UNITED STATES
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
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Date of Report (Date of earliest event reported)
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August 5, 2011
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Warwick Valley Telephone Company
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(Exact name of registrant as specified in its charter)
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New York
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0-11174
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14-1160510
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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47 Main Street, Warwick, New York
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10990
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code
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845-986-8080
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Not Applicable
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(Former name or former address, if changed since last report)
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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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On August 5, 2011, as a condition to the closing of the transaction contemplated by that certain Asset Purchase Agreement, dated July 14, 2011, among Warwick Valley Telephone Company (the “Company”), Warwick Valley Networks, Inc., a New York corporation and wholly-owned subsidiary of the Company, and Alteva, LLC, a New Jersey limited liability company (“Alteva”), David Cuthbert was appointed Executive Vice President and Chief Operating Officer of the Company.
Prior to being appointed as the Company’s Executive Vice President and Chief Operating Officer, Mr. Cuthbert, age 37, served as President and Chief Executive Officer of Alteva since August 2010. Prior to becoming President and Chief Executive Officer of Alteva, Mr. Cuthbert served as Alteva’s Director of Operations, Vice President of Operations and Chief Operations Officer from 2006 to 2010. Prior to joining Alteva in 2006, Mr. Cuthbert served nine years in the United States Navy where he attained the rank of Officer, Special Operations (Separated as Lieutenant Commander, O-4) and received various service awards and other honors.
Effective August 5, 2011, the Company entered into an employment agreement with Mr. Cuthbert. Mr. Cuthbert’s employment agreement provides for a two year term beginning August 5, 2011. The agreement will automatically be renewed for successive one-year periods unless the Company or Mr. Cuthbert provides written notice of non-renewal to the other at least 60 days before the expiration of the initial term or any subsequent renewal period.
Mr. Cuthbert will receive an annual base salary of $235,000, subject to annual increases as the Company may determine. Mr. Cuthbert is eligible to receive an annual cash bonus and incentive compensation in the form of equity-based awards (stock options and restricted stock) under the Company’s Amended and Restated 2008 Long-Term Incentive Compensation Plan each year in accordance with the applicable plan approved by the board of directors of the Company, or the compensation committee of the board of directors, for such year. Mr. Cuthbert’s cash bonus plan for 2011 is targeted at 50% of his base salary and the incentive compensation component is targeted at 25,000 stock options and 5,000 shares of restricted stock, provided certain financial performance criteria are met in 2011. The elements of performance and the weighting associated with each financial metric will determine the applicable payout factor that will be used to calculate both the annual cash bonus and incentive compensation amounts. The board of directors of the Company, or the compensation committee of the board of directors, in its sole discretion may determine subsequent measurement metrics for 2011 and each subsequent year, and may also, in its sole discretion, change or eliminate the applicable plan at any time. In order to be eligible to receive a cash bonus and/or incentive compensation, Mr. Cuthbert must be employed by the Company on the respective payment date.
Mr. Cuthbert is eligible to participate in and receive benefits under the Company’s 401(k) saving plan, health and welfare plans, including medical and dental insurance, life insurance, and short-term and long-term insurance.
Mr. Cuthbert’s employment may be terminated at any time for any reason by the Company or Mr. Cuthbert upon written notice. Mr. Cuthbert will be entitled to compensation and benefits depending on the circumstances of the termination of employment. If Mr. Cuthbert’s employment is terminated without cause and not in connection with a change of control, Mr. Cuthbert will be entitled to a severance payment equal to 100% of his base salary in effect as of the date of his termination of employment. He will also receive the target amount of his annual cash bonus for the year in which the termination of employment occurs. Both of these amounts will be paid in a lump sum payment. Mr. Cuthbert will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination.
In the event that Mr. Cuthbert is terminated due to a change in control (as defined in his employment agreement), he will be entitled to the same compensation and benefits listed in the above paragraph except that he will be entitled to receive a cash payment equal to 150% of his annual base salary and target cash bonus. Both of these amounts will be paid in a lump sum payment. Mr. Cuthbert will also be entitled to the continuation of benefits for a period of one year following termination at the same cost he was charged for such benefits at the time of his termination. In addition, any of his unvested or restricted stock options or restricted stock awards will immediately vest.
A copy of Mr. Cuthbert’s employment agreement will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.
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.
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Warwick Valley Telephone Company
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Dated: August 10, 2011
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By:
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/s/ Duane W. Albro
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Duane W. Albro
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President and Chief Executive Officer
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