SEC Form 4 · accession 0001104659-18-048178
Focus Financial Partners Inc. · FOCS
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Rajini Sundar Kodialam
Officer — COO · Director
Period of report
Jul 30, 2018
Accepted (ET)
Jul 30, 2018 · 7:41 pm EDT
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001651052
Table I — non-derivative securities
No Table I lines on this filing.
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Incentive Units in Focus Financial Partners, LLCF1,F2 | $9.00 | Jul 30, 2018 | A | 345,348 | A | — | — | Class A Common Stock | — | 345,348 | D |
| Incentive Units in Focus Financial Partners, LLCF1,F2 | $16.00 | Jul 30, 2018 | A | 9,401 | A | — | — | Class A Common Stock | — | 9,401 | D |
| Incentive Units in Focus Financial Partners, LLCF1,F4,F5,F3 | $21.00 | Jul 30, 2018 | A | 100,000 | A | — | — | Class A Common Stock | — | 100,000 | D |
| Incentive Units in Focus Financial Partners, LLCF1,F6,F3 | $23.00 | Jul 30, 2018 | A | 93,544 | A | — | — | Class A Common Stock | — | 93,544 | D |
| Incentive Units in Focus Financial Partners, LLCF1,F7,F8,F3 | $33.00 | Jul 30, 2018 | A | 487,500 | A | — | — | Class A Common Stock | — | 487,500 | D |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F2 | $11.00 | Jul 30, 2018 | A | 340,000 | A | — | — | Class A Common Stock | — | 340,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F2 | $13.00 | Jul 30, 2018 | A | 295,000 | A | — | — | Class A Common Stock | — | 295,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F2 | $19.00 | Jul 30, 2018 | A | 130,000 | A | — | — | Class A Common Stock | — | 130,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F2 | $21.00 | Jul 30, 2018 | A | 130,000 | A | — | — | Class A Common Stock | — | 130,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F4,F5,F3 | $21.00 | Jul 30, 2018 | A | 450,000 | A | — | — | Class A Common Stock | — | 450,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F6,F3 | $23.00 | Jul 30, 2018 | A | 125,000 | A | — | — | Class A Common Stock | — | 125,000 | I |
| Incentive Units in Focus Financial Partners, LLCF9,F1,F7,F8,F3 | $33.00 | Jul 30, 2018 | A | 162,500 | A | — | — | Class A Common Stock | — | 162,500 | I |
Explanation of responses
- F1Each incentive unit in Focus Financial Partners, LLC ("Focus LLC") entitles the holder to receive distributions from Focus LLC if the aggregate distributions made by Focus LLC in respect of each common unit in Focus LLC issued and outstanding on or prior to date of the grant of the incentive unit exceeds a specified amount, referred to as the hurdle amount. The hurdle amount is set at the time of grant and typically represents the estimated fair value of a common unit on the date of grant. The figure reflected in column 2 is the hurdle amount assigned to each incentive award. Incentive units do not expire.
- F2In connection with the Issuer's initial public offering, on July 30, 2018, the Issuer entered into the Fourth Amended and Restated Operating Agreement of Focus LLC (the "Fourth Amended and Restated Focus LLC Agreement"), pursuant to which vested incentive units became exchangeable, subject to certain restrictions in the Fourth Amended and Restated Focus LLC Agreement, for (i) a number of shares of the Issuer's Class A common stock that takes into account the then-current value of the Issuer's Class A common stock and such incentive units' aggregate hurdle amount or, (ii) at the election of the Issuer, cash. The acquisition of the derivative securities resulting from the execution of the Fourth Amended and Restated Focus LLC Agreement was exempt from Section 16 of the Securities Exchange Act of 1934, as amended.
- F3Upon the execution of the Fourth Amended and Restated Focus LLC Agreement, unvested incentive units will, at vesting, become exchangeable, subject to certain restrictions in the Fourth Amended and Restated Focus LLC Agreement, for (i) a number of shares of the Issuer's Class A common stock that takes into account the then-current value of the Issuer's Class A common stock and such incentive units' aggregate hurdle amount or, (ii) at the election of the Issuer, cash. The acquisition of the derivative securities resulting from the execution of the Fourth Amended and Restated Focus LLC Agreement was exempt from Section 16 of the Securities Exchange Act of 1934, as amended.
- F4These incentive units (the "Retention Incentive Units), potentially vest in two tranches. Fifty percent of the Retention Incentive Units will vest if the weighted average price per share of the Issuer's Class A common stock is at least $35.00 for the first ninety days following pricing of the Issuer's initial public offering. Retention Incentive Units that remain unvested will be eligible to vest on the third anniversary of the Issuer's initial public offering if the weighted average price per share of the Issuer's Class A common stock for the ninety day period immediately preceding the third anniversary of the Issuer's initial public offering is:
- F5(i) less than $42.00, then no remaining unvested Retention Incentive Units will vest; (ii) greater than $63.00, then all remaining unvested Retention Incentive Units will vest; and (iii) if between $42.00 and $63.00, then (x) fifty percent (50%) of the remaining unvested Retention Incentive Units will vest and (y) the remaining fifty percent (50%) of the remaining unvested Retention Incentive Units will vest linearly based on where the price falls within the range of $42.00 and $63.00. If a change in control transaction occurs prior the third anniversary of the Issuer's initial public offering, any unvested Retention Units, subject to any superior provision in any employment agreement, will vest based on the price of the Issuer's Class A common stock used in the change in control transaction, applying the same vesting benchmarks as are applied on the third anniversary of the Issuer's initial public offering.
- F6These incentive units will vest in four equal installments on each anniversary of November 22, 2017.
- F7These incentive units will vest on the fifth anniversary of the pricing of the Issuer's initial public offering provided that the volume weighted average price per share of the Issuer's Class A common stock for any ninety calendar day period within such five year period reaches at least $100.00.
- F8In the event a change in control transaction occurs prior to the end of such five year period, the incentive units, subject to any superior provision in any employment agreement, will vest linearly based on where the price of the Issuer's Class A common stock used in the transaction falls between the stock price in connection with the Issuer's initial public offering and $100.00, with 100% vesting if the price of the Issuer's Class A common stock used in the transaction is at least $100.00, 0% vesting if the price of the Issuer's Class A common stock used in the transaction is equal to or less than the price of the Issuer's Class A common stock in the Issuer's initial public offering, and linear interpolation in between.
- F9Represents incentive units held by the Kodialam 2014 Family Trust, an irrevocable grantor trust established by the reporting person for the benefit of her children. The reporting person disclaims beneficial ownership of the securities owned by the trust except to the extent of her indirect pecuniary interest therein.