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EX-99.1 - O'BRIEN CONTRACT AMENDMENT DATED MARCH 29, 2012 - DITECH HOLDING Corpd326933dex991.htm

 

 

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

Date of Report (Date of earliest event reported): March 9, 2012

 

 

Walter Investment Management Corp.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-13417   13-3950486

(State or other jurisdiction

of incorporation or organization)

 

(Primary Standard Industrial Classification

Code Number)

 

(I.R.S. Employer

Identification No.)

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

(813) 421-7605

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Former Name or Former Address, if Changed from Last Report)

 

 

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 14a-12 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 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 29, 2012, the Board of Directors of Walter Investment Management Corp. (the “Company”) approved, upon the recommendation of the Board’s Compensation and Human Resources Committee, the Company’s 2012 Management Inventive Plan (“2012 MIP”) pursuant to the Company’s 2011 Omnibus Incentive Plan.

The 2012 MIP for the CEO and named executive officers (“NEOs”) is based 75% on corporate performance and 25% on the achievement of personal goals (with an additional 10% discretionary potential awarded by the CEO to other NEOs). The 2012 corporate performance financial metric (which accounts for 75% of the total bonus potential), is earnings before interest, taxes, depreciation and amortization (“Pro Forma Adjusted EBITDA”). Pro Forma Adjusted EBITDA is defined with specificity in the Company’s credit agreements and is generally defined as the Company’s income(loss) before taxes with an add back for depreciation, amortization and interest expense on corporate debt. This amount is then adjusted for other non-cash items, unusual and infrequently occurring items such as Green Tree transaction and integration costs, pro forma adjustments reflecting the impact from items such as Green Tree synergies and other transaction related activities and the cash flow impact of both the Company’s residual and non-residual trusts to arrive at Pro Forma Adjusted EBITDA.

The target Pro Forma Adjusted EBITDA, at which participants will receive 100% of their individual target level for the corporate performance component of the annual bonus (equal to 75% of total target bonus ), is $235.8 million. Should corporate Pro Forma Adjusted EBITDA exceed this amount, the bonus paid for this component will increase up to a cap that will be achieved at a Pro Forma Adjusted EBITDA level of $245.8 million. Should corporate Pro Forma Adjusted EBITDA be less than target, then the corporate performance component of the bonus will be reduced to a Pro Forma Adjusted EBITDA level of $215.8 million. Should Pro Forma Adjusted EBITDA be less than $215.8 million, no bonus will be paid for the corporate performance component. The maximum payout for our NEOs ranges from 180% to 300% of base salary depending upon position.

 

2012 MIP Corporate Performance Range of Payouts (1)

 

NEO

   Minimum
Corporate
Pro Forma Adjusted EBITDA
$215.8 million

($)
     Target
Corporate
Pro Forma Adjusted EBITDA
$235.8 million

($)
     Maximum
Corporate
Pro Forma Adjusted EBITDA
$245.8 million

($)
 

O’Brien

     187,906         772,500         1,158,750   

Cauthen

     37,500         337,500         612,000   

Dixon

     37,500         336,663         609,000   

Perez

     33,750         225,000         405,000   

Libman

     145,946         600,000         900,000   

Anderson

     145,946         600,000         900,000   

 

(1) Should the 2012 Pro Forma Adjusted EBITDA fall between the specified levels, the payout will be adjusted pursuant to a predetermined sliding scale for each participant.

The 25% individual performance component of the 2012 MIP payout will be based upon the achievement of individual goals established for each NEO. As with the corporate component, participants may exceed their target levels, up to a cap, with exceptional performances, and the individual component will be reduced should they fail to meet their individual goals. Individual performance that fails to meet a minimum threshold will result in the payment of no bonus for the individual performance component.

 

2012 MIP Individual Performance Range of Payouts

 

NEO

   Minimum      Target      Maximum  

O’Brien

     62,635         257,500         386,250   

Cauthen

     12,500         112,500         204,000   

Dixon

     12,500         112,221         203,000   

Perez

     11,250         75,000         135,000   

Libman

     48,649         200,000         300,000   

Anderson

     48,649         200,000         300,000   


Each NEO’s payout under the 2012 MIP will be the sum of the corporate and individual performance components. Because these components are independent of one another it is impossible to depict all of the potential payouts in a tabular form; however, assuming that the components are consistent with one another, the following table presents the total 2012 MIP payouts for the Company’s NEOs at minimum, target and maximum corporate and individual performance levels:

 

2012 MIP Range of Total Payouts

 

NEO

        Corporate
($)
     Individual
($)
     Total
($)
 

O’Brien

   Minimum      187,906         62,635         250,541   
   Target      772,500         257,500         1,030,000   
   Maximum      1,158,750         386,250         1,545,000   

Cauthen

   Minimum      37,500         12,500         50,000   
   Target      337,500         112,500         450,000   
   Maximum      612,000         204,000         816,000   

Dixon

   Minimum      37,500         12,500         50,000   
   Target      336,663         112,221         448,884   
   Maximum      609,000         203,000         812,000   

Perez

   Minimum      33,750         11,250         45,000   
   Target      225,000         75,000         300,000   
   Maximum      405,000         135,000         540,000   

Libman

   Minimum      145,946         48,649         194,595   
   Target      600,000         200,000         800,000   
   Maximum      900,000         300,000         1,200,000   

Anderson

   Minimum      145,946         48,649         194,595   
   Target      600,000         200,000         800,000   
   Maximum      900,000         300,000         1,200,000   

On March 29, 2012, in connection with the adoption of the 2012 MIP, the Company amended the Employment Contract of the Company’s Chairman and CEO, Mark O’Brien, to increase the size of his annual bonus potential from a target of 100% of base salary with a maximum bonus potential of 200% of base salary, to a target potential of 200% of base salary with a maximum potential of 300% of base salary. In addition, the contract was revised to reflect a merit increase in base salary that had been granted in 2011 from $500,000 to $515,000. The form of contract amendment is attached hereto as Exhibit 99.1.

Item 8.01 Other Events

On March 9, 2012, Mark O’Brien, the Company’s Chairman and CEO, and Charles Cauthen, the Company’s Chief Operating Officer and Chief Financial Officer, entered into Rule 10b5-1 Plans with UBS Financial Services, Inc. (“UBSFS”) pursuant to which they instructed UBSFS to sell sufficient shares of Company stock owned by them to cover withholding tax obligations and related brokerage commissions and fees to be incurred at such time as the restrictions on previously awarded grants of restricted stock units lapse. The plans relate to the awards set forth in the following table:

 

     Date of
Grant
     Date of
Lapse
     Number of
Shares
Lapsed
     Sale
Period
Start
Date
     Sale
Period
End
Date
     Quantity
of Shares
to be Sold
     Price  

Mark O’Brien

     4/20/2009         4/17/2012         513,909         4/18/12         4/17/13         *         Market   

Charles Cauthen

     4/20/2009         4/17/2012         171,234         4/18/12         4/17/13         *         Market   

 

* Sufficient shares to cover tax obligations and related brokerage commissions and fees on the shares on which restrictions have lapsed

The information contained in these Items 5.02 and 8.01 is being furnished to and not filed with the Securities and Exchange Commission, and shall not be incorporated by reference into a registration statement or other document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.


Item 9.01 Exhibits

 

(d) Exhibits

 

Exhibit

No.

   Note    Description
99.1       O’Brien Contract Amendment dated March 29, 2012


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.

 

WALTER INVESTMENT MANAGEMENT CORP.  
Date: April 3, 2012   By:  

/s/ Stuart Boyd

    Stuart Boyd, Vice President,
    General Counsel and Secretary