t15407_8k.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): August 27,
2007
AMERICA’S
CAR-MART, INC.
(Exact
name of registrant as specified in its charter)
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Texas
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0-14939
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63-0851141
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(State
or other jurisdiction of incorporation)
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(Commission
file number)
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(I.R.S.
Employer Identification No.)
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802
SE Plaza Avenue, Suite 200, Bentonville, Arkansas 72712
(Address
of principal executive offices, including zip code)
(479)
464-9944
(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:
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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 Principal Officers; Election of Directors; Appointment
of
Principal Officers
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On
August 27, 2007, America’s Car-Mart, Inc., a Texas corporation (the “Company”)
entered into new employment agreements with all of its named executive officers,
other than Tilman J. Falgout, III. However, the Company amended the
change in control provisions contained in Mr. Falgout’s employment agreement to
be identical to the new employment agreements and made certain revisions to
comply with Section 409A of the Internal Revenue Code. The new employment
agreements and the amendment were approved by the Company’s compensation
committee.
Each
of the new employment agreements contains an agreement not to compete, which
covers the term of employment and one year thereafter, a covenant against the
solicitation of employees and customers, which covers the term of employment
and
one year thereafter, a provision against the use and disclosure of trade
secrets, which covers the term of employment and an indefinite period
thereafter, and a provision against the use and disclosure of confidential
information, which covers the term of employment and two years
thereafter.
William
H.
Henderson. Pursuant to his new employment agreement, Mr.
Henderson agreed to serve as a senior executive officer of the Company’s
operating subsidiary for a term ending on April 30, 2010. Mr.
Henderson is entitled to an annual salary of $300,000, or such higher annual
salary approved by the Company’s board of directors. Mr. Henderson
has the right to participate in any operating subsidiary 401(k) profit sharing
plan, as well as the medical and life insurance programs offered by the
Company’s operating subsidiary. In addition, Mr. Henderson is
entitled to earn an annual bonus during the term beginning May 1, 2007 and
ending April 30, 2010. Such bonus will range between $40,000 to
$60,000 per fiscal year, be based upon the Company’s “economic profit per
share,” and depend on the Company attaining a minimum of 85% of its projected
economic profit, in which case a $40,000 bonus would be paid, and will increase
ratably up to 115% of our projected economic profit, in which case a $60,000
bonus would be paid.
Pursuant
to his new employment agreement, Mr. Henderson will receive 40,000 shares of
the
Company’s restricted common stock pursuant to America’s Car-Mart, Inc.’s Stock
Incentive Plan (the “Incentive Plan”), which shares will vest in equal
increments each year during the term of the employment agreement. The
restricted stock award will be made on the date of the 2007 annual meeting
of
stockholders, subject to approval by the Company’s stockholders of the proposed
amendment to the Incentive Plan. In addition, the Company is required
to make a cash payment to Mr. Henderson in an amount equal to 32% of the fair
market value of such restricted shares on the respective vesting dates to defray
taxes.
Mr.
Henderson will also receive, pursuant to the 2007 Stock Option Plan of America’s
Car-Mart, Inc. (the “2007 Plan”), non-qualified stock options to purchase
180,000 shares of the Company’s common stock, with vesting of such options
subject to the attainment of the Company’s projected economic profit per share
over the three fiscal years ending April 30, 2010. If the Company
attains 115% or 100% of its projected economic profit per share, 180,000 or
150,000 options will vest, respectively. No options will vest unless
the Company attains at least 85% of the applicable fiscal year’s projected
economic profit per share; provided, however, “give-backs and claw-backs” will
apply to the vesting of the options. For example, if the Company
attains 70% of its projected economic profit per share in year one and then
attains 120% of the projection in year two, Mr. Henderson will receive 94%
of
the two year total of options. Also, if the Company attains 90% and
75% of projected economic profit per share in year one and two, respectively,
then the options vested in year one would be forfeited after year two since
the
two-year average is less than 85%. The stock option award will be
made on the date of the 2007 annual meeting of stockholders, subject to approval
by the Company’s stockholders of the 2007 Plan.
Pursuant
to the terms of his employment agreement, if the Company terminates Mr.
Henderson without cause and not in connection with a change in control, Mr.
Henderson’s base salary will continue to be payable through the term of the
employment agreement, Mr. Henderson will be paid, within 60 days after
termination, the pro rata portion of any bonus earned through the date of
termination, and all unvested restricted stock and stock options will
immediately vest in full without regard to the achievement of any applicable
performance goals.
Eddie
L. Hight. Pursuant to his new employment agreement, Mr. Hight
agreed to serve as a senior executive officer of the Company’s operating
subsidiary for a term ending on April 30, 2010. Mr. Hight is entitled
to an annual salary of $185,000, or such higher annual salary approved by the
Company’s board of directors. Mr. Hight has the right to participate
in any operating subsidiary 401(k) profit sharing plan, as well as the medical
and life insurance programs offered by the Company’s operating
subsidiary. In addition, Mr. Hight is entitled to earn an annual
bonus during the term beginning May 1, 2007 and ending April 30,
2010. Such bonus will range between $24,000 to $36,000 per fiscal
year, be based upon the Company’s “economic profit per share,” and depend on the
Company attaining a minimum of 85% of its projected economic profit, in which
case a $24,000 bonus would be paid, and will increase ratably up to 115% of
the
Company’s projected economic profit, in which case a $36,000 bonus would be
paid.
Pursuant
to his new employment agreement, Mr. Hight will receive 25,000 shares of the
Company’s restricted common stock pursuant to the Incentive Plan, which shares
will vest in equal increments each year during the term of the employment
agreement. The restricted stock award will be made on the date of the
2007 annual meeting of stockholders, subject to approval by the Company’s
stockholders of the proposed amendment to the Incentive Plan. In
addition, the Company is required to make a cash payment to Mr. Hight in an
amount equal to 32% of the fair market value of such restricted shares on the
respective vesting dates to defray taxes.
Mr.
Hight will also receive, pursuant to the Company’s 2007 Plan, non-qualified
stock options to purchase 108,000 shares of the Company’s common stock, with
vesting of such options subject to the attainment of the Company’s projected
economic profit per share over the three fiscal years ending April 30,
2010. If the Company attains 115% or 100% of its projected economic
profit per share, 108,000 or 90,000 options will vest,
respectively. No options will vest unless the Company attains at
least 85% of the applicable fiscal year’s projected economic profit per share;
provided, however, “give-backs and claw-backs” will apply to the vesting of the
options as described above with respect to Mr. Henderson’s
agreement. The stock option award will be made on the date of the
2007 annual meeting of stockholders, subject to approval by the Company’s
stockholders of the 2007 Plan.
Pursuant
to the terms of his employment agreement, if the Company terminates Mr. Hight
without cause and not in connection with a change in control, Mr. Hight’s base
salary will continue to be payable through the term of the employment agreement,
Mr. Hight will be paid, within 60 days after termination, the pro rata portion
of any bonus earned through the date of termination, and all unvested restricted
stock and stock options will immediately vest in full without regard to the
achievement of any applicable performance goals.
Jeffrey
A. Williams. Pursuant to his new employment agreement, Mr.
Williams agreed to serve as a senior executive officer of the Company’s
operating subsidiary for a term ending on April 30, 2010. Mr.
Williams is entitled to an annual salary of $180,000, or such higher annual
salary approved by the Company’s board of directors. Mr. Williams has
the right to participate in any operating subsidiary 401(k) profit sharing
plan,
as well as the medical and life insurance programs offered by the Company’s
operating subsidiary. In addition, Mr. Williams is entitled to earn
an annual bonus during the term beginning May 1, 2007 and ending April 30,
2010. Such bonus will range between $20,000 to $30,000 per fiscal
year, be based upon the Company’s “economic profit per share,” and depend on the
Company attaining a minimum of 85% of its projected economic profit, in which
case a $20,000 bonus would be paid, and will increase ratably up to 115% of
our
projected economic profit, in which case a $30,000 bonus would be
paid.
Mr.
Williams will also receive, pursuant to the Company’s 2007 Plan, non-qualified
stock options to purchase 72,000 shares of the Company’s common stock, with
vesting of such options subject to the attainment of the Company’s projected
economic profit per share over the three fiscal years ending April 30,
2010. If the Company attains 115% or 100% of its projected economic
profit per share, 72,000 or 60,000 options will vest,
respectively. No options will vest unless the Company attains at
least 85% of the applicable fiscal year’s projected economic profit per share;
provided, however, “give-backs and claw-backs” will apply to the vesting of the
options as described above with respect to Mr. Henderson’s
agreement. The stock option award will be made on the date of the
2007 annual meeting of stockholders, subject to approval by the Company’s
stockholders of the 2007 Plan.
Pursuant
to the terms of his employment agreement, if the Company terminates Mr. Williams
without cause and not in connection with a change in control, Mr. Williams’ base
salary will continue to be payable through the term of the employment agreement,
Mr. Williams will be paid, within 60 days after termination, the pro rata
portion of any bonus earned through the date of termination, and all unvested
restricted stock and stock options will immediately vest in full without regard
to the achievement of any applicable performance goals.
Change
in Control Provisions.
The employment agreements of the Company’s named executive officers contain
change in control provisions entitling them, upon the occurrence of certain
events, to a portion of their base salary and the immediate vesting of stock
options and restricted stock. Under the terms of the employment
agreements, a change in control generally means the following:
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the
acquisition by an individual, entity or group (within the meaning
of
Section 409A of the Internal Revenue Code (the “Code”)) of ownership of
the Company’s stock that, together with stock held by such person,
constitutes more than 50% of the total fair market value of total
voting
power of the Company’s stock;
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·
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the
acquisition by an individual, entity or group (within the meaning
of
Section 409A of the Code) during the twelve-month period ending on
the
date of the most recent acquisition by such person of ownership of
the
Company’s stock possessing 35% or more of the total voting power of the
Company’s stock;
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the
replacement of a majority of the members of the Company’s board of
directors during any twelve-month period by directors whose appointment
or
election is not endorsed by a majority of the members of the Company’s
board of directors prior to the date of the appointment or election;
or
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·
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the
acquisition by an individual, entity or group (within the meaning
of
Section 409A of the Code) during the twelve-month period ending on
the
date of the most recent acquisition by such person of the Company’s assets
that have a total gross fair market value equal to or more than 40%
of the
total gross fair market value of all of the Company’s assets immediately
prior to such acquisition.
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In
the event of a change in control while the named executive officer is still
employed under his employment agreement, on the date the change in control
becomes effective, the Company must pay the named executive officer a lump
sum
cash payment equal to 2.99 times the “base amount” with respect to his
compensation and all unvested restricted stock and stock options previously
granted vest in full, without regard to the achievement of any applicable
performance goals. Such payments are referred to as change in control
payments. If, prior to the change in control, the Company terminates
the named executive officer without cause in connection with the change in
control, then, for purposes of his change in control payments, such named
executive officer will be treated as being employed on the date the change
in
control becomes effective. If it is determined that any payment made
in connection with a change in control or termination thereafter would be
subject to excise taxes, the named executive officer will be entitled to receive
a one-time additional payment in an amount reasonably determined by an
independent accounting firm to be equal to such excise tax. Payments
are payable even if such named executive officer is not eligible for termination
benefits under his employment agreement. In the event of any
underpayment of such amount, the amount of such underpayment will be promptly
paid by the Company. In the event of any overpayment, the named
executive officer will, at the Company’s direction and expense, take steps as
are reasonably necessary to correct such overpayment; provided, however, that
the named executive officer will in no event be obligated to return to the
Company an amount greater than the net after-tax portion of the overpayment
and
the applicable provisions of the employment agreement will be interpreted in
a
manner consistent with the intent of making the named executive officer whole,
on an after-tax basis.
If
a named executive officer is a “specified employee” within the meaning of
Section 409A of the Code, any benefits or payments that constitute a “deferral
of compensation” under the Section 409A of the Code, become payable as a result
of the named executive officer’s termination for reasons other than death, and
become due under the employment agreement during the first six months after
termination of employment will be delayed and all such delayed payments will
be
paid to such named executive officers in full in the seventh month after the
date of termination and all subsequent payments will be paid in accordance
with
their original payment schedule.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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America’s
Car-Mart, Inc. |
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Date: August
31, 2007
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/s/
Jeffrey A.
Williams
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Jeffrey
A. Williams
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Chief
Financial Officer and Secretary
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(Principal
Financial and Accounting Officer)
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