Accordingly, they are classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature. Profits Interests awards reflected in the table above as (i) “Unexercisable” are Profits Interests that have not yet time-vested, (ii) “Unearned” are Profits Interests that have not yet fully vested, and (iii) “Exercisable” are Profits Interests that have fully vested and remain outstanding.
(7)
| Represents RSUs granted to the applicable Named Executive Officer which vest in substantially equal installments on each of the first three anniversaries of the applicable vesting commencement date, subject to continued employment through each such vesting date. The applicable vesting commencement dates for such RSU grants are set forth in the table above. |
Profits Interests
During fiscal year 2021, following the consummation of the transaction between us, Ignite Aggregator LP, and our then-existing equity holders entering into a Securities Purchase Agreement, certain of our executives received awards of Profits Interests pursuant to the TCO Group Holdings, L.P. Equity Incentive Plan, as it may be amended from time to time (the “Holdings Incentive Plan”), which are intended to be treated as “profits interests” for U.S. federal income tax purposes.
The Holdings Incentive Plan is administered by the Board of Holdings. The Holdings Board has the authority to administer and interpret the Holdings Incentive Plan, to determine the individuals who are eligible for a grant of the Profits Interests, to determine, alter, amend, modify or waive the terms and conditions of any award of Profits Interests, and to prescribe the purchase price or Hurdle Amount (as defined in the Holdings Incentive Plan) applicable to any award of Profits Interests.
During fiscal year 2024, Mr. Blair, Mr. Adams, and Ms. D’Amato each received a grant of Profits Interests, as follows: Mr. Blair received a grant of 1,100,000 Profits Interests, Mr. Adams received a grant of 863,700 Profits Interests, and Ms. D’Amato received a grant of 250,000 Profits Interests. 50% of such Profits Interests are subject to time-based vesting, vesting annually in substantially equal installments over four years on the first four anniversaries of the applicable vesting commencement date (i.e., July 10, 2023 for Mr. Adams, August 30, 2023 for Mr. Blair, and December 18, 2023 for Ms. D’Amato), subject to continued employment through each such vesting date. The remaining 50% of such Profits Interests are subject to performance-based vesting, and will vest as follows: (i) 33% if, upon the consummation of a Change of Control of Holdings, Ignite Aggregator LP, the vehicle through which Apax Partners holds its investment in TCO Group Holdings, achieves a multiple on invested capital, as calculated pursuant to the Second Amended and Restated Limited Partnership Agreement of TCO Group Holdings (“MOIC”) equal to at least 2x; and (ii) 100% if, upon the consummation of a Change of Control, Ignite Aggregator LP achieves a MOIC equal to at least 2.5x, in each case, subject to continued employment through the date of such Change of Control. None of the performance-based Profits Interests will vest if Ignite Aggregator LP achieves a MOIC less than 2x as of a Change of Control.
The time-based vesting Profits Interests are subject to (A) pro-rata vesting upon a termination without “Cause,” due to death or disability, or for “Good Reason” (each as defined in the applicable employment agreement) that, in each case, occurs prior to the one-year anniversary of the applicable vesting commencement date, and (B) 100% acceleration upon a Change of Control of Holdings, subject to continued service through the date of such Change of Control. The performance-based vesting Profits Interests will remain eligible to vest following a termination without “Cause,” due to death or disability, or for “Good Reason” that, in each case, occurs within the 120-day period preceding the execution of a definitive agreement that ultimately results in such Change of Control.
A “Change of Control” of Holdings is generally defined as (a) the sale of all or substantially all of the assets (including shares of common stock of the Company) of Holdings and its subsidiaries on a consolidated basis to unaffiliated parties, (b) a merger, reorganization, consolidation or other similar corporate transaction of Holdings as a result of which, unaffiliated parties beneficially own a majority of the outstanding voting securities, and rights to the majority of the residual economic interests in the common equity, of a successor entity, or (c) the acquisition of a majority of the outstanding voting securities, and rights to the majority of the residual economic interests in the common equity, of Holdings by unaffiliated parties.
Potential Payments upon Termination or Change in Control
Severance Benefits
We are party to employment agreements with all of our Named Executive Officers which among other terms and conditions, set forth each Named Executive Officer’s initial annual base salary and target annual bonus opportunity (with the rate of each for fiscal year 2024 set forth above) and provide for at-will employment, subject to the severance entitlements described below.
