RAND CAPITAL CORPORATION (NASDAQ:RAND) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(e) On March1, 2017, Rand Capital Corporation
(the Company) entered into a Change in Control Agreement (the
Agreement) with each of Allen F. Grum, the Companys President and
Chief Executive Officer, and Daniel P. Penberthy, the Companys
Executive Vice President and Chief Financial Officer (each an
Executive). The Agreement provides the Executive with the right
to receive payments in the event that (i)such Executives
employment is terminated without cause (as defined in the
Agreement) (other than for death or disability (as defined in the
Agreement)) in connection with, or within eighteen months after,
a change in control of the Company or (ii)such Executive
terminates his employment in connection with, or within eighteen
months after, a change in control for good reason (as defined in
the Agreement).
As defined in more detail in the Agreement, a change in control
means the occurrence of any of the following events: (1)any
person or entity becomes the beneficial owner, directly or
indirectly, of securities representing more than 50% of the total
voting power of the Companys outstanding securities; (2)a merger
or consolidation of the Company, other than that results in the
outstanding voting securities of the Company prior to such merger
or consolidation representing at least 50% of the total voting
power after such merger or consolidation; (3)the sale or
disposition by the Company of all or substantially all of the
Companys assets or (4)a change in the composition of the Board of
Directors of the Company that results in fewer than a majority of
the directors being incumbent directors (as defined in the
Agreement).
Upon the occurrence of such events, the Agreement provides for a
lump sum payment to the Executive in an amount equal to (i)one
(1.0)times such Executives annual base salary then in effect plus
(ii)the average of the annual incentive bonuses and profit
sharing payments earned by such Executive for the last five
fiscal years ended prior to such Executives employment
termination date. However, the amount of the payment to any
Executive cannot exceed (and will otherwise be reduced in order
not to exceed) 1.5% of the total equity capitalization of the
Company implied by the Change in Control event. Prior to receipt
of such payment, the Agreement requires the Executive to execute
a general release agreement, which includes a general release of
claims against the Company by the Executive and an agreement by
the Executive to comply with ongoing confidentiality and
non-disparagement obligations.
The term of each Agreement continues in effect until December31,
2019, with subsequent automatic extensions of the term for one
additional year, unless, not later than nine months prior to the
conclusion of any term, the Company or the Executive provides
notice to the other not to extend the term.
The foregoing description of the Agreement is qualified in its
entirety by reference to the Agreements with each of Allen F.
Grum and Daniel P. Penberthy, copies of which are filed as
Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and
incorporated herein by reference.
Item9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
|
ExhibitNo. |
Description of Exhibit |
|
| 10.1 |
Change in Control Agreement, dated as of March 1, 2017, by and between Rand Capital Corporation and Allen F. Grum |
|
| 10.2 |
Change in Control Agreement, dated as of March 1, 2017, by and between Rand Capital Corporation and Daniel P. Penberthy |
About RAND CAPITAL CORPORATION (NASDAQ:RAND)
Rand Capital Corporation is a closed-end, diversified, management investment company. The Company provides managerial assistance to the portfolio companies in which it invests. The Company makes venture capital investments in early or expansion-stage companies, typically in New York and its surrounding states. The Company makes the majority of its investments through its subsidiary, Rand Capital SBIC, Inc. (Rand SBIC), which operates as a small business investment company. The Company invests in a mixture of debt and equity instruments. The debt securities have an equity component in the form of warrants or options to acquire stock or the right to convert the debt securities into stock. The Company’s principal investment objective is to achieve long-term capital appreciation on its equity investments while maintaining a cash flow from the debenture and pass-through equity instruments. It makes initial investments in a company through equity or in debt or loan instruments. RAND CAPITAL CORPORATION (NASDAQ:RAND) Recent Trading Information
RAND CAPITAL CORPORATION (NASDAQ:RAND) closed its last trading session down -0.04 at 3.13 with 15,241 shares trading hands.