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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 12, 2024
LIBERTY LATIN AMERICA LTD.
(Exact Name of Registrant as Specified in Charter)
| | | | | | | | | | | | | | |
| Bermuda | | 001-38335 | | 98-1386359 |
(State or other jurisdiction
of incorporation) | | (Commission File Number) | | (IRS Employer
Identification #) |
Clarendon House,
2 Church Street,
Hamilton HM 11, Bermuda
(Address of Principal Executive Office)
(303) 925-6000
(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:
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered |
| Class A Common Shares, par value $0.01 per share | LILA | The NASDAQ Stock Market LLC |
| Class C Common Shares, par value $0.01 per share | LILAK | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2024 Annual Performance Bonus
On March 12, 2024, the Compensation Committee (the “Committee”) of the Board of Directors of Liberty Latin America Ltd. (the “Company”) approved performance goals for the year ending December 31, 2024 for annual performance awards (the “2024 Performance Awards”) to Balan Nair, the Company’s President and Chief Executive Officer, Christopher Noyes, the Company’s Chief Financial Officer, Aamir Hussain, the Company’s Chief Technology and Product Officer, John Winter, the Company’s Chief Legal Officer, and Rocio Lorenzo, General Manager of Cable & Wireless Panama S.A. (“CWP”), a subsidiary of the Company, who were identified as named executive officers in the Company’s proxy statement for its 2023 annual general meeting of shareholders (collectively, the “NEOs”).
Payment of the 2024 Performance Awards will be based on achievement of the following performance metrics for the year ending December 31, 2024:
•budgeted revenue growth, weighted 25%;
•budgeted operating free cash flow (“OFCF”), weighted 60%;
•governance objectives focused on compliance and improvements in the Company’s internal control framework, weighted 15%.
The budgeted revenue growth metric for Messrs. Nair, Noyes, Hussain and Winter will be on a consolidated basis. The budgeted revenue growth metric for Ms. Lorenzo will be based on revenue growth at CWP.
For purposes of the 2024 Performance Awards and the performance share unit (“PSU”) objectives discussed below, OFCF means operating income before depreciation and amortization, share-based compensation, provisions and provision releases related to significant litigation, and impairment, restructuring and other operating items less property and equipment additions.
Based on the achievement of these performance metrics, the NEOs may earn a payout of up to 150% of the target bonus amount for over-performance against budget/target and, if less than 25% performance is achieved for the revenue or OFCF goals, then no payout would be earned for that particular metric. The Company has also created a recognition program for high performers who are eligible to receive, based on personal performance, an increased bonus of 130% of the annual bonus result, subject to Committee approval.
In connection with the 2024 Performance Awards, the Company encourages increased share ownership among its executive team to enhance alignment between the executives and shareholder returns. As a result, the Committee implemented a shareholding incentive program that allows the Company’s executive officers, including the NEOs, to receive up to 50% of their 2024 annual performance awards in Company common shares in lieu of cash. Executives receiving common shares in respect of their 2024 Performance Awards will also receive restricted share units equal to 12.5% of the common shares they earn pursuant to the 2024 Performance Awards. The restricted share units vest one year after the grant date provided that the executive holds all of the common shares issued in respect of the 2024 Performance Awards through that period.
CEO PSU Award
As previously disclosed in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 27, 2022, Mr. Nair received an award of Class B common shares (“LILAB”) and PSUs in connection with the Company’s and Mr. Nair’s entry into an amended and restated employment agreement. The LILAB award was split into three installments. The first two installments vested on July 28, 2022 and March 15, 2023, and the final installment consisted of 312,500 LILAB PSUs that would vest, subject to Mr. Nair’s achievement of his 2023 performance objectives, in March 2024.
On March 12, 2024, the Committee reviewed Mr. Nair’s and the Company’s 2023 performance and approved (i) vesting of 50% (or 156,250) of the 312,500 LILAB PSUs and (ii) an amendment to the LILAB award that conditions vesting of the remaining 50% of the 312,500 LILAB PSUs on Mr. Nair’s achievement of his 2024 performance objectives and the Committee’s assessment that Mr. Nair’s 2024 performance was strong. Mr. Nair’s 2024 performance objectives for the amended award focus on the Company’s completion of certain operational milestones, improvements in SOX compliance and growth in revenue, operating cash flow and OFCF in 2024. If earned, 156,250 LILAB PSUs would vest on March 15, 2025.
“Operating cash flow” is defined as operating income before depreciation and amortization, share-based compensation, provisions and provision releases related to significant litigation and impairment, restructuring and other operating items, as
adjusted for events such as acquisitions, dispositions and changes in foreign currency exchange rates and accounting principles or policies that affect comparability.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| | | | | |
| Exhibit No. | Exhibit Name |
| |
| 101.SCH | XBRL Inline Taxonomy Extension Schema Document. |
| 101.DEF | XBRL Inline Taxonomy Extension Definition Linkbase. |
| 101.LAB | XBRL Inline Taxonomy Extension Label Linkbase Document. |
| 101.PRE | XBRL Inline Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File.* (formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURE
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.
| | | | | | | | |
| | LIBERTY LATIN AMERICA LTD. |
| | |
| | By: | /s/ JOHN M. WINTER |
| | | John M. Winter |
| | Senior Vice President, Chief Legal Officer & Secretary |
Date: March 18, 2024