NewStar Financial, Inc. (NASDAQ:NEWS) 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 Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers. |
On March17, 2017, NewStar Financial, Inc. (the Company) entered
into a restated employment agreement (the Employment Agreement)
with John K. Bray, its Chief Financial Officer, to be effective
as the date thereof. The Employment Agreement restates Mr.Brays
previous employment agreement, dated as of October9, 2013, which
was scheduled to expire by its terms on April9, 2017.
Term and
Compensation. The initial term of the Employment
Agreement is for two years beginning March17, 2017, and may be
renewed for an additional period of one year automatically upon
the expiration of that term unless either party delivers to the
other a notice of intent not to renew the agreement. The
Employment Agreement sets Mr.Brays base salary at $450,000 per
year, unchanged from his current base salary, which salary may be
subject to increase on an annual basis as determined by the board
of directors, but will not be subject to any decrease.
Additionally, Mr.Bray is eligible to participate in such annual
incentive bonus programs as the board of directors may adopt from
time to time. The Company will establish a target for Mr.Brays
incentive bonus at the beginning of each year, provided that for
each year of the agreement term, the target will not be below his
target incentive bonus for 2017 of $750,000. If the Company does
not establish a target within 30 days of the start of each new
year, Mr.Brays target incentive bonus will be the same amount as
his last-established target incentive bonus. The target incentive
bonus is not a guarantee, and actual incentive bonus payments, if
any, will be determined by the Company in its sole discretion,
and will be based on Company, business and individual
performance. Incentive bonuses may include a mix of current-year
cash compensation, deferred cash compensation and equity
compensation in the Companys sole discretion. Mr.Brays
compensation under the Employment Agreement will be subject to
any forfeiture or clawback policy established by the Company for
senior executives generally from time to time and any other such
policy required by applicable law.
Termination Without
Cause of for
Good Reason. Under the
Employment Agreement, if he is terminated by the Company without
cause or if he terminates his employment for good reason, Mr.Bray
is entitled to a severance package that includes any accrued but
unpaid base salary through the date of termination, an amount
equal to the actual incentive bonus for the previous year
pro-rated for the period from the beginning of the then-current
year through the date of termination, as well as the continuation
of his base salary during a two-year severance period, two
times the amount of the actual incentive bonus for the previous
year, continued health benefits during the two years following
the date of termination, any accrued but unpaid vacation pay or
other benefits, continued vesting and exercisability of all
incentive equity and the remaining option term to exercise any
vested options. If a termination is without cause or for good
reason during the two-year period following a change in control,
Mr.Bray will be entitled to any accrued but unpaid base salary
through the date of termination, two times the amount of his then
base salary paid in a lump sum as soon as practicable, an amount
equal to his target incentive bonus for the then-current year
pro-rated for the period from the beginning of the then-current
year through the date of termination, two times the amount of his
target incentive bonus for the then-current year, continued
health benefits for two years following the date of termination
and any accrued but unpaid vacation pay or other benefits. In
addition, all of his incentive equity will vest and he will
receive the remaining option term to exercise any vested
options.
Termination
Due to Death
or Permanent
Disability. In the event of his employment being
terminated due to death or a permanent disability, Mr.Bray or his
legal representative is entitled to any accrued but unpaid base
salary, an amount equal to his target incentive bonus for the
then-current year pro-rated for the period from the beginning of
the then-current year through the date of termination, any
accrued but unpaid vacation pay or other benefits, an
acceleration of vesting of all incentive equity and a period of
the lesser of (A)two years, in the case of death, or one year, in
the case of permanent disability, following the date of
termination or (B)the remaining option term to exercise any
vested options.
Retirement.
If Mr.Bray retires, he will be entitled to any accrued but unpaid
base salary, an amount equal to his actual incentive bonus for
the previous year pro-rated for the period from the beginning of
the then-current year through the date of retirement, any accrued
but unpaid vacation pay or other benefits, continued vesting of
all incentive equity and a period equal to the full length of the
remaining option term to exercise any vested options.
Termination
for Cause or
Voluntary Termination
by the
Executive. In the event of his employment being
terminated by the Company for cause or voluntarily by him,
Mr.Bray will be entitled to receive only any accrued but unpaid
base salary and any accrued but unpaid vacation pay or other
benefits. In addition, any unvested incentive equity will be
forfeited for no consideration, and he will have the lesser of
(A)one year and (B)the remaining option term to exercise any
vested option.
Non-Competition
Covenant. Mr.Bray has agreed that during the
term of his agreement and for two years following his termination
for any reason, he will not directly or indirectly (i)solicit or
engage any of the Companys employees, consultants or contractors,
(ii)cause or encourage any of the Companys suppliers or
licensors, or any entity with which the Company has a material
relationship, to terminate or modify that relationship or
(iii)compete with the Companys business as defined.
Stock
Ownership Requirement. During
the term of the Employment Agreement, Mr.Bray is required to own
Company stock, including vested and unvested equity awards, in an
aggregate then-current fair market value equal to two times his
then-current base salary. Compliance with these stock ownership
levels will be measured once per calendar year and violation of
the ownership requirements are grounds for termination for
cause.
The foregoing
description of Mr.Brays Employment Agreement is qualified in its
entirety by reference to, and should be read in conjunction with,
the terms of such agreement, a copy of which is being filed with
this Current Report on Form 8-K as Exhibit10.1, and is
incorporated herein by reference.
Item9.01
Financial Statements and Exhibits.
(d)
Exhibits.
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Exhibit Number |
Description |
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| 10.1 |
Employment Agreement dated and effective as of March17, 2017 between NewStar Financial, Inc. and John K. Bray. |
About NewStar Financial, Inc. (NASDAQ:NEWS)
NewStar Financial, Inc. (NewStar) is a commercial finance company with specialized lending platforms focused on meeting the financing needs of companies and private investors in the middle market. The Company and its wholly owned investment management subsidiary, NewStar Capital LLC, are registered investment advisors and provide asset management services to institutional investors. The Company manages various private credit funds that co-invest in loan origination through its leveraged finance lending platform. Through its wholly owned subsidiary, the Company also manages a series of funds structured as collateralized loan obligations (CLOs) that invest primarily in broadly syndicated loans, as well as other sponsored funds and managed accounts that invest across various asset classes, including broadly syndicated loans, high yield bonds and distressed credits. The Company’s loan portfolio includes loans, leases and other debt products. NewStar Financial, Inc. (NASDAQ:NEWS) Recent Trading Information
NewStar Financial, Inc. (NASDAQ:NEWS) closed its last trading session down -0.44 at 10.35 with 120,417 shares trading hands.