ACTUANT CORPORATION (NYSE:ATU) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 12, 2019, Actuant Corporation (the “Company”) entered into a Retention Incentives Agreement (the “Agreement”) with Roger A. Roundhouse, the Company’s Executive Vice President, Engineered Components & Systems, in contemplation of a potential sale (a “Potential Sale”) of the Company’s Engineered Components & Systems segment (“EC&S”) to provide an incentive for Mr. Roundhouse to remain with the Company and work diligently to support the Company’s evaluation of strategic alternatives regarding EC&S.
The Agreement provides for certain payments by the Company to Mr. Roundhouse upon the achievement of specified milestones with respect to a Potential Sale, including the completion of a Potential Sale, prior to the expiration of the term of the Agreement, subject to Mr. Roundhouse continuing his employment with the Company through the date of the achievement of the relevant milestone (other than due to death, “Disability,” termination of employment by the Company without “Cause” or termination of employment by Mr. Roundhouse for “Good Reason,” as such terms are defined in the Agreement) (the “Continued Employment Condition”). The aggregate amount of such milestone payments under the Agreement is $465,000. Each milestone payment is subject to being increased, up to twice the amount thereof, upon the completion of a Potential Sale to the extent the cash amount received by the Company in the Potential Sale exceeds a specified threshold.
The Agreement also provides for additional payments and benefits to Mr. Roundhouse, all of which are subject to the Continued Employment Condition and the completion of a Potential Sale prior to the expiration of the Agreement. Mr. Roundhouse will receive twice his highest annual bonus paid in the prior three fiscal years. If the Potential Sale is completed after August 31, 2019, the bonus payment will be reduced by the amount of the annual bonus payable to Mr. Roundhouse for the fiscal year ending August 31, 2019. In addition, the Agreement provides that Mr. Roundhouse would be eligible for accelerated vesting of all unvested restricted stock units, performance stock units and stock options outstanding at the time of completion of a Potential Sale. Further, the Agreement provides that the Company will pay the reasonable fees and expenses of legal counsel engaged to represent transferring executives in connection with a Potential Sale to a buyer sponsored by a private equity or financial group.
The Agreement also provides for severance to be paid to Mr. Roundhouse if a Potential Sale is completed prior to the expiration of the term of the Agreement and either (i) his employment is involuntarily terminated (other than for “Cause”), or he terminates his employment for Good Reason, within 24 months after the Potential Sale, or (ii) Mr. Roundhouse’s employment is involuntarily terminated (other than for “Cause”) within six months prior to the Potential Sale. The severance to be paid in those circumstances is twice his current annual salary and the continuation of welfare benefits and perquisites in effect as of the completion date for a Potential Sale for up to two years.
The Agreement provides that its term is to expire upon the earlier of October 11, 2020 or the Company’s cancelling and choosing to abandon, or otherwise to not pursue, a Potential Sale. The Agreement amends and replaces the existing Change in Control Agreement entered into on August 7, 2017 between the Company and Mr. Roundhouse, although the Change in Control Agreement may be reinstated in full force and effect in certain conditions, including if a Potential Sale is not completed prior to October 11, 2020 or the Company cancels or abandons a Potential Sale.
The Agreement also contains comprehensive restrictive covenants from Mr. Roundhouse, including covenants not to compete, in the Company’s favor.
About ACTUANT CORPORATION (NYSE:ATU)
Actuant Corporation designs, manufactures and distributes a range of industrial products and systems to various end markets. The Company operates through three segments: Industrial, Energy and Engineered Solutions. The Company’s Industrial segment is primarily involved in the design, manufacture and distribution of branded hydraulic and mechanical tools to the maintenance, industrial, infrastructure and production automation markets. The Company’s Energy segment provides joint integrity products and services, customized offshore vessel mooring solutions, as well as rope and cable solutions to the global oil and gas, power generation and other energy markets. The Company’s Engineered Solutions segment provides engineered position and motion control systems to original equipment manufacturers (OEM) in various on and off-highway vehicle markets, as well as various other products to the industrial and agricultural markets.
An ad to help with our costs