Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) On March 31, 2016, Richard P. Teets, Jr., the Executive Vice President for Steelmaking of Steel Dynamics, Inc., a co-founder of the Company and a member of the Board of Directors since its inception in 1993, retired.
In connection with Mr. Teets retirement, he will receive a payment of $250,000 to assist in the transition from April 2016 through July 2016, will continue to serve as a director through the 2016 Annual Meeting of Stockholders, and thereafter, if again elected by stockholders at the 2016 Annual Meeting, will continue to serve as a member of the Companys Board of Directors.
In addition, the Boards Compensation Committee approved the following post-retirement compensatory payments to or arrangements with Mr. Teets:
(1)
All previously earned but unvested awards held by Mr. Teets on March 31
st
pursuant to the Companys Long-Term Incentive Program (LTIP) will vest;
(2)
Mr. Teets will receive a one-time fully vested restricted stock grant equivalent to $1,000,000, or 43,803 shares, based upon the Companys March 30, 2016 close of business NASDAQ stock price of $22.83, subject, however, to a two year holding period; and
(3)
The remaining one-third of Mr. Teets previously earned but unvested 2014 stock bonus shares issued pursuant to the Companys 2013 Annual Incentive Bonus Plan, will immediately vest, subject, however, to a one-year holding period.
(e) On March 30, 2016, the Boards Compensation Committee (the Committee), acting pursuant to the provisions of Section 7.5 of the existing Steel Dynamics, Inc. 2015 Equity Incentive Plan (the Plan), previously approved in 2015 by stockholders, adopted the Steel Dynamics, Inc. Stock Appreciation Rights (SAR) Program.
The SAR Program empowers the Committee, from time to time, to award free-standing stock appreciation rights, with an exercise price of not less than 100% of the fair market value of one share of the Companys common stock on the applicable date of grant, with a maximum term of ten years, one-third of which will vest after twelve months from the date of grant, and 1/24
th
of the remaining balance thereof will vest monthly thereafter for each of the next twenty-four months, exercisable only in cash, for an amount equal to the appreciation value, if any, of the exercised SAR on the applicable exercise date.
The form of the Stock Appreciation Rights Award Agreement, to be utilized by the Committee in making SAR Awards under the SAR Program, is attached hereto as Exhibit 10.58, which, together with the provisions of Section 7.5 of the Plan (as amended on March 30, 2016 to permit a maximum award term of up to ten years), embodies the applicable terms and conditions to which an Award will be subject.
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