Item 5.02 Departure of Directors or Certain Officers? Election of Directors?
Appointment of Certain Officers? Compensatory Arrangements of Certain Officers.
On March 3, 2023, the board of directors (the "Board") of Loyalty Ventures Inc.,
a Delaware corporation (the "Company") approved retention bonus letter
agreements (each a "Retention Agreement") with Charles Horn and Jeff Chesnut
(each, an "Executive"), pursuant to which cash retention bonuses (each, a
"Retention Bonus") in the amount of $2,250,000 and $1,853,749, respectively,
were paid to each Executive in a lump sum on or about March 6, 2023. The
Retention Agreements were entered into on March 4, 2023. The Retention Bonuses
are subject to a recapture provision that generally requires repayment in the
event of a voluntary departure by the Executive or a termination of employment
by the Company "for cause" prior to December 31, 2023, which recapture provision
will lapse upon certain specified events. As a condition to each Retention
Agreement, each Executive has waived any and all participation in any annual
bonus plan established by the Company for the 2023 calendar year and Mr. Chesnut
has forfeited his unvested cash awards granted under the Company's 2021 Omnibus
Incentive Plan pursuant to the terms of the Employee Matters Agreement dated as
of November 5, 2021 between the Company and Bread Financial Holdings, Inc.
(formerly Alliance Data Systems Corporation).
The foregoing descriptions of the Retention Agreements do not purport to be
complete and are qualified in their entirety by reference to the full text of
the form of Retention Agreement filed as Exhibit 10.1 to this Form 8-K and
incorporated herein by reference.
Caution Regarding Forward-Looking Statements
This current report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements give our expectations or forecasts of future events and can generally
be identified by the use of words such as "believe," "expect," "anticipate,"
"estimate," "intend," "project," "plan," "likely," "may," "should" or other
words or phrases of similar import. Similarly, statements that describe our
business strategy, outlook, objectives, plans, intentions or goals also are
forward-looking statements. Forward-looking statements, however, are subject to
a number of risks and uncertainties that could cause actual results to differ
materially for a variety of reasons, including, among others, our high level of
indebtedness; reductions in our credit ratings that limit our ability to access
capital markets; increases in market interest rates; the potential for our
common stock to be delisted from trading on Nasdaq, including for failure to
meet minimum continuing listing standards; the potential failure to satisfy the
closing conditions under the purchase agreement for our BrandLoyalty business,
which may result in the sale transaction not being consummated; the potential
failure to satisfy the borrowing conditions under the bridge loan agreement,
which may result in the BrandLoyalty business not being able to obtain bridge
loans, which could lead to the insolvency of the BrandLoyalty business;
continuing impacts related to COVID-19, including variants, labor shortages,
reduction in demand from clients, supply chain disruption for our reward
suppliers and capacity constraints, rising costs or other disruptions in the
airline or travel industries; changes in geopolitical conditions, including the
Russian invasion of Ukraine and related global sanctions and Russian
restrictions or actions with respect to local assets; fluctuation in foreign
exchange rates; execution of restructuring plans and any resulting cost savings;
loss of, or reduction in demand for services from, significant clients; loss of
active AIR MILES® Reward Program collectors or greater than expected redemptions
by the same; unfavorable resolution of pending or future litigation matters;
disruption to operations due to the separation from our former parent or failure
of the separation to be tax-free; new regulatory limitations related to consumer
protection or data privacy limiting our services; and loss of consumer
information due to compromised physical or cyber security. We believe that our
expectations are based on reasonable assumptions. No assurances can be given
that our expectations will prove to be correct. Additional risks and
uncertainties are set forth in the Risk Factors section of both (1) our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021 and (2) any
updates in Item 1A, or elsewhere, in our Quarterly Reports on Form 10-Q filed
for periods subsequent to such Form 10-K or any updates thereto. Our
forward-looking statements speak only as of the date made, and we undertake no
obligation, other than as required by applicable law, to update or revise any
forward-looking statements, whether as a result of new information, subsequent
events, anticipated or unanticipated circumstances or otherwise.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Document Description
10.1 + Form of Retention Bonus Letter Agreement.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
+ Management contract, compensatory plan or arrangement.
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