Replies to post #44132 on Quantum Materials Corp. (fka QTMM)

[JSergio]

I am with you. I have a thought that Composite Operator accumulating the QTMM shares is Nitto Denko. By doing so, Nitto Denko wants to buy out Quantum Materials at the most favourable for Nitto Denko price.

[j45]

I agree with your assessment JB!
Sales are coming, i dont know about a sale OF the company. But under 5 bucks im not interested.

[j45]

JB, it appears that the buyout terms are the same as original contract:
5.4 Change in Control Termination .

(a) Notwithstanding any other provision contained herein, if the Executive's employment hereunder is terminated by the Executive for Good Reason or by the Company without Cause (other than on account of the Executive's death or Disability), in each case within twelve (12) months following a Change in Control, the Executive shall be entitled to receive the Accrued Amounts and subject to the Executive's compliance with Section 6 , Section 7 , Section 8 and Section 9 of this Agreement and his execution of a Release which becomes effective within fifty-two (52) days following the Termination Date, the Executive shall be entitled to receive a lump sum payment equal to 2.99 times the sum of the Executive's Base Salary and Target Bonus for the year in which the Termination Date occurs (or if greater, the year immediately preceding the year in which the Change in Control occurs), which shall be paid within seven (7) days following the effective date of the Release, and to the extent any equity granted to Executive that is subject to time vesting is not already vested as of the Termination Date, all unvested equity shall immediately vest and all restrictions on the transferability of such equity shall be lifted on the Termination Date.

[BigE1960]

I think protection in case of a company sale is a legitimate read of the immediate option vesting move. His golden handcuffs were removed so the company could recover 4.3MM shares? Maybe, but it's hard to imagine that is the whole story.

The base salary trigger and the Change in Control aren't terribly surprising. The immediate vesting of the option is curious though and it represents a significantly larger payout. (More than 50 times greater if we go with J45's $5/share scenario!)

If CL were planning to hang around for a while, it's hard to see why the immediate vesting would be of any value to him, unless the company were sold in the next year or two.

I could not find vesting language in the Change in Control, so this may have been a way to secure his major payday in advance of a pending deal. Okay, not quite "pending" because then I think they open themselves up to a shareholder lawsuit. Let's say a potential deal.