Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Stockholders Agreement
The description of the Amended and Restated Stockholders Agreement included in
Item 5.02 is incorporated into this Item 1.01 by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Appointment of President and Chief Executive Officer; Appointment of Executive
Chairman
On April 26, 2022, loanDepot, Inc. (the "Company") announced the appointment of
Frank Martell as the Company's President and Chief Executive Officer, effective
April 27, 2022. Mr. Martell will succeed Anthony Hsieh, who has served as the
Company's Chairman and Chief Executive Officer since the Company's formation in
December 2009. In connection with Mr. Martell's appointment, Mr. Hsieh was
appointed Executive Chairman of the Company, effective April 27, 2022. Upon the
commencement of Mr. Martell's employment with the Company on April 27, 2022, he
will also become a member of the Company's Board of Directors (the "Board"),
serving as a Class I Director until his successor has been duly elected and
qualified, or, if sooner, until his death, resignation or removal.
Martell Agreement
Effective as of April 21, 2022, in connection with Mr. Martell's appointment as
President and Chief Executive Officer, the Company entered into an Executive
Employment Agreement (the "Martell Agreement") with Mr. Martell. Mr. Martell's
employment will be on an at-will basis. The Martell Agreement provides for an
initial annual base salary of $800,000, subject to increase in the sole
discretion of the Board or a committee of the Board. Under the terms of the
Martell Agreement, Mr. Martell is also (i) eligible to receive an annual bonus
targeted at 225% of his base salary (the "Martell Target Bonus"), subject to the
determination of the Board (or a committee of the Board) in its sole discretion,
(ii) eligible to receive equity incentive grants as determined by the Board (or
a committee of the Board) in its sole discretion, and (iii) entitled to the
benefits and compensation practices that may be in effect from time to time and
are provided by the Company to its executive employees generally. For calendar
year 2022 only, the Martell Target Bonus shall be pro-rated for the portion of
the year in which Mr. Martell is employed, but in no event shall be (i) less
than $900,000 or (ii) more than a pro rata amount of the maximum bonus under the
program (i.e. 300% of target).
Pursuant to the Martell Agreement, subject to the approval of the Compensation
Committee of the Board, the Company will grant Mr. Martell (i) restricted stock
units to acquire 1,000,000 shares of the Company's Class A common stock (the
"Initial RSU Awards"), which will vest in accordance with the following
schedule: one fourth (1/4th) of the total number of Initial RSU Awards will
satisfy time-based vesting on each one-year anniversary of the vesting
commencement date over a period of four years, (ii) 3,000,000 performance stock
units (the "Initial PSUs") which may convert into a number of shares based on
achievement against performance metrics set forth in the award agreement over a
five-year performance period, and (iii) options to purchase 1,000,000 shares of
the Company's Class A common stock, which will vest in accordance with the
following schedule: one fourth (1/4th) of the total number of options will
satisfy time-based vesting on each one-year anniversary of the vesting
commencement date over a period of four years. All of the foregoing equity
awards will be granted pursuant to the Company's Inducement Plan (as defined
below). Beginning in 2023, and subject to approval of the Compensation Committee
of the Board, Mr. Martell shall have a target overall annual equity grant amount
of $4,400,000, subject to adjustment by the Compensation Committee of the Board
based on executive and Company performance.
The Martell Agreement also subjects Mr. Martell to the following restrictive
covenants: (i) perpetual confidentiality, (ii) employment term non-competition
and customer non-solicitation, (iii) employment term and 24 months
post-employment non-solicitation employees, and (iv) perpetual and mutual
non-disparagement.
Pursuant to the Martell Agreement, Mr. Martell would be entitled to receive
certain payments and benefits in connections with certain terminations of
employment, as follows:
•In the event Mr. Martell is involuntarily terminated without cause or resigns
for Good Reason (as defined in the Martell Agreement) (together, a "Martell
Covered Termination"), he would be entitled to receive the earned, but unpaid
portion of his annual bonus for the prior fiscal year (if applicable) and,
subject to his execution and non-revocation of a release of claims, (i) 24
months of his base salary payable in a lump sum payment, (ii) a pro rata portion
of his annual bonus for the fiscal year based on actual achievement of the
applicable bonus objectives and
conditions set by the Board, (iii) the payment or reimbursement of healthcare
premiums through the earlier of (A) 24 months or (B) the date Mr. Martell and
his dependents become eligible for healthcare under another employer's plan,
(iv) acceleration of the Initial PSUs and any other performance based award held
by Mr. Martell, based on actual performance measured to the date of such
termination, with a 30-day post-termination window during which achievement of
Initial PSU goals will still qualify and (v) extension of the exercise period
for vested, but unexercised options until the earlier of (A) one year following
the date of such termination or (B) the expiration date of the option.
•Upon a Martell Covered Termination in connection with a change in control of
the Company, Mr. Martell would be entitled to receive the earned, but unpaid
portion of his annual bonus for the prior fiscal year (if applicable) and,
subject to his execution and non-revocation of a release of claims, (i) three
times the sum of his base salary and the Martell Target Bonus, payable in a lump
sum, (ii) a pro-rata portion of his annual bonus for the fiscal year based on
actual achievement of the applicable bonus objectives and conditions set by the
Board, (iii) vesting of Mr. Martell's time-based stock options and other
time-based equity awards, with the performance-based vesting criteria associated
with the Initial PSU Award and any other performance based award held by Mr.
Martell deemed earned at the greater of target or actual performance through the
date of termination, and (iv) the payment or reimbursement of healthcare
premiums through the earlier of (A) 24 months or (B) the date Mr. Martell and
his dependents become eligible for healthcare under another employer's plan.
•In the event Mr. Martell is terminated due to Mr. Martell's death or Disability
(as defined in the Martell Agreement), he would be entitled to receive the
earned, but unpaid portion of his annual bonus for the prior fiscal year (if
applicable) and (i) a pro rata portion of his annual bonus for the fiscal year
based on actual achievement of the applicable bonus objectives and conditions
set by the Board, (ii) vesting of Mr. Martell's time-based stock options and
other time-based equity awards, with the performance-based vesting criteria
associated with the Initial PSU Award and any other performance based award held
by Mr. Martell deemed earned at the greater of target or actual performance
through the date of termination, and (iii) extension of the exercise period for
vested, but unexercised options until the earlier of (A) one year following the
date of such termination or (B) the expiration date of the option.
•In the event Mr. Martell is terminated without Good Reason (as defined in the
Martell Agreement), Mr. Martell's unvested equity awards shall be immediately
forfeited, and vested, but unexercised options shall be exercisable until the
earlier of (A) 90 days following the date of such termination or (B) the
expiration date of the option.
•In the event Mr. Martell is terminated due to Cause (as defined in the Martell
Agreement), Mr. Martell's unvested and vested equity awards shall be immediately
forfeited.
Mr. Martell has significant experience as a public company CEO and board
director and has over 30 years' executive leadership experience in the
marketing, financial services, and business information industries. Most
recently, Mr. Martell served as Chief Executive Officer of CoreLogic from March
2017 to January 2022 following his tenure as the company's Chief Financial
Officer and Chief Operating Officer. Until October 2021, Mr. Martell also served
on the board of directors of the Mortgage Bankers Association.
There are no arrangements or transactions between the Company and Mr. Martell of
the type that are required to be disclosed pursuant to Item 404(a) of Regulation
S-K adopted by the Securities and Exchange Commission.
Amended and Restated Hsieh Agreement
Effective as of April 21, 2022, in connection with Mr. Hsieh's appointment as
Executive Chairman, the Company entered into an Amended and Restated Executive
Employment Agreement (the "Amended and Restated Hsieh Agreement") with Mr.
Hsieh. The Amended and Restated Hsieh Agreement amends and restates Mr. Hsieh's
Executive Employment Agreement with the Company, dated as of February 16, 2021
(the "Prior Employment Agreement"). The Amended and Restated Hsieh Agreement,
other than providing for his new role as Executive Chairman and for revised
compensation as described further below, contains substantially similar terms as
the Prior Employment Agreement, which was described in, and filed as an exhibit
to, the Company's Current Report on Form 8-K filed on February 16, 2021.
Mr. Hsieh's employment will be on an at-will basis. The Amended and Restated
Hsieh Agreement provides for an initial annual base salary of $850,000 for the
remainder of 2022 and $350,000 for 2023 and subsequent years. Under the terms of
the Amended and Restated Hsieh Agreement, Mr. Hsieh is also (i) eligible to
receive an annual bonus targeted at 250% of his base salary (the "Hsieh Target
Bonus") for calendar year 2022, with a maximum payout of 300% of the Hsieh
Target Bonus for calendar year 2022, subject to the determination of the
Compensation Committee of the Board in its sole discretion, (ii) eligible
to receive equity incentive grants as determined by the Board (or a committee of
the Board) in its sole discretion, and (iii) entitled to the benefits and
compensation practices that may be in effect from time to time and are provided
by the Company to its executive employees generally, as well as any additional
benefits provided to Mr. Hsieh consistent with past practice. For 2023 and
subsequent years, the Hsieh Target Bonus shall be 100% of his base salary with a
maximum payout of 200% of the Hsieh Target Bonus for such year.
The foregoing descriptions of the Martell Agreement and the Amended and Restated
Hsieh Agreement are not complete and are qualified in their entirety by
reference to the full text of the Martell Agreement and the Amended and Restated
Hsieh Agreement, copies of which are attached hereto as Exhibit 10.1 and 10.2,
respectively, and are incorporated herein by reference.
Amended and Restated Stockholders Agreement
Effective as of April 21, 2022, in connection with the foregoing transitions,
the Company entered into an Amended and Restated Stockholders Agreement (the
"Amended and Restated Stockholders Agreement") by and among the Company,
Parthenon Investors III, L.P., PCap Associates, Parthenon Capital Partners Fund,
L.P., Parthenon Investors IV, L.P., Parthenon Capital Partners Fund II, L.P.
(together with Parthenon Investors III, L.P., PCap Associates, Parthenon Capital
Partners Fund, L.P. and Parthenon Investors IV, L.P., the "Parthenon
Stockholders") PCP Managers, L.P., The JLSSAA, Trust established September 4,
2014, JLSA, LLC, Trilogy Mortgage Holdings, Inc., Trilogy Management Investors
Six, LLC, Trilogy Management Investors Seven, LLC and Trilogy Management
Investors Eight, LLC (the "Hsieh Stockholders").
Pursuant to the Amended and Restated Stockholders Agreement, the Company agreed
to, among other things, provide the Hsieh Stockholders with the right to
designate a Class I director to the Board and certain preemptive rights on the
issuance of additional common stock, or other equity securities of the Company
convertible into, exercisable for or exchangeable into common stock, subject to
certain exceptions.
The foregoing description of the Amended and Restated Stockholders Agreement is
not complete and is qualified in its entirety by reference to the full text of
the Amended and Restated Stockholders Agreement, a copy of which is attached
hereto as Exhibit 10.3 and is incorporated herein by reference.
Director Resignation; Director Appointment; Lead Independent Director
On April 21, 2022, in connection with the foregoing, Mike Linton notified the
Company of his resignation from the Board and committees thereof, effective upon
the Hsieh Stockholders nominating John Lee as a Class I director to the Board,
pursuant to the Amended and Restated Stockholders Agreement. Upon Mr. Linton's
resignation and the recommendation of the Nominating and Corporate Governance
Committee of the Board, the Board appointed Mr. Lee, 53, to the Board as a Class
I director. Class I directors' terms expire at the next annual meeting of
stockholders. The Board also appointed Mr. Lee to serve as a member of the
Compensation Committee of the Board and the Nominating and Corporate Governance
Committee of the Board. In addition, on April 21, 2022, John Dorman resigned as
Lead Independent Director of the Board, pursuant to the Amended and Restated
Stockholders Agreement; however, Mr. Dorman will remain a member of the
Company's Board and maintain his membership on the Company's committees.
Mr. Lee will participate in the Company's Director Compensation Program,
pursuant to which the Company expects to pay Mr. Lee an annual retainer of
$250,000 payable 50% in cash and 50% in equity.
Mr. Lee has extensive knowledge of the Company's business and leadership
experience, most recently serving as the Company's Chief Analytics Officer,
leading financial modeling and analytics across all lending channels, between
July 2014 and March 2021. Prior to that, Mr. Lee was loanDepot's first Chief
Financial Officer, serving between September 2009 and July 2014.
Adoption of Inducement Plan
On April 20, 20222, the Board adopted the 2022 Inducement Plan (the "Inducement
Plan") and, subject to the adjustment provisions of the Inducement Plan,
reserved 5,000,000 shares of the Company's Class A common stock for issuance
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No Description
Executive Employment Agreement, dated April 2 1 , 2022, by and between
10.1 Frank Martell and loanDepot, Inc .
Amended and Restated Executive Employment Agreement, dated April 2 1 ,
10.2 2022, by and between loanDepot, Inc. and Anthony Hsieh
10.3 Amended and Restated Stockholders Agreement, dated April 2 1 , 2022, by
and among loanDepot, Inc., Parthenon Investors III, L.P., PCap Associates,
Parthenon Capital Partners Fund, L.P., Parthenon Investors IV, L.P., Parthenon
Capital Partners Fund II, L.P. PCP Managers, L.P., The JLSSAA, Trust
established September 4, 2014, JLSA, LLC, Trilogy Mortgage Holdings, Inc.,
Trilogy Management Investors Six, LLC, Trilogy Management Investors Seven, LLC
and Trilogy Management Investors Eight, LLC
10.4 2022 Inducement Plan
99.1 Press Release, dated April 26 , 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).© Edgar Online, source Glimpses
LOANDEPOT, INC. 
