UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM | ||
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): December 2, 2022
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Item 2.05. Costs Associated with Exit or Disposal Activities.
On December 6, 2022, Doma Holdings, Inc. (the “Company”) committed to implementing a strategic initiative and corresponding reduction in workforce (the "Reduction Plan"), designed to reduce costs, improve Local branch-level profitability, and focus resources on its instant underwriting capabilities.
The Reduction Plan is intended to generate estimated annualized compensation expense savings of between $85 million - $90 million and additional long-term facility related expense savings, beginning in the first quarter of 2023. The Reduction Plan includes the elimination of approximately 515 positions across the Company, or approximately 40% of the Company’s current workforce.
As part of the Reduction Plan, the Company expects to incur between approximately $9 million - $10 million in employment related charges, including cash expenditures for employee benefits, salary continuation, severance payments, payroll taxes and related costs offset by forfeitures of bonus and stock-based compensation. In the fourth quarter of 2022 and first quarter of 2023, the Company expects to incur restructuring charges related to decisions to exit or cease use of certain leased facilities to align with the Company’s anticipated operating needs. The Company cannot reasonably estimate these facility restructuring charges at this time. Similar to prior reductions in force, these charges will be outside of adjusted EBITDA.
The Company expects the execution of the Reduction Plan, including cash payments, will be substantially complete in the first quarter of 2023.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 2, 2022, the Company’s Chief Executive Officer, Maxwell Simkoff, voluntarily agreed to forego and cancel a previous award of 701,010 performance restricted stock units for the performance period beginning January 1, 2021 through December 31, 2023 granted to him under the Company’s Omnibus Incentive Plan on October 5, 2021, all of which are unvested.
Forward-Looking Statements Legend
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The absence of these words does not mean that a statement is not forward-looking. Such statements are based on the beliefs of, as well as assumptions made by information currently available to Doma management.
These forward-looking statements include, but are not limited to, statements regarding the estimated range and timing of the charges and cash outlays resulting from the Reduction Plan and the potential benefits described herein. These statements are based on various assumptions, whether or not identified in this Current Report, and on the current expectation of Doma’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict, will differ from assumptions and are beyond the control of Doma.
These forward-looking statements are subject to a number of risks and uncertainties, including changes in business, market, financial, political and legal conditions; risks relating to the uncertainty of the projected financial information with respect to Doma; future global, regional or local economic, political, market and social conditions, including duet the development, effects and enforcement of laws and regulations, including with respect to the title insurance industry; Doma’s ability to manage its future growth or to develop or acquire enhancements to its platform; the effects of competition on Doma’s future business; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and those other factors described in Part I, Item 1A - “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021 and any subsequent reports filed by Doma from time to time with the U.S. Securities and Exchange Commission (the “SEC”).
If any of these risks materialize or Doma’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Doma does not presently know or that Doma currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Doma’s expectations, plans or forecasts of future events and views as of the date of this Current Report. Doma anticipates that subsequent events and developments will cause Doma’s assessments to change. However, while Doma may elect to update these forward-looking statements at some point in the future, Doma specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be
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relied upon as representing Doma’s assessment as of any date subsequent to the date of this Current Report. Accordingly, undue reliance should not be placed upon the forward-looking statements.
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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.
Date: December 6, 2022
| By: | /s/ Eric Watson | |||||||
| Name: | Eric Watson | |||||||
| Title: | General Counsel & Secretary | |||||||
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