AEROVIRONMENT,INC. (NASDAQ:AVAV) 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.
Resignation of Chief Financial Officer
On December19, 2016, Raymond Cook, the Senior Vice President and
Chief Financial Officer of AeroVironment,Inc. (the Company),
notified the Company of his intent to resign from the Company for
personal health reasons effective February28, 2017 (the
Separation Date).
In connection with his resignation, Mr.Cook entered into a
Severance Agreement and General Release (the Severance Agreement)
with the Company. to the Severance Agreement, Mr.Cook released
the Company and certain of its related parties from all potential
claims and agreed to be subject to certain non-disparagement
obligations in consideration for a payment of $40,000, which
amount will be paid once the agreement becomes irrevocable.
Mr.Cook may revoke the Severance Agreement by providing written
notice to the Company within seven days after his execution of
the agreement on December19, 2016, in which case the agreement
will not go into effect. Additionally, if Mr.Cook re-executes the
Severance Agreement with 21 days after the Separation Date, he
will be entitled to receive (i)a lump-sum cash payment of
approximately $406,758.14, which represents an amount equal to
the sum of Mr.Cooks fiscal year 2017 base salary and 65% of his
pro-rata bonus for his service during fiscal year 2017, less
$40,000, and (ii)a lump sum payment equal to the after tax cost
of the sum of 12 months of COBRA premiums, 12 months of life
insurance premiums and $2,400 in lieu of long term disability
insurance premiums.
The foregoing description of the Severance Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the agreement. A copy of the
Severance Agreement is filed as Exhibit10.1 hereto and is
incorporated herein by reference.
Appointment of New Chief Financial Officer
The Company has appointed Teresa Covington, the Companys Vice
President of Finance to serve as the Companys Chief Financial
Officer and principal accounting and financial officer, effective
March1, 2017. Ms.Covington, 53, served as the Companys interim
Chief Financial Officer from February2015 to July2015 before
assuming her current role. Prior to serving as the Companys
interim Chief Financial Officer, Ms.Covington served as Vice
President of the Companys Efficient Energy Systems business
segment from May2011 to February2015. Prior to joining the
Company and from 2000 to 2011, Ms.Covington served as Senior Vice
President and Chief Financial Officer of Line 6,Inc., a $100
million annual revenue musical instruments manufacturer now part
of Yamaha. Ms.Covington earned her Masters in Business
Administration from Stanford University Graduate School of
Business, a Masters in Electrical Engineering from the University
of Southern California and a Bachelor of Science in Electrical
Engineering from the University of Illinois at Urbana-Champaign.
There are no arrangements or understandings between Ms.Covington
and any other persons to which she was selected to serve as
Companys Chief Financial Officer. There are also no family
relationships between Ms.Covington and any director or executive
officer of the Company and, other than the Severance Protection
Agreement described below, she has no direct or indirect material
interest in any transaction required to be disclosed to Item
404(a)of Regulation S-K.
Ms.Covington is a party to a Severance Protection Agreement with
the Company which provides for the payment of certain benefits to
her in connection with a change in control (as defined in the
agreement) and/or the termination of her employment. The term of
the Severance Protection Agreement commenced in December2015 and
continues until December31, 2018. If a change in control occurs
during the term of the agreement, the term will be extended to
the date that is 18 months after the date of the occurrence of
such change in control. The material terms of the Severance
Protection Agreement are summarized below:
a) Upon termination of Ms.Covingtons employment by the Company
without cause or by Ms.Covington for good reason (as those terms
are defined in the agreement) within 18 months following a change
in control, Ms.Covington is entitled to receive (i)her prorated
bonus target for the year in which the termination
occurs, (ii)a lump sum cash payment equal to 0.75x the sum of
her base salary at the rate in effect on the termination date
(or, if higher, the highest base salary rate in effect at any
time during the 180-day period prior to a change in control),
her annual target bonus for the year in which the termination
occurs and 50% of her target payout under all outstanding
long-term incentive plan awards, (iii)acceleration of vesting
and exercisability of equity awards, (iv)the continuation of
certain employee welfare plan benefits for the executive and
her dependents and beneficiaries for a period of 12 months and
(v)outplacement services for a period of 12 months, or if
earlier, until the first acceptance by Ms.Covington of an offer
of employment.
b) If Ms.Covingtons employment is terminated by the Company
without cause or by Ms.Covington for good reason, and a change
in control occurs prior to the earlier of the date which is
three (3)months following the termination date or February14th
of the calendar year following the year in which the
termination date occurs, she shall be entitled to receive the
benefits described in (a)above.
c) If Ms.Covingtons employment is terminated by the Company for
any reason other than cause in a context that does not involve
a change in control, or due to her death or disability, she
will receive: (i)her prorated bonus target for the year in
which the termination occurs, (ii)a lump sum payment in an
amount equal to 75% of her base salary at the rate in effect on
the termination date, and (iii)the continuation of certain
employee welfare plan benefits for the executive and her
dependents and beneficiaries for a period of 12 months.
To receive the severance benefits described above, Ms.Covington
must execute a full release of any and all claims against the
Company and comply with certain obligations specified in the
agreement for 12 months following the termination date,
including non-solicitation and non-disparagement obligations
and continued compliance with the obligations under her patent
and confidentiality agreement with the Company.
The foregoing description of the Severance Protection Agreement
does not purport to be complete and is qualified in its
entirety by reference to the full text of the agreement. A copy
of the Severance Protection Agreement is filed as Exhibit10.2
hereto and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On December20, 2016, the Company issued a press release
announcing Mr.Cooks resignation from the Company and
Ms.Covingtons appointment as the Companys Chief Financial
Officer. A copy of the Companys press release is furnished with
this Form8-K and attached hereto as Exhibit99.1. The
information in Exhibit99.1 shall not be deemed filed for
purposes of Section18 of the Securities Exchange Act of 1934,
as amended (the Exchange Act), or otherwise subject to the
liabilities of that section, nor shall it be deemed
incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, whether made
before or after the date hereof, except as shall be expressly
set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit |
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Number |
Description |
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10.1 |
Severance Agreement and General Release by and between |
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10.2 |
Severance Protection Agreement by and between |
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99.1 |
Press release issued by AeroVironment,Inc., dated |
About AEROVIRONMENT, INC. (NASDAQ:AVAV)
AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through two segments: Unmanned Aircraft Systems (UAS), which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects, and Efficient Energy Systems (EES), which focuses primarily on the design, development, production, marketing, support and operation of electric energy systems. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company also supplies charging systems and services for electric vehicles (EVs), and power cycling and test systems to commercial, consumer and government customers. AEROVIRONMENT, INC. (NASDAQ:AVAV) Recent Trading Information
AEROVIRONMENT, INC. (NASDAQ:AVAV) closed its last trading session down -0.01 at 27.95 with 180,128 shares trading hands.