Blog: VERTIV HOLDINGS CO : Change in Directors or Principal Officers, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) –

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;

Appointment of Certain Officers; Compensatory Arrangements of Certain


(e) On November 18, 2022, the Compensation Committee (the “Compensation
Committee”) of the Board of Directors (the “Board”) and the Board of Vertiv
Holdings Co (the “Company”) granted special, one-time long-term performance
awards (each, a “Special Performance Award”) under the Company’s 2020 Stock
Incentive Plan to certain executives of the Company, including, but not limited
to, (i) Giordano Albertazzi, the Chief Operating Officer and President, Americas
and incoming Chief Executive Officer, (ii) David Fallon, Chief Financial
Officer, (iii) Stephen Liang, Chief Technology Officer, and (iv) Stephanie Gill,
Chief Legal Counsel (collectively, the “Executives”).

The Board and Compensation Committee granted the Special Performance Awards to
incentivize the executive management team to achieve multi-year key goals for
the business and to promote the long-term retention of the business leaders that
the Company needs to attain such goals. The Special Performance Awards vest, if
earned, over a four-year period subject to the achievement of strategic adjusted
operating profit targets in each of 2023, 2024, and 2025 (each, a “Performance
Period”) and continued employment with the Company through January 1, 2027 (the
“Vesting Date”), with certain limited exceptions. The Company defines “adjusted
operating profit” as operating profit (loss), adjusted to exclude amortization
of intangibles and certain significant non-recurring expenses (“AOP”).

Under the terms of the awards, each Executive has an opportunity to earn certain
amounts (shown at target award levels for each Performance Period): $2,250,000
(Mr. Albertazzi), $1,290,000 (Mr. Fallon), $1,000,000 (Mr. Liang), and $560,000
(Ms. Gill). For the awards to be earned, a target performance goal of the
Company’s AOP (“Target AOP”) must be achieved for each Performance Period.
Target AOP for each Performance Period will be: (i) 2023: $1,000,000,000,
(ii) 2024: $1,400,000,000, and (iii) 2025: $1,750,000,000. The Target AOP is
considered to be a stretch goal by the Board, thereby incentivizing management
to exceed any AOP outlook that Vertiv has publicly disclosed previously. If
Target AOP is not achieved for a Performance Period, no amounts will be earned
for such period. In any given Performance Year, each Executive will earn an
additional 20% of their respective target award level for each $50 million
increment that AOP performance exceeds the Target AOP. After the end of the
three Performance Periods, the Compensation Committee and Board will aggregate
the dollar amounts earned for each Executive, and such total dollar amount will
be converted into a number of restricted stock units (“RSUs”) under the 2020
Stock Incentive Plan (determined by dividing each Executive’s aggregate dollar
amount by the closing stock price of the Company’s common stock on the first
business day after the release of earnings for fiscal year 2025).

Such RSUs will vest on the Vesting Date, subject to the Executive’s continued
employment with the Company through the Vesting Date except in the event of
death, disability or a qualifying termination (without cause or for good reason)
within two years following a change in control (in circumstances in which the
awards are assumed by the acquiror in the transaction). Any amounts earned for
completed Performance Periods prior to death or disability will not be forfeited
and the Executive (or his or her estate) will be entitled to the related RSUs
(but any remaining balance of such awards attributable to current or future
Performance Periods will be cancelled and forfeited). In the event of a
qualifying termination associated with a change in control, or in the event of a
change in control in which the Special Performance Awards are not assumed by the
acquiror, the amounts earned will be determined as follows: (i) for any
completed Performance Periods, the amount earned will be based on actual AOP
performance for such periods and (ii) for current and future Performance
Periods, such amounts will be deemed earned at target.

Consistent with the Company’s other equity awards, the Special Performance
Awards are subject to (i) forfeiture in the event of a breach of the Executive’s
non-competition, non-solicitation, and confidentiality obligations to the
Company, and (ii) the Company’s clawback policy.

The foregoing description of the Special Performance Awards does not purport to
be complete and is qualified in its entirety by reference to the form of Special
Performance Award Agreement, a copy of which is attached hereto as Exhibit 10.1,
and the terms of which are incorporated herein by reference.


Item 7.01 Regulation FD

The Special Performance Awards were put in place to incentivize our senior
management to achieve stretch targets for AOP. The Target AOP goals are not
intended to be financial guidance for any of the years covered by the Special
Performance Awards, but rather represent significant, challenging but achievable
upside to the business, based on historical results. The Company’s operating
profit outlook for 2023 remains at $530 million to $550 million and AOP outlook
for 2023 remains at $730 million to $750 million. Achievement of the Target AOP
levels will be dependent upon managing continued supply chain challenges to
support shipment of our significant backlog, booking new orders to drive
“book-and-ship” sales, driving new pricing and executing additional productivity

This Current Report contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that are subject
to risks and uncertainties. The factors that could cause actual results to
differ materially from the forward-looking statements made by the Company
include those factors discussed herein, as well as the items discussed in the
Company’s periodic filings with the Securities and Exchange Commission (the
“SEC”), including Exhibit 99.1 to the Company’s Current Report on Form 8-K
furnished to the SEC on October 26, 2022 (the “Earnings Release”). This Current
Report also refers to the Company’s AOP outlook for 2023, which is a non-GAAP
measure. For a reconciliation to operating profit and an explanation of the
non-GAAP measure and reasons for its use, please refer to the Earnings Release.

The information furnished pursuant to this Item 7.01, together with any
information incorporated by reference herein, shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange
Act”) or otherwise subject to the liabilities under that Section and shall not
be deemed to be incorporated by reference into any filing of the Company under
the Securities Act of 1933 or the Exchange Act.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

  No.     Exhibit Description

10.1        Form of Special Performance Award Agreement

104       Cover Page Interactive Data File (embedded within Inline XBRL document)


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