SEC Form 4 · accession 0001567619-19-000382
Pzena Investment Management, Inc. · PZN
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Gary J Bachman
Officer — Chief Operating Officer
Period of report
Jan 1, 2019
Accepted (ET)
Jan 3, 2019 · 5:48 pm EST
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001399249
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Class B common stock, par value $0.000001F1,F2,F4 | Jan 1, 2019 | A | 2,644 | — | A | 26,239 | I | Pzena Investment Management, LP |
| Class B common stock, par value $0.000001F1,F3,F4 | Jan 1, 2019 | F | 1,023 | $0.00 | D | 25,216 | I | Pzena Investment Management, LP |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Phantom Class B common stockF6,F5 | — | Dec 31, 2018 | A | 10,519 | A | — | — | Class B Units | 10,519 | 10,519 | D |
| Class B UnitsF7,F2,F4 | — | Jan 1, 2019 | A | 2,644 | A | — | — | Class A common stock, par value $0.01 | 2,644 | 26,239 | I |
| Class B UnitsF7,F3,F4,F2 | — | Jan 1, 2019 | F | 1,023 | D | — | — | Class A common stock, par value $0.01 | 1,023 | 25,216 | I |
| Class B Units OptionsF8,F9 | $5.97 | Jan 1, 2019 | A | 78,740 | A | Jan 1, 2024 | Jan 1, 2029 | Class B Units | 78,740 | 78,740 | D |
Explanation of responses
- F1Each holder of a Class B Unit of Pzena Investment Management, LLC (the "Operating Company") is also issued one share of Pzena Investment Management, Inc.'s (the "Issuer") Class B common stock, par value $0.000001 per share, in exchange for the par value thereof. Holders of Class B common stock are not entitled to participate in any dividends or other distributions made by the Issuer to holders of its capital stock, except for the right to receive the par value thereof upon the Issuer's liquidation or dissolution.
- F2On January 1, 2015, the Reporting Person was admitted as a member of the Operating Company and was granted 10,570 Class B Units which vest ratably over the first four anniversaries of the grant subject to the terms and conditions of the award agreement and the Amended Pzena LLC Agreement.
- F3This number includes 15,669 of Delayed Exchange Class B Units and 9,547 Class B Units.
- F4On January 1, 2016, pursuant to the Amended and Restated Agreement of Limited Partnership ("LPA") of Pzena Investment Management, LP ("PIM LP"), dated as of the same date, the Reporting Person became a limited partner of PIM LP and contributed to PIM LP his holdings of (i) Class B Units of the Operating Company and (ii) Class B common stock of the Issuer in order to receive a corresponding number of limited partnership interests in PIM LP. Pursuant to the LPA, whenever a Class B Unit is issued to the Reporting Person, the Reporting Person will be deemed to immediately and automatically contribute such Unit and related Class B common stock, to PIM LP and PIM LP will concurrently issue to him a corresponding limited partnership interest. Pursuant to the LPA, each limited partnership interest in PIM LP will be cancelled upon redemption by the Reporting Person for Class B Units and related Class B common stock subject to the terms of the LPA. The Issuer is the general partner of PIM LP.
- F5Issued in connection with the Reporting Person's mandatory deferral of his 2018 Restricted Amount pursuant to Section 5 of the Pzena Investment Management, LLC Amended and Restated Bonus, as amended (the "Bonus Plan").
- F6These Phantom Class B units vest, and become Delayed Exchange Class B Units of the Operating Company, in four equal annual installments and are subject to the terms and conditions set forth in the Bonus Plan. When these Delayed Exchange Class B units vest they will have the right to receive dividend payments, however, they are not eligible for exchange pursuant to the Exchange Rights of Class B Members (Exhibit B to the Amended Pzena LLC Agreement) until seven years after the applicable vesting date, at which time they will be 100% exchangeable for shares of the Issuer's Class A common stock (subject to the timing set forth in the Exchange Rights Agreement). These Class B units do not carry any rights associated with the Issuer and Operating Company's Tax Receivable Agreement.
- F7Represents units of the Operating Company that were reclassified as "Class B Units" of the Operating Company on a one-for-one basis in connection with the amendment and restatement of the Operating Company's operating agreement as of October 30, 2007 (as amended from time to time, the "Amended Pzena LLC Agreement"), among the Issuer, as the Managing Member of the Operating Company and the holder of certain units of the Operating Company, and the holders of such reclassified units of the Operating Company. Pursuant to the Amended Pzena LLC Agreement, each Class B Unit is exchangeable for a share of Class A common stock of the Issuer subject to the timing and volume limitations set forth in the Amended Pzena LLC Agreement.
- F8On Jan. 1, 2019, the Operating Company granted the Reporting Person the right to acquire, beginning on Jan. 1, 2024, Delayed Exchange Class B Units of the Operating Company for $5.97 per unit until Jan. 1, 2029, subject to earlier expiration upon the occurrence of certain events. Pursuant to the Amended and Restated Certificate of Incorporation of the Issuer when the Operating Company issues a Class B Unit to a new or existing member of the Operating Company, the Issuer will concurrently issue one share of its Class B Shares to the holder of such Class B Unit in exchange for the par value thereof.
- F9Delayed Exchange Class B units will be issued upon exercise of the option and will have the right to receive dividend payments, however, they are not eligible for exchange pursuant to the Exchange Rights of Class B Members until seven years after the grant date, at which time they will be 100% exchangeable for shares of the Issuer's Class A common stock (subject to the restructuring in the Exchange Rights Agreement). These Class B units do not carry any rights associated with the Issuer and Operating Company's Tax Receivable Agreement.