units are subject to a release of claims by
Mr.Bywater.
Payments and benefits provided under the agreement of resignation
remain subject to Mr.Bywaters continued compliance with the
restrictive covenants set forth in Mr.Bywaters previously entered
into employment agreement with APX, and in the applicable
subscription agreement, including provisions regarding
non-disclosure of confidential information, non-competition,
non-disparagement and non-solicitation of customers and employees
of APX.
| Item7.01 | Regulation FD Disclosure |
On December19, 2016, the Company issued a press release
announcing Mr.Bywaters appointment as Chief Executive Officer, a
copy of which is attached hereto as Exhibit 99.1
The information in this Item7.01, including Exhibit99.1, is being
furnished and shall not be deemed filed for purposes of Section18
of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section, nor shall it be
deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, whether made before or after the date
hereof, except as expressly set forth by specific reference in
such filing
| Item9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
to the rules and regulations of the Securities and Exchange
Commission, the attached exhibit is deemed to have been furnished
to, but not filed with, the Securities and Exchange Commission:
| ExhibitNumber | Description | |
| 99.1 | Vivint Solar, Inc. Press Release dated December 19, 2016 |
About Vivint Solar, Inc. (NYSE:VSLR)
Vivint Solar, Inc. primarily offers distributed solar energy, which is electricity generated by a solar energy system installed at or near customers’ locations to residential customers based on over 20-year contracts. The Company operates through two operating segments: Residential, and commercial and industrial market (C&I). Through its investment funds, the Company owns an interest in the solar energy systems the Company installs, and ownership of the solar energy systems allows it and the other fund investors to benefit from various local, state and federal incentives. The Company has a process that enables it to design and install a custom solar energy system that delivers customer savings. The Company is a licensed contractor in the markets the Company serves and is responsible for each customer installation. Upon completion, the Company schedules the required inspections and arranges for interconnection to the power grid. Vivint Solar, Inc. (NYSE:VSLR) Recent Trading Information
Vivint Solar, Inc. (NYSE:VSLR) closed its last trading session up +0.10 at 3.00 with 315,078 shares trading hands.
