Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
OnFebruary 9, 2022 , the compensation committee (the "Compensation Committee") ofCrimson Wine Group, Ltd.'s (the "Company") board of directors approved a stock option award under theCrimson Wine Group, Ltd. 2013 Omnibus Incentive Plan toJennifer L. Locke , the Company's Chief Executive Officer, consisting of options to purchase an aggregate of 500,000 shares of the Company's common stock in four tranches, subject to both performance-based vesting requirements and time-based vesting requirements, as set forth in the table below. The options were granted onMarch 11, 2022 with an exercise price of$7.50 and will expire onMarch 11, 2032 . Tranche # Number of Shares Subject to Option Performance Period 1 50,000
2 100,000
3 150,000
4 200,000
The performance-based vesting requirement with respect to any particular tranche of options will be satisfied if, and only if, the Compensation Committee determines that certain annual target or cumulative target "Adjusted EBITDA" goals are achieved. More specifically, the performance-based vesting requirement for a tranche will be satisfied if the annual target Adjusted EBITDA goal for the applicable performance period is achieved. If the Company fails to attain the annual target Adjusted EBITDA goal for a particular tranche, such tranche will remain outstanding and the performance-based vesting requirement will be satisfied only if the cumulative target Adjusted EBITDA goal for the applicable performance period or any future performance period (if any) is achieved. "Adjusted EBITDA" is defined as the Company's net (loss) income attributable to common stockholders before interest expense, (benefit) provision for income taxes, depreciation and amortization, stock based compensation, restructuring expenses, impairment charges, vineyard disposals, apples sales from 2018-2019, step-up cost of goods sold (COGS) related to the acquisition ofSeven Hills Winery , and restatement expenses as reported by the Company in its financial statements on Forms 10-Q and 10-K filed with theU.S. Securities and Exchange Commission (but without giving effect to any rounding used in reporting the amounts in Form 10-Q and Form 10-K), for the previous 4 consecutive fiscal quarters of the Company. In the event that the Company or any affiliate or subsidiary acquires any other company or business unit, the financial results of such acquired company or business unit shall be included in calculation of Adjusted EBITDA. Any options for which the performance-based vesting requirements described above have been satisfied shall be subject to the additional time-based vesting requirement whereby 25% of the shares subject to the option shall immediately vest on the date on which the Compensation Committee determines the performance-based vesting requirement has been satisfied with respect to a particular tranche (the "Performance Requirement Satisfaction Date") with the remaining options vesting in three equal annual installments beginning on the first year anniversary of the Performance Requirement Satisfaction Date. -------------------------------------------------------------------------------- Additionally, onMarch 11, 2022 , the Company andMs. Locke entered into an amendment (the "Amendment") to the employment agreement by and between the Company andMs. Locke , which was effective as ofDecember 2, 2019 (the "Employment Agreement"). Pursuant to the Amendment,Ms. Locke's base salary was increased to$375,000 per year, subject to adjustment by the Compensation Committee in its discretion. Additionally, beginningJanuary 1, 2022 ,Ms. Locke's target annual cash bonus amount will equal 50% ofMs. Locke's base salary.Ms. Locke may also be eligible to receive additional discretionary bonuses, with such bonus amounts and bonus terms and conditions established by the Compensation Committee, in its sole discretion.
Except as set forth in the Amendment, the terms of the Employment Agreement remain unchanged. The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit Number Description 10.1 First Amendment to Employment Agreement, dated March
11, 2022, by and between
Crimson Wine Group, Ltd. andJennifer L. Locke
104 Cover Page Interactive Data File (cover page XBRL tags are embedded within the
Inline XBRL document).
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