Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 17, 2009, the board of directors (the "Board") of Ambassadors
International, Inc. (the "Company") held a meeting at which it (i) elected
Messrs. Eugene I. Davis, John Bianco and Stephen P. McCall to the Board,
(ii) accepted the resignations of Messrs. J. Hale Hoak and Rafer L. Johnson from
the Board and (iii) determined the size of the Board to be five (5) members. The
Board also elected Mr. Davis as Chairman of the Board. The resignations of
Mr. Hoak and Mr. Johnson did not relate to any disagreement with the Company.
The Board meeting was held pursuant to the terms of three separate,
previously disclosed Exchange Offer Commitment and Support Agreements (the
"Support Agreements") that the Company had entered into with each of
Whippoorwill Associates, Inc. (as agent for its discretionary accounts),
Highbridge Capital Management, LLC and Polygon Global Opportunities Master Fund,
in connection with the Company's recently completed exchange offer (the
"Exchange Offer") for its outstanding 3.75% Convertible Senior Notes due 2027
(the "Convertible Notes"). Under each Support Agreement, the Company agreed to
elect as a director one (1) individual designated by the counterparty to the
Support Agreement.
Mr. Davis, Mr. Bianco and Mr. McCall will serve as the Class II, Class III
and Class I directors of the Company, respectively.
The Board has determined that each of Mr. Davis, Mr. Bianco and Mr. McCall is
independent, as required under the rules of the NASDAQ Global Market and the
Securities and Exchange Commission. Except as stated herein, there are no
arrangements or understandings known to the Company between any of Mr. Davis,
Mr. Bianco or Mr. McCall and any other person pursuant to which any of them was
selected as a director.
The Board determined that the four independent directors of the Company,
namely, Mr. Davis, Mr. Bianco, Mr. McCall and Mr. Daniel J. Englander, would
serve as members of the Company's Audit Committee and Compensation and
Nominating Committee. The Board expects to review the composition and role of
its committees at subsequent Board meetings.
The Board also determined to make a one-time grant of restricted shares of
the Company's common stock under the Company's 2005 Incentive Award Plan, as
amended and restated (the "Plan"), to the four independent directors of the
Company. Mr. Davis, Mr. Bianco, Mr. McCall and Mr. Englander were granted
321,211, 53,535, 53,535 and 53,535 restricted shares, respectively. The
restricted shares granted to each director will vest in three equal installments
on the first, second and third anniversaries of the grant date, November 17,
2009, subject to the director's continued service as an independent director
with the Company and the terms of the Plan and the grant award agreement.
Notwithstanding the foregoing, all unvested restricted shares will vest upon a
change of control of the Company, as defined in the Plan. The Board will also
make an appropriate adjustment to the number of restricted shares granted under
these grants to adjust for the dilutive effect of any common stock issuance in
connection with any exchange of Convertible Notes for shares of the Company's
common stock or shares of the Company's common stock and the Company's 10%
Senior Secured Notes due 2012 ("New Notes"), including if there is any issuance
of common stock to holders of New Notes pursuant to the "most favored nation"
provision of the indenture for the New Notes which requires such an issuance if
the value of the consideration per $1,000 principal amount of Convertible Notes
in any such exchange is greater than the value per $1,000 principal amount of
Convertible Notes of the shares and New Notes received in the Exchange Offer
(measured at the time of any such exchange).
There are no related transactions between Mr. Davis, Mr. Bianco or Mr. McCall
and the Company that would be required to be reported pursuant to Item 404(a) of
Regulation S-K.
