Form 8-K

 

 

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): February 4, 2015

 

 

SABRE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36422   20-8647322

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

3150 Sabre Drive

Southlake, TX

  76092
(Address of principal executive offices)   (Zip Code)

(682) 605-1000

(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))

 

 

 


Item 1.01 Entry into a Material Definitive Agreement

On February 4, 2015, Sabre Corporation (the “Corporation”) entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters listed in Schedule I to the Underwriting Agreement (the “Underwriters”) and the selling stockholders listed in Schedule II to the Underwriting Agreement (the “Selling Stockholders”), relating to the offering (the “Offering”) by the Selling Stockholders of 23,800,000 shares of the Corporation’s common stock, par value $0.01 per share pursuant to the Corporation’s Registration Statement on Form S-1 (File No. 333-201682), as amended. Certain of the Selling Stockholders also granted the Underwriters an option to purchase up to 3,570,000 additional shares.

A copy of the Underwriting Agreement is filed as Exhibit 1.1 herewith and incorporated by reference herein.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(f) The Compensation Committee approved the cash bonus payments under the Corporation’s 2014 Executive Incentive Program (the “EIP”) at its meeting on February 6, 2015. Recipients of these payments include the following individuals who served as (i) the Corporation’s principal executive officer at any time during 2014, (ii) the Corporation’s principal financial officer at any time during 2014, and (iii) the three other most highly-compensated executive officers who were serving as the Corporation’s executive officers as of December 31, 2014. For 2014, these individuals were:

 

    Tom Klein, President and CEO,

 

    Richard Simonson, Executive Vice President and CFO,

 

    Rachel Gonzalez, Executive Vice President and General Counsel,

 

    Deborah Kerr, Executive Vice President and Chief Product and Technology Officer, and

 

    Gregory Webb, Executive Vice President and President, Sabre Travel Network.

These executive officers are collectively referred to below as the “Named Executive Officers.” In addition, certain compensation information is provided in the Summary Compensation Table regarding Carl Sparks, the Corporation’s former Executive Vice President and President and CEO, Travelocity, whose employment terminated on April 28, 2014. References in the following discussion to the “Named Executive Officers” do not include Mr. Sparks unless specified otherwise.

Based on the Corporation’s 2014 financial performance, the 2014 cash bonus payments for the Named Executive Officers ranged from approximately 79.4% to approximately 85.5% of their target annual cash bonus opportunities as summarized below.

 

Named Executive Officer

   2014 Target
Cash Bonus
Opportunity
    2014 Actual
Cash Bonus Payment
     Actual Cash Bonus
Payment as Percentage
of

Target
Cash Bonus Award
 

Mr. Klein

   $ 1,223,114 (1)    $ 1,045,762         85.5

Mr. Simonson

   $ 489,231      $ 418,293         85.5

Ms. Gonzalez

   $ 100,154 (2)    $ 85,632         85.5

Ms. Kerr

   $ 421,538      $ 360,414         85.5

Mr. Webb

   $ 392,615      $ 311,736         79.4

 

(1) The blending of Mr. Klein’s target annual cash bonus opportunity for the period before August 11, 2014 (125% of his base salary) with his target annual cash bonus opportunity for the remainder of the year starting on August 11, 2014 (150% of his base salary for the remainder of 2014) resulted in a blended target annual cash bonus opportunity of 135% of his actual base salary for 2014, or $1,223,114.
(2) Ms. Gonzalez’s target annual cash bonus opportunity is prorated to reflect her September 22, 2014 start date.


The cash bonuses actually paid to the Named Executive Officers for 2014 are set forth in the “2014 Summary Compensation Table” below.

2014 Summary Compensation Table

The following table sets forth the compensation paid to, received by, or earned during fiscal years 2014 and 2013 by the Named Executive Officers:

 

Name and Principal Position

  Fiscal
Year
    Salary
($)
    Bonus
($)(1)
    Stock Awards
($)(2)
    Option
Awards

($)(2)
    Non-Equity
Incentive

Plan
Compensation
($)(3)
    Change in
Pension

Value and
Non-qualified
Deferred
Compensation
Earnings(4)
    All Other
Compensation
($)(5)
    Total
($)
 

Tom Klein

    2014      $ 907,692        —        $ 3,825,008      $ 1,274,999      $ 1,045,762      $ 45,100      $ 24,114      $ 7,122,675   

President and CEO

    2013      $ 711,923        —        $ 1,968,206      $ 1,729,168      $ 682,757        —        $ 27,258      $ 5,119,312   

Richard Simonson

    2014      $ 611,538        —        $ 974,996      $ 325,001      $ 418,293        —        $ 23,830      $ 2,353,658   

Executive Vice President and Chief Financial Officer

    2013      $ 484,615      $ 182,708      $ 2,991,000      $ 2,010,000      $ 337,292        —        $ 283,266      $ 6,288,881   

Rachel Gonzalez

    2014      $ 125,192      $ 50,000      $ 850,007      $ 849,999      $ 85,632        —        $ 1,156      $ 1,961,986   

Executive Vice President and General Counsel(6)

                 

Deborah Kerr

    2014      $ 526,923        —        $ 862,506      $ 287,501      $ 360,414        —        $ 11,582      $ 2,048,926   

Executive Vice President and Chief Product and Technology Officer

    2013      $ 403,846      $ 243,923      $ 1,994,000      $ 2,010,000      $ 281,077        —        $ 258,158      $ 5,191,004   

Gregory Webb

    2014      $ 490,769        —        $ 787,496      $ 262,501      $ 311,736      $ 1,500      $ 14,263      $ 1,868,265   

Executive Vice President and President, Travel Network

                 

Carl Sparks

    2014      $ 198,462      $ 1,500,000      $ 41,053 (8)      —          —          —        $ 737,039      $ 2,476,554   

Former Executive Vice President and President and CEO, Travelocity(7)

    2013      $ 600,000        —          —          —        $ 148,800        —        $ 28,884      $ 777,684   

 

(1) The amounts reported in the “Bonus” column for 2014 represent a sign-on bonus paid in 2014 to Ms. Gonzalez ($50,000) and a retention payment paid in 2014 to Mr. Sparks ($1,500,000).
(2) The amounts reported in the “Stock Awards” and “Option Awards” columns represent the aggregate grant date fair value of the stock-based awards granted to the Named Executive Officers during the periods presented, as computed in accordance with ASC Topic 718, disregarding the impact of estimated forfeitures. The grant date fair value of the stock options and restricted stock unit awards granted in 2014 is based on the grant date volume-weighted average price of the Corporation’s common stock as quoted by the NASDAQ Global Select Market exchange. The weighted-average assumptions used in calculating the grant date fair value of the 2014 stock options reported in the Option Awards column are the following: (i) exercise price of $16.82, (ii) risk-free interest rate of 1.96%, (iii) expected life in years of 6.11, (iv) implied volatility of 33.3% and (v) dividend yield of 2.15%. Note that the amounts reported in these columns reflect the accounting cost for these stock-based awards, and do not correspond to the actual economic value that may be received by the Named Executive Officers from these awards.
(3) The amounts reported in the “Non-Equity Incentive Plan Compensation” column represent the amounts paid to the Named Executive Officers for the years indicated pursuant to the EIP.
(4) For 2013, the aggregate value of Mr. Klein’s pension benefit decreased by $8,300. Because this amount decreased, it has been excluded from the table above under the SEC’s regulations. Messrs. Simonson and Sparks and Ms. Gonzalez and Ms. Kerr do not participate in the Legacy Pension Plan.


(5) The amounts reported in the “All Other Compensation” column are described in more detail in the following table. The amounts reported for perquisites and other benefits represent the actual cost incurred by the Corporation in providing these benefits to the indicated Named Executive Officer.

 

Name

   Year      Group
Term Life
Insurance
Premiums
     Country
Club
Membership
Dues(a)
     Executive
Physical
Examination
     Financial
Planning
Services
     Relocation     Section
401(k) Plan
Matching
Contribution
     Post-Employment
Compensation
Payments(b)
     Total  

Mr. Klein

     2014       $ 599         —           —         $ 7,915         —        $ 15,600         —         $ 24,114   
     2013       $ 713       $ 3,058       $ 3,277       $ 4,910         —        $ 15,300         —         $ 27,258   

Mr. Simonson

     2014       $ 404         —         $ 2,826       $ 5,000         —        $ 15,600         —         $ 23,830   
     2013       $ 579         —         $ 3,697       $ 5,000       $ 258,690 (c)    $ 15,300         —         $ 283,266   

Ms. Gonzalez

     2014       $ 83         —           —           —           —        $ 1,073         —         $ 1,156   

Ms. Kerr

     2014       $ 348         —         $ 3,434         —           —        $ 7,800         —         $ 11,582   
     2013       $ 508         —           —           —         $ 250,000 (d)    $ 7,650         —         $ 258,158   

Mr. Webb

     2014       $ 324         —         $ 3,539         —           —        $ 10,400         —         $ 14,263   

Mr. Sparks

     2014       $ 131         —           —         $ 5,000         —        $ 11,908       $ 720,000       $ 737,039   
     2013       $ 792         —         $ 2,792       $ 10,000         —        $ 15,300         —         $ 28,884   

 

(a) Historically, the Corporation paid the dues for a country club membership for certain executive officers, including Mr. Klein. In connection with his promotion to serve as President and CEO, Mr. Klein relinquished his membership in September 2013. The Corporation did not have any of these arrangements for any other executive officer during 2013 or 2014.
(b) The amounts reported in this column represent post-employment compensation payments and benefits provided to Mr. Sparks.
(c) In connection with his joining the Corporation as Executive Vice President and Chief Financial Officer, the Corporation paid a relocation company the reported amount for the costs associated with Mr. Simonson’s relocation to Dallas, Texas. In 2013, Mr. Simonson’s relocation benefit totaled $258,690, which includes a tax gross up by the Corporation of $62,015 for all applicable taxes relating to such benefit.
(d) In connection with her joining the Corporation as Executive Vice President and Chief Product and Technology Officer, and pursuant to the terms and conditions of her employment agreement, the Corporation paid Ms. Kerr the reported amount to reimburse her for the costs associated with her relocation to Dallas, Texas.

 

(6) Ms. Gonzalez joined the Corporation as Executive Vice President and General Counsel on September 22, 2014.
(7) Mr. Sparks stepped down from his position as Executive Vice President and President and CEO, Travelocity on April 28, 2014.
(8) Represents the incremental charge related to the acceleration of the vesting of Mr. Sparks’ restricted stock unit award from June 15, 2014 to April 28, 2014.

 

Item 8.01 Other Events

On February 4, 2015, the Corporation issued a press release announcing the pricing of the Offering at a price of $20.75 per share of common stock.

On February 10, 2015, the Corporation issued a press release announcing that the Offering in respect of an aggregate amount of 27,370,000 shares of common stock, including the shares delivered upon the exercise of the Underwriters’ option to purchase additional shares, has been completed. The shares are listed on the NASDAQ Global Select Market and trade under the symbol “SABR.”

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

  

Description

  1.1    Underwriting agreement by and between Sabre Corporation, the selling stockholders and the several underwriters party thereto.
99.1    Press release dated February 4, 2015.
99.2    Press release dated February 10, 2015.


SIGNATURES

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.

 

    Sabre Corporation
Dated: February 10, 2015     By:  

/s/ Richard A. Simonson

    Name:   Richard A. Simonson
    Title:   Executive Vice President and Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

  1.1    Underwriting agreement by and between Sabre Corporation, the selling stockholders and the several underwriters party thereto.
99.1    Press release dated February 4, 2015.
99.2    Press release dated February 10, 2015.