Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
On January 4, 2017, the Company entered into an employment agreement with J. Scott Hall pursuant to
which Mr. Hall will serve as the Company’s President and Chief Executive Officer effective January 23, 2017 (the “Effective Date”). Mr. Hall will also become a member of the Company’s Board of Directors on January
25,2017.
Mr. Hall will succeed Gregory E. Hyland, the Company’s current President and Chief Executive Officer, who will become Executive
Chairman of the Company’s Board of Directors as of the Effective Date.
Mr. Hall joins the Company from Textron, Inc. (“Textron”)
where he most recently served as President and Chief Executive Officer of its Industrial Segment since 2009. Mr. Hall joined Textron in 2001 and has held numerous leadership positions since that time. Mr. Hall was a member of
Textron’s Executive Leadership Team and, from 2003 to 2009, served as President and Chief Executive Officer of Textron Tools and Test.
Mr. Hall’s employment agreement provides for a base salary of $750,000 per year, a 2017 targeted annual
incentive opportunity of 100% of base salary (with a potential payout range of
0%-200%
based on performance against goals), an initial long-term incentive opportunity valued at $1.5 million on the date of
grant consisting of (i) $750,000 of restricted stock units vesting annually over three years and (ii) $750,000 of performance share units vesting at the end of a three year performance period and certain other benefits. Mr. Hall’s base
salary is subject to review annually by the Company’s Board of Directors.
As an offset for forfeited performance and equity awards under
Textron’s incentive plans, the Company will issue Mr. Hall a number of restricted stock units to be determined as set forth in the employment agreement, which will vest on the one year anniversary of the commencement of
Mr. Hall’s employment. Mr. Hall will be eligible to participate in any pension, profit sharing, health or welfare benefit generally made available by the Company to other executive officers, as in effect from time to time.
The foregoing summary of the employment agreement is qualified in its entirety by the full text of the employment agreement, a copy of which is attached
hereto as Exhibit 10.2 and incorporated herein by reference.
Also on January 4, 2017, the Company entered into an Executive Change in Control
Agreement (the “Change in Control Agreement”) with Mr. Hall. Among other provisions, the Change in Control Agreement provides that if Mr. Hall’s employment is terminated other than for cause or for good reason (each as
defined in the Change in Control Agreement) within 24 months following a change in control of the Company (as defined in the Change in Control Agreement), Mr. Hall will be entitled to a
lump-sum
severance
payment equivalent to his base salary and annual incentive bonus (generally calculated as the average of actual annual incentive bonuses over the preceding three years) and continuation of certain benefits, such as group life and medical insurance
coverage for a period of 24 months. The Change in Control Agreement contains customary
non-competition
and
non-solicitation
provisions that prohibit Mr. Hall from
competing with the Company or soliciting its customers, suppliers or employees following termination.
The foregoing summary of the Change in Control
Agreement is qualified in its entirety by the full text of the Change in Control Agreement, a copy of which is attached hereto as Exhibit 10.3 and incorporated herein by reference.