ALERIS CORPORATION (NYSE:ARS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02(e)
Grants of Stock Options and Restricted Stock Units
On November13, 2017, following the November12, 2017 termination of the Agreement and Plan of Merger between the Company and Zhongwang USA LLC (the “Merger Agreement”), the Board, acting as the Compensation Committee of the Board (the “Compensation Committee”) under the terms of the Company’s 2010 Equity Incentive Plan, as amended (the “Plan”) granted awards of stock options (“Options”) and restricted stock units (“RSUs”) to a group of key employees, including our named executives officers. In connection with these grants, the Board approved an amendment to the Plan to increase the number of RSUs that may be granted to the terms of the Plan to 1,325,627 (in the aggregate); the number of overall shares that may be subject to awards granted to the terms of the Plan remained the same.
Option and RSU awards granted to Messrs. Sean M. Stack, Eric M. Rychel, Christopher R. Clegg and Jack Govers, and Ms. Tamara S. Polmanteer consist of:
|
Name |
NumberofSharesinrespectofStock
Option Grant |
Number of RSUs |
|
Stack, Sean M |
463,650 | 231,825 |
|
Rychel, Eric M |
132,000 | 66,000 |
|
Clegg, Christopher R |
115,500 | 57,750 |
|
Govers, Jack |
132,000 | 66,000 |
|
Polmanteer, Tamara S. |
66,000 | 33,000 |
The Options were granted with an exercise price equal to the fair market value of a share of common stock on the date of grant, as determined for purposes of the Plan, and, in each case, the Options and RSU awards are subject vesting in three approximately equal installments on each of December31, 2017, 2018 and 2019 and such other terms and conditions set forth in an Option agreement and RSU agreement, as applicable. The form of Option agreement and form of RSU agreement is, in each case, substantially the same form as previously used by the Company for grants of Options and RSUs to executive officers, except, in the case of Options, the form of award was updated to provide that in the event the executive is terminated by the Company without Cause (as defined in the Plan) or by the executive for Good Reason (as defined in the Plan), in anticipation of or within 12 months following a Change in Control (as defined in the Plan), the executive will have until the earlier of (a)three years (up from one year in the prior form of Option agreement) and (b)the expiration date of the Option, to exercise any vested Options.
The foregoing descriptions of the terms applicable to the Option and RSU grants to Messrs. Stack, Rychel, Clegg and Govers and Ms.Polmanteer are qualified in their entirety by reference to the applicable form of Option agreement and RSU agreement. A copy of the updated form of Option agreement is attached hereto as Exhibit 10.1.
Employment Agreement Amendments
The Compensation Committee approved certain amendments to the employment agreements for Messrs. Stack, Rychel, Clegg and Govers, and Ms.Polmanteer (each an “Employment Agreement”) which became effective, and were contingent on, the effectiveness of the termination of the Merger Agreement. In the case of Mr.Stack the amendment updates his base salary to be $950,000 per anum and his annual target bonus percentage to be 125% of his base salary, with a maximum of 200% of base salary, and updates the cash portion of any severance awarded in the event of a termination by the Company without Cause (as defined in the Employment Agreement) or by the executive for Good Reason (as defined in the Employment Agreement) (collectively, an “Involuntary Termination”) to three times the sum of his annual base salary as of the date of termination and his annual target bonus amount. All other terms and conditions of Mr.Stack’s Employment Agreement remain unchanged and consistent with his agreement as previously disclosed.
In the case of each of Messrs. Rychel and Clegg, and Ms.Polmanteer, the amendment updates the executive’s annual base salary (to $525,000 for Mr.Rychel, to $450,000 for Mr.Clegg, and $400,000 for Ms.Polmanteer), updates the cash portion of any severance awarded in the event of an Involuntary Termination to one and one-half times the sum of the executive’s annual base salary and annual target bonus amount, and provides for a lump sum payment of severance (instead of in monthly installments), to the extent permissible under Section409A of the Internal Revenue Code, in the event of an Involuntary Termination in anticipation of or within 12 months following a Change in Control of the Company (as defined in the Plan). All other terms and conditions of the executive’s individual Employment Agreements remain unchanged and consistent with the form of agreement previously disclosed.
In the case of Mr.Govers, the amendment updates the annual target bonus percentage to be 75% of his base salary. All other terms and conditions of Mr.Govers’ Employment Agreement remain unchanged and consistent with the form of agreement previously disclosed.
The foregoing descriptions of the terms of the amendment to the Employment Agreements for Messrs. Stack, Rychel, Clegg and Govers, and Ms.Polmanteer are qualified in their entirety by reference to the applicable Form of Amendment to Amended and Restated Employment Agreement (for Mr.Stack), Form of Amendment to U.S. Executive Agreement (for Messrs. Rychel and Clegg and Ms.Polmanteer), and Form of Amendment 1 to the Employment Agreement (for Mr.Govers), each as attached hereto as Exhibits 10.2, 10.3 and 10.4, respectively.
Retention Bonus Agreements
The Compensation Committee approved certain retention bonuses for Messrs. Stack, Rychel, Clegg, and Govers and Ms.Polmanteer, which became effective, and were contingent on, the effectiveness of the termination of the Merger Agreement. The retention bonuses for Messrs. Stack, Rychel, Clegg, and Govers and Ms.Polmanteer equal $2,250,000, $800,000, $550,000, $500,000 and $300,000, respectively (the “Retention Bonuses”), and in each case are to a form of Retention Bonus agreement (the “Retention Bonus Agreement”) and are conditioned on continued employment through the applicable Vesting Date (as defined below). The Retention Bonus Agreement provides that theRetention Bonusshall be paid in cash (i)as to 50% in a lump sum as soon as practicable following the execution of the Retention Bonus Agreement by the executive (the “First Vesting Date”) and (ii)as to 50% in a lump sum as soon as practicable following December31, 2018 (“Second Vesting Date”, and each of the First Vesting Date and Second Vesting Date, a “Vesting Date”) but in no event later than January30, 2019, less applicable taxes. Payment of each installment of theRetention Bonusis subject to the executive’s continued employment through the First Vesting Date and Second Vesting Date, as applicable.
The Retention Bonus Agreement further provides that if, prior to a Vesting Date, the executive’s employment is terminated for any reason other than the Company terminating the executive without cause, the event of the executive’s death, or the executive terminating his or her employment for good reason, the executive shall forfeit all rights to receive any portion of theRetention Bonusthat he or she has not already received. In the event the executive’s employment is terminated prior following the First Vesting Date but prior to the Second Vesting Date by (i)the Company without cause, (ii)due to executive’s death or (iii)by the executive for good reason, the executive will receive that portion of theRetention Bonusnot previously paid to him or her in a lump sum in cash within thirty days following the executive’s termination of employment.
The foregoing descriptions of the terms applicable to the Retention Bonuses for Messrs. Stack, Rychel, Clegg and Govers and Ms.Polmanteer are qualified in their entirety by reference to the applicable Form of Retention Bonus Agreement, a copy of which will be filed as Exhibit 10.5 hereto.
Election of Executive Officer
On November13, 2017, Michael T. Keown, Senior Vice President and President of Aleris North America, was elected by the Board to serve as Executive Vice President and President of Aleris North America, effective as of the date of the election. Mr.Keown held his prior position since November15, 2015 and served as Vice President, Supply Chain for North America since 2014. Before these roles, Mr.Keown spent three years working for Aleris in Europe, where he served as Vice President and General Manager for the Company’s Extrusions business and earlier as Vice President of Supply Chain, Europe and Asia.
In connection with this election, the Company entered into an employment agreement with Mr.Keown, in a form substantially similar to the form of employment agreement provided to the Company’s other U.S.-based Executive Vice Presidents, with an annual base salary of $450,000 and a target percentage of the annual base salary that represents the annual target bonus Mr.Keown is eligible to receive under Aleris International Inc.’s annual bonus plan of 75%. In addition, as part of, and consistent with the terms of, the equity awards and retention bonuses granted by the Board as described above, Mr.Keown was awarded 132,000 Options and 66,000 RSUs and a Retention Bonus of $500,000.
| Item 5.02. | Exhibits and Financial Statements. |
(d) Exhibits.
Aleris Corp ExhibitEX-10.1 2 d498121dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 ALERIS CORPORATION 2010 EQUITY INCENTIVE PLAN FORM OF EXECUTIVE STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT (the Agreement) is made effective as of the date set forth on Exhibit A hereto (the Grant Date) between ALERIS CORPORATION,…To view the full exhibit click here