FBRC Fbr &

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

February 9, 2015

Date of Report (Date of earliest event reported)

 

 

FBR & CO.

(Exact Name of Registrant as Specified in its Charter)

 

 

Virginia

(State or Other Jurisdiction

of Incorporation)

 

001-33518		20-5164223
(Commission File Number)		(IRS Employer Identification No.)

1300 Seventeenth Street North

Arlington, VA 22209

(Address of Principal Executive Office) (Zip Code)

(703) 312-9500

(Registrant’s Telephone Number, Including Area Code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

---

Item 5.02(e)

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Performance Share Plan

On February 10, 2015, FBR & Co. (the “Company”) granted awards to members of the Company’s executive committee, including the Company’s named executive officers, pursuant to a performance share unit arrangement established under the Company’s Amended and Restated 2006 Long-Term Incentive Plan (the “Stock Plan”) and approved by the Compensation Committee (the “Compensation Committee”) of the Board of Directors that is designed to further the long-term growth of the Company by providing long-term incentives in respect of the Company’s common stock and to assist the Company in retaining key employees of experience and ability (the “PSU Program”). The following discussion of the PSU Program is qualified in its entirety by reference to the form of award letters, attached as Exhibits 10.1 and 10.2, respectively, to this Form 8-K, and to the PSU Program and the Stock Plan, which have been previously filed by the Company.

An award under the PSU Program will be earned and will vest as follows depending on the level of achievement of the performance goal: (1) at a 50% rate on December 31, 2017 (the “Vesting Date”) if the tangible book value of the Company, measured on a per share basis, has increased by an amount equal to a 6% compound annual growth rate over the three-year period beginning on January 1, 2015 (the “Performance Period”); (2) at a 100% rate on the Vesting Date if the tangible book value of the Company, measured on a per share basis, has increased by an amount equal to a 9% compound annual growth rate over the Performance Period; and (3) at a proportional rate between 50% and 100% in the event the tangible book value of the Company, measured on a per share basis, has increased by an amount between a 6% and a 9% compound annual growth rate over the Performance Period. In the event the tangible book value of the Company, measured on a per share basis, has not increased by an amount equal to a 6% compound annual growth rate over the Performance Period, no performance share units will be earned and the award will be forfeited. In general, the Company will issue shares in settlement of PSU Program awards within 75 days following the end of the Performance Period.

---

For purposes of the PSU Program, tangible book value of the Company on any measurement date equals the book value of the Company excluding goodwill and intangible assets (whether net or otherwise), as adjusted to exclude the impact of any dividends declared or paid during the measurement period.

Awards granted under the PSU Program are eligible to continue to be earned based on actual performance results through the end of the Performance Period upon certain terminations of employment prior to a “change in control” (as defined in the Stock Plan). In the event of a change in control, the Performance Period with respect to each outstanding award will end and the number of performance share units earned by the participant will be fixed based on the greater of (i) the Company’s actual performance from the beginning of the Performance Period to the date of the change in control and (ii) the level of achievement resulting in 50% of the performance share units being earned. Following the change in control, the earned performance share units will be subject to vesting based solely on the participant’s continued employment with the Company through the date the awards would have otherwise vested, subject to accelerated vesting on certain terminations of employment.

Under the PSU Program, the named executive officers received award opportunities denominated in shares of Company common stock as follows: (1) Mr. Hendrix, 46,051 shares; (2) Mr. Wright, 32,236 shares; (3) Mr. Neuhauser 23,026 shares; (4) Mr. Fishman, 32,236 shares; (5) and Mr. Slosser, 32,236 shares.

Incentive Program

On February 9, 2015, the Compensation Committee approved the terms and conditions of an annual incentive program under which certain of the Company’s executive officers may earn annual incentive compensation for 2015 (the “2015 Incentive Compensation Program”). Under the 2015 Incentive Compensation Program, each participating officer is eligible to receive incentive bonus compensation for 2015 under the Company’s Stock Plan based on the Company’s annual revenue, subject to achievement of a minimum level of annual revenue for the year. The terms of the 2015 Incentive Compensation Program designate the percentage of annual revenue that may be paid out under the qualified performance-based awards to any individual participant, and the maximum percentage of annual revenue that may be paid out under the awards to all of the participants as a group. The amounts payable under the qualified performance-based awards may be reduced in the discretion of the Compensation Committee based on performance. Richard J. Hendrix, the Company’s Chairman, President and Chief Executive Officer, Bradley J. Wright, its Executive Vice President and Chief Financial Officer, Adam J. Fishman, its Executive Vice President and

---

Head of Sales and Research, Michael A. Lloyd, its Executive Vice President and Head of Trading, James C. Neuhauser, its Executive Vice President and Chief Investment Officer, and Kenneth P. Slosser, its Executive Vice President and Head of Investment Banking, are eligible to participate in the annual incentive program.

2014 Bonus Awards

On February 10, 2015 Company granted the following 2014 bonus awards to the named executive officers of the Company under the Company’s previously disclosed 2014 Incentive Compensation Plan: (1) Mr. Hendrix, a cash award of $400,000 and 4,214 restricted stock units (“RSUs”) ; (2) Mr. Wright, a cash award of $280,000 and 2,950 RSUs; (3) Mr. Fishman, a cash award of $400,000 and 4,214 RSUs; (4) Mr. Neuhauser, a cash award of $280,000 and 2,950 RSUs; and (5) Mr. Slosser, a cash award of $400,000 and 4,214 RSUs.

The matters set forth in this Current Report on Form 8-K will be more fully described in the Company’s Definitive Proxy Statement for its 2015 Annual Meeting of Stockholders

 

Item 9.01

Financial Statements and exhibits

Exhibits.

 

10.01		Form of Award Letter for Chief Executive Officer
10.02		Form of Award Letter

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				FBR & CO.
Date: February 12, 2015				By:		/s/ Bradley J. Wright
						Bradley J. Wright
						Executive Vice President and Chief Financial Officer

Exhibit 10.01

STRICTLY CONFIDENTIAL

[            ], 2015            

[NAME]

Dear [FIRST NAME]:

The Compensation Committee of the Board of Directors (the “Committee”) of FBR & Co. (the “Company”) has established the FBR & Co. 2013 Performance Share Unit Program (the “Program”), and you have been selected by the Committee as an eligible participant in the Program. As such, you have been granted an Award under the Program as set forth in this letter, including Schedule A (this “Award Agreement”). Capitalized terms used herein that are not otherwise defined shall have the meaning given to them in the Program, a copy of which is attached hereto.

Awards under the Program are granted under Section 8 of the Stock Plan. To the extent earned pursuant to the terms of the Program and this Award Agreement, Performance Share Units shall be settled in shares of Common Stock available under the Stock Plan (unless the Committee determines to satisfy with a cash payment).

This Award Agreement provides the general terms of your Award and is subject in its entirety to the terms of the Program and the Stock Plan. You acknowledge having received a copy of the Program and the Stock Plan and, by signing this Award Agreement, you hereby consent to the terms and conditions of the Program, including without limitation Section 10 (Dispute Resolution) and Section 11 (Clawback) thereof, and the Stock Plan.

Grant Date: February [    ], 2015.

Award of Performance Share Units: Subject to the provisions of the Program and this Award Agreement, you are hereby awarded the opportunity to earn up to [                ] shares of Common Stock, with the actual number of shares of Common Stock earned to be determined based on the level of achievement of the Performance Goal for the Performance Period (each as specified below), subject to your continued employment through the Restriction Period except as otherwise provided in Section 9 of the Program.

Performance Goal: Subject to your continued employment through the Restriction Period, you will be eligible to earn a percentage of the Performance Share Units subject to your Award in accordance with Schedule A hereto on the date that the Committee determines whether and the extent to which the Company has achieved the Performance Goal set forth on Schedule A, which date shall be no later than 75 days after the end of the Performance Period.

Performance Period; Restriction Period: The Performance Period is the period during which the performance goal is measured, which for purposes of this Award is generally January 1, 2015 through December 31, 2017. The Restriction Period is the vesting or waiting period before you have the right to receive any shares of Common

---

Stock earned in respect of your Award. Your Award has a three-year Restriction Period that will run concurrently with the Performance Period and as such will lapse on December 31, 2017, subject to your continued employment with the Company through such date. Section 9 of the Program sets forth your rights to continue to earn and/or vest in all or a pro rata portion of your Award in the event of certain terminations of employment prior to the end of the Restriction Period.

Settlement of Awards: Except as otherwise provided in Section 9 of the Program, as soon as practicable after the Restriction Period ends (but no later than 75 days following the end of the Restriction Period) and subject to satisfaction of your tax obligation (as described in the “Taxes” section below), the Company will issue shares of Common Stock (or, in the Committee’s discretion, a cash payment based on the per share Fair Market Value (as defined in the Stock Plan)) to you in settlement of your earned Performance Share Units, subject to any proration that may apply pursuant to Section 9 of the Program. Until the level of achievement of the Performance Goals is determined and the Restriction Period lapses, and until the Performance Share Units you have earned (if any) are settled, you will not have any ownership rights in the shares of Common Stock underlying your Award.

Taxes: You are strongly advised to consult with your own tax professional concerning the tax implications of your Award based on your particular circumstances. The Company cannot provide you with tax advice. Your right to receive settlement of any earned Performance Share Units will be subject to payment by you of all applicable taxes.

Coordination with Your Employment Agreement: Notwithstanding the definitions of “Cause” and “Good Reason” in the Program, for purposes of Section 9 of the Program, the definitions of “Cause” and “Good Reason” shall have the meanings specified in that certain Employment Agreement, dated as of December 13, 2012, by and between you and the Company. In addition, for purposes of Section 9(a)(ii) of the Program: (a) your Separation from Service prior to a Change in Control for Good Reason shall be deemed to be a Separation from Service by the Company without Cause; and (b) consistent with Section 5.2(b)(iv) of your Employment Agreement, any shares of Common Stock you earn under Section 9(a)(ii) of the Program (other than upon a Separation from Service due to Retirement) shall not be subject to proration. For purposes of your Award under the Program, notwithstanding any more favorable or different provisions in your Employment Agreement that apply to equity or performance awards, (i) the settlement dates set forth in the Program shall control the settlement of your Award, and (ii) the provisions under the Plan applicable upon a Change in Control shall apply to your Award.

Grant Acceptance: Please acknowledge your acceptance of your Award under the Program, your receipt of a copy of the Program and the Stock Plan, and your agreement with all terms and conditions set forth in this Award Agreement, the Program and the Stock Plan, by signing below where indicated and returning this Award Agreement to Jennifer Kramer by [            ], 2015.

 

-2-

---

Please contact Gavin Beske at 703-312-9568 if you have any questions.

 

Richard J. Hendrix
President & CEO, FBR & Co.
Accepted and agreed as of             , 2015
By:
		Name:

 

-3-

---

SCHEDULE A

Subject to the terms and conditions of the Program and this Award Agreement, you shall earn a percentage, if any, of the shares of Common Stock subject to your Award of Performance Share Units as follows:

 

(a)

If the Compound Annual Growth Rate on the last day of the Performance Period is less than 6%, then you will earn 0% of the Performance Share Units subject to your Award;

 

(b)

If the Compound Annual Growth Rate on the last day of the Performance Period is equal to 6%, then you will earn 50% of the Performance Share Units subject to your Award;

 

(c)

If the Compound Annual Growth Rate on the last day of the Performance Period is greater than 6% but less than 9%, then you will earn the Applicable Performance Percentage of the Performance Share Units subject to your Award; and

 

(d)

If the Compound Annual Growth Rate on the last day of the Performance Period is equal to or greater than 9%, then you will earn 100% of the Performance Share Units subject to your Award.

For purposes of the foregoing, the following terms shall have the meanings set forth below:

“Applicable Performance Percentage” shall mean the sum, expressed as a percentage, of (i) 50% and (ii) the quotient, expressed as a percentage, obtained by dividing (A) the excess, if positive, of the applicable Compound Annual Growth Rate over 6% by (B) 6%.

“Tangible Book Value” shall equal, with respect to any measurement date, the book value of the Company excluding goodwill and intangible assets (whether net or otherwise), as computed in accordance with GAAP on a consolidated basis and each as disclosed in the Company’s publicly filed financial statements on Form 10-K or Form 10-Q, as applicable, for the most recently completed fiscal quarter ending on or prior to such measurement date. Tangible Book Value shall be adjusted to exclude the impact of any dividends declared or paid during the Performance Period by adding the aggregate amount of any such dividends to the calculation of book value of the Company as of the last day of the Performance Period.

“Tangible Book Value Per Share” shall mean, with respect to any measurement date, (i) the Company’s Tangible Book Value as of such measurement date divided by (ii) (A) the number of shares of Common Stock issued and outstanding as disclosed in the Company’s Form 10-K or Form 10-Q, as applicable, for the most recently completed fiscal quarter ending on or prior to such measurement date, plus (B) any restricted stock units in respect of Common Stock that are not subject to forfeiture, minus (C) any restricted shares of Common Stock that are subject to forfeiture. Tangible Book Value Per Share shall be adjusted to exclude the impact of any stock splits or reverse stock splits effected and/or stock dividends declared or paid during the Performance Period.

---

“Compound Annual Growth Rate” shall mean, with respect to the Performance Period, the compound annual growth rate, expressed as a percentage, of the Tangible Book Value Per Share during the Performance Period. For the avoidance of doubt, Compound Annual Growth Rate is measuring the growth (if any) during the Performance Period in Tangible Book Value Per Share from the Tangible Book Value Per Share as determined on January 1, 2015.

“Performance Period” shall mean the period commencing on January 1, 2015 and ending on December 31, 2017 (or, in the event of a Change in Control, the last day of the most recently completed fiscal quarter ending prior to the date of such Change in Control).

 

A-2

Exhibit 10.02

[            ], 2015            

[NAME]

Dear [FIRST NAME]:

The Compensation Committee of the Board of Directors (the “Committee”) of FBR & Co. (the “Company”) has established the FBR & Co. 2013 Performance Share Unit Program (the “Program”), and you have been selected by the Committee as an eligible participant in the Program. As such, you have been granted an Award under the Program as set forth in this letter, including Schedule A (this “Award Agreement”). Capitalized terms used herein that are not otherwise defined shall have the meaning given to them in the Program, a copy of which is attached hereto.

Awards under the Program are granted under Section 8 of the Stock Plan. To the extent earned pursuant to the terms of the Program and this Award Agreement, Performance Share Units shall be settled in shares of Common Stock available under the Stock Plan (unless the Committee determines to satisfy with a cash payment).

This Award Agreement provides the general terms of your Award and is subject in its entirety to the terms of the Program and the Stock Plan. You acknowledge having received a copy of the Program and the Stock Plan and, by signing this Award Agreement, you hereby consent to the terms and conditions of the Program, including without limitation Section 10 (Dispute Resolution) and Section 11 (Clawback) thereof, and the Stock Plan.

Grant Date: February [    ], 2015.

Award of Performance Share Units: Subject to the provisions of the Program and this Award Agreement, you are hereby awarded the opportunity to earn up to [                ] shares of Common Stock, with the actual number of shares of Common Stock earned to be determined based on the level of achievement of the Performance Goal for the Performance Period (each as specified below), subject to your continued employment through the Restriction Period except as otherwise provided in Section 9 of the Program.

Performance Goal: Subject to your continued employment through the Restriction Period, you will be eligible to earn a percentage of the Performance Share Units subject to your Award in accordance with Schedule A hereto on the date that the Committee determines whether and the extent to which the Company has achieved the Performance Goal set forth on Schedule A, which date shall be no later than 75 days after the end of the Performance Period.

Performance Period; Restriction Period: The Performance Period is the period during which the performance goal is measured, which for purposes of this Award is generally January 1, 2015 through December 31, 2017. The Restriction Period is the vesting or waiting period before you have the right to receive any shares of Common

---

Stock earned in respect of your Award. Your Award has a three-year Restriction Period that will run concurrently with the Performance Period and as such will lapse on December 31, 2017, subject to your continued employment with the Company through such date. Section 9 of the Program sets forth your rights to continue to earn and/or vest in all or a pro rata portion of your Award in the event of certain terminations of employment prior to the end of the Restriction Period.

Settlement of Awards: Except as otherwise provided in Section 9 of the Program, as soon as practicable after the Restriction Period ends (but no later than 75 days following the end of the Restriction Period) and subject to satisfaction of your tax obligation (as described in the “Taxes” section below), the Company will issue shares of Common Stock (or, in the Committee’s discretion, a cash payment based on the per share Fair Market Value (as defined in the Stock Plan)) to you in settlement of your earned Performance Share Units, subject to any proration that may apply pursuant to Section 9 of the Program. Until the level of achievement of the Performance Goals is determined and the Restriction Period lapses, and until the Performance Share Units you have earned (if any) are settled, you will not have any ownership rights in the shares of Common Stock underlying your Award.

Taxes: You are strongly advised to consult with your own tax professional concerning the tax implications of your Award based on your particular circumstances. The Company cannot provide you with tax advice. Your right to receive settlement of any earned Performance Share Units will be subject to payment by you of all applicable taxes.

Grant Acceptance: Please acknowledge your acceptance of your Award under the Program, your receipt of a copy of the Program and the Stock Plan, and your agreement with all terms and conditions set forth in this Award Agreement, the Program and the Stock Plan, by signing below where indicated and returning this Award Agreement to Jennifer Kramer by [            ], 2015.

Please contact Gavin Beske at 703-312-9568 if you have any questions.

 

Richard J. Hendrix
President & CEO, FBR & Co.
Accepted and agreed as of             , 2015
By:
		Name:

 

-2-

---

SCHEDULE A

Subject to the terms and conditions of the Program and this Award Agreement, you shall earn a percentage, if any, of the shares of Common Stock subject to your Award of Performance Share Units as follows:

 

(a)

If the Compound Annual Growth Rate on the last day of the Performance Period is less than 6%, then you will earn 0% of the Performance Share Units subject to your Award;

 

(b)

If the Compound Annual Growth Rate on the last day of the Performance Period is equal to 6%, then you will earn 50% of the Performance Share Units subject to your Award;

 

(c)

If the Compound Annual Growth Rate on the last day of the Performance Period is greater than 6% but less than 9%, then you will earn the Applicable Performance Percentage of the Performance Share Units subject to your Award; and

 

(d)

If the Compound Annual Growth Rate on the last day of the Performance Period is equal to or greater than 9%, then you will earn 100% of the Performance Share Units subject to your Award.

For purposes of the foregoing, the following terms shall have the meanings set forth below:

“Applicable Performance Percentage” shall mean the sum, expressed as a percentage, of (i) 50% and (ii) the quotient, expressed as a percentage, obtained by dividing (A) the excess, if positive, of the applicable Compound Annual Growth Rate over 6% by (B) 6%.

“Tangible Book Value” shall equal, with respect to any measurement date, the book value of the Company excluding goodwill and intangible assets (whether net or otherwise), as computed in accordance with GAAP on a consolidated basis and each as disclosed in the Company’s publicly filed financial statements on Form 10-K or Form 10-Q, as applicable, for the most recently completed fiscal quarter ending on or prior to such measurement date. Tangible Book Value shall be adjusted to exclude the impact of any dividends declared or paid during the Performance Period by adding the aggregate amount of any such dividends to the calculation of book value of the Company as of the last day of the Performance Period.

“Tangible Book Value Per Share” shall mean, with respect to any measurement date, (i) the Company’s Tangible Book Value as of such measurement date divided by (ii) (A) the number of shares of Common Stock issued and outstanding as disclosed in the Company’s Form 10-K or Form 10-Q, as applicable, for the most recently completed fiscal quarter ending on or prior to such measurement date, plus (B) any restricted stock units in respect of Common Stock that are not subject to forfeiture, minus (C) any restricted shares of Common Stock that are subject to forfeiture. Tangible Book Value Per Share shall be adjusted to exclude the impact of any stock splits or reverse stock splits effected and/or stock dividends declared or paid during the Performance Period.

---

“Compound Annual Growth Rate” shall mean, with respect to the Performance Period, the compound annual growth rate, expressed as a percentage, of the Tangible Book Value Per Share during the Performance Period. For the avoidance of doubt, Compound Annual Growth Rate is measuring the growth (if any) during the Performance Period in Tangible Book Value Per Share from the Tangible Book Value Per Share as determined on January 1, 2015.

“Performance Period” shall mean the period commencing on January 1, 2015 and ending on December 31, 2017 (or, in the event of a Change in Control, the last day of the most recently completed fiscal quarter ending prior to the date of such Change in Control).

 

A-2