Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On November 5, 2020, the Board of Directors (the "Board") of Open Lending
Corporation (the "Company") entered into: a First Amendment to Employment
Agreement with John J. Flynn, the Company's Chief Executive Officer (the "Flynn
Amendment"), which amends an Employment Agreement dated August 28, 2020 (the
"Flynn Employment Agreement"); a First Amendment to Employment Agreement with
Ross Jessup, the Company's President and Chief Operating Officer (the "Jessup
Amendment'), which amends an Employment Agreement dated August 28, 2020 (the
"Jessup Employment Agreement"); and a First Amendment to Employment Agreement
with Charles D. Jehl, the Company's Chief Financial Officer (the "Jehl
Amendment'), which amends an Employment Agreement dated August 28, 2020 (the
"Jehl Employment Agreement").
Flynn Amendment
The Flynn Amendment revises Mr. Flynn's long-term incentive compensation.
Pursuant to the Flynn Amendment, Mr. Flynn received a grant of 38,580 restricted
stock units on November 5, 2020 (the "Flynn Time-Based Grant"). The Flynn
Time-Based Grant will vest over three years and nine months from November 5,
2020 and shall be fully vested no later than November 5, 2024. Mr. Flynn will
also receive a grant of 38,580 restricted stock units on January 1, 2021 (the
"Flynn Performance-Based Grant"). The Flynn Performance-Based Grant will vest,
subject to the completion of certain performance criteria over a three-year
performance period beginning November 5, 2020, as determined by the Board or the
Compensation Committee of the Board (the "Compensation Committee") in its
discretion. No other material changes were made to the terms of the Flynn
Employment Agreement.
The foregoing description of the Flynn Amendment is qualified in its entirety by
reference to the text of the Flynn Amendment, which is attached hereto as
Exhibit 10.1, and incorporated herein by reference.
Jessup Amendment
The Jessup Amendment revises Mr. Jessup's long-term incentive compensation.
Pursuant to the Jessup Amendment, Mr. Jessup received a grant of 27,557
restricted stock units on November 5, 2020 (the "Jessup Time-Based Grant"). The
Jessup Time-Based Grant will vest over three years and nine months beginning
November 5, 2020 and shall be fully vested no later than November 5, 2024.
Mr. Jessup will also receive a grant of 27,558 restricted stock units on
January 1, 2021 (the "Jessup Performance-Based Grant"). The Jessup
Performance-Based Grant will vest, subject to the completion of certain
performance criteria over a three-year performance period beginning November 5,
2020, as determined by the Board or the Compensation Committee in its
discretion. No other material changes were made to the terms of the Jessup
Employment Agreement.
The foregoing description of the Jessup Amendment is qualified in its entirety
by reference to the text of the Jessup Amendment, which is attached hereto as
Exhibit 10.2, and incorporated herein by reference.
Jehl Amendment
The Jehl Amendment revises Mr. Jehl's long-term incentive compensation. Pursuant
to the Jehl Amendment, Mr. Jehl received a grant of 16,534 restricted stock
units on November 5, 2020 (the "Jehl Time-Based Grant"). The Jehl Time-Based
Grant will vest over three years and nine months beginning November 5, 2020 and
shall be fully vested no later than November 5, 2024. Mr. Jehl will also receive
a grant of 16,535 restricted stock units on January 1, 2021 (the "Jehl
Performance-Based Grant"). The Jehl Performance-Based Grant will vest, subject
to the completion of certain performance criteria over a three-year performance
period beginning November 5, 2020, as determined by the Board or the
Compensation Committee in its discretion. No other material changes were made to
the terms of the Jehl Employment Agreement.
The foregoing description of the Jehl Amendment is qualified in its entirety by
reference to the text of the Jehl Amendment, which is attached hereto as Exhibit
10.3, and incorporated herein by reference.
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Senior Executive Cash Incentive Bonus Plan
Also on November 5, 2020, the Board approved the adoption of the Company's
Senior Executive Cash Incentive Bonus Plan (the "Plan"). Under the Plan,
executives of the Company designated by the Compensation Committee are eligible
to receive periodic cash bonuses based on achievement of individual and
corporate performance goals established by the Committee. Each of the Company's
current executive officers is a participant in the Plan. A copy of the Plan is
attached hereto as Exhibit 10.4 and is incorporated herein by reference.
Item 8.01. Other Events
On November 5, 2020 the Board approved the Non-Employee Director Compensation
Policy (as amended, the "Policy"). The Policy is designed to enable us to
attract and retain, on a long-term basis, high-caliber directors who are not
employees or officers of the Company or its subsidiaries ("Outside Directors").
Members of the Board who are employed by or otherwise affiliated with any
private equity firm or company which is an investor in the Company are not be
eligible to receive any cash retainers or other form of compensation in
connection with their service on the Board.
Cash Retainers
Under the Policy, Outside Directors will be eligible to receive cash retainers
(which will be pro-ratedbased on the number of actual days served by the
director on the Board or applicable committee during such calendar quarter or
year) as set forth below:
Annual Retainer for Board Membership
Annual service on the board of directors $50,000
Additional Annual Retainer for Committee Membership
Audit Committee Chair $15,000
Compensation Committee Chair $10,000
Nominating and Corporate Governance Committee Chair $10,000Committee chair retainers are in addition to retainers for members of the Board.
No additional compensation will be paid for attending any Board meetings or
other individual committee meetings of the Board.
Initial Grants
In addition, the Policy provides for an initial, one-time restricted stock unit
award (the "Initial Award") with a Value (as defined in the Policy) of $50,000
to each new Outside Director upon his or her election to the Board, which shall
vest in full on the first anniversary of the date of grant. All vesting shall
cease if the director resigns from the Board or otherwise ceases to serve as a
director of the Company and the Initial Award will be forfeited. If a new
Outside Director joins the Board on a date other than the date of the Annual
Meeting of Stockholders of the Company following November 5, 2020 (the "Annual
Meeting"), then such Outside Director will be granted a pro-rata portion of the
Initial Award based on the time between such Outside Director's appointment and
the next Annual Meeting (provided, that for any Outside Director who served on
the Board during the calendar year the Policy is adopted, no such proration
shall apply to the Initial Award). Grants shall occur as soon as
administratively practicable following such Outside Director's appointment to
the Board.
Annual Grants
Further, on each date of each Annual Meeting following November 5, 2020, each
continuing Outside Director, other than a director receiving an Initial Award,
will receive an annual restricted stock unit award (the "Annual Award") with a
Value (as defined in the Policy) of $50,000, which shall vest in full upon the
earlier of (i) the first anniversary of the date of grant or (ii) the date of
the next Annual Meeting. All vesting shall cease if the director resigns from
the Board or otherwise ceases to serve as a director of the Company, unless the
Board determines that the circumstances warrant continuation of vesting. All
outstanding Initial Awards and Annual Awards held by an Outside Director shall
become fully vested and nonforfeitable upon a Sale Event (as defined in the
Company's 2020 Stock Option and Incentive Plan).
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We will reimburse all reasonable out-of-pocket expenses incurred by Outside
Directors for their attendance at meetings of the Board or any committee
thereof.
The foregoing description of the Policy is qualified in its entirety by
reference to the text of the Policy, which is attached hereto as Exhibit 10.5,
and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 First Amendment to Employment Agreement by and between the Company and
John J. Flynn, dated November 5, 2020.
10.2 First Amendment to Employment Agreement by and between the Company and
Ross Jessup, dated November 5, 2020.
10.3 First Amendment to Employment Agreement by and between the Company and
Charles D. Jehl, dated as of November 5, 2020.
10.4 Senior Executive Cash Incentive Bonus Plan.
10.5 Non-Employee Director Compensation Policy.
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