Atkore International Group Inc. (NYSE:ATKR) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officer; Compensatory Arrangements of Certain Officers.
Adoption of Severance and Retention Policy for Senior Management
Effective as of July 10, 2017, the Board of Directors of Atkore International Group Inc. (the “Company”) adopted a Severance and Retention Policy for Senior Management (the “Policy”) for the benefit of the Company’s Chief Executive Officer (the “CEO”), the Company’s other executive officers subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Section 16 Officers”) and the officers of the Company who report directly to the CEO (the “CEO Direct Reports” and together with the CEO and the Section 16 Officers, the “Participants”), all of whom are eligible to participate in the Policy. If a Participant elects to be covered by the Policy, the Policy would supersede any other restrictive covenants and severance entitlements applicable to the Participant under any other severance or employment agreement.
Under the Policy, a Participant is entitled to receive severance payments and termination benefits upon a future termination of the Participant’s employment by the Company without “cause” or by the Participant with “good reason” (each, a “Qualifying Termination”). These payments and termination benefits include:
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a severance payment equal to the sum of (x) the Participant’s then-current base salary times a “severance multiple” (described below) plus (y) the average of Participant’s three most recent annual bonuses times the severance multiple; |
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a pro-rated annual bonus payment for the fiscal year in which the termination occurs, based on actual performance of Company metrics and target performance of individual metrics, and payable in a lump sum on the date of payment of annual bonuses generally; and |
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to the extent the Participant elects COBRA continuation coverage, the provision of such coverage at active-employee rates for a period equal to the lesser of 18 months or the number of months (of severance) to which Participant would be entitled after applying the severance multiple. |
The severance multiples under the Policy are as follows:
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Participant |
If the Qualifying Termination occurs prior to a change in control: |
If the Qualifying Termination occurs within 24 months following a change in control: |
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CEO |
2.0 |
2.5 |
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Section 16 Officers |
1.0 |
1.5 |
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Other CEO Direct Reports |
0.75 |
1.5 |
The severance payment will be paid in a number of monthly installments equal to the number of months that comprise the severance multiple (e.g., if the severance multiple is 1, the number of monthly installments would be 12), except that, if the termination occurs after a change in control, the severance payment will be paid in a lump sum to the maximum extent practicable under applicable law. If any payments to a Participant under the Policy trigger golden parachute excise taxes under Section 4999 of the Internal Revenue Code, the payments would be reduced if the reduction is better for the Participant on an after-tax basis.
The Policy includes customary restrictive covenants that apply for a period based on the applicable severance multiple (and so determined whether or not the termination is a Qualifying Termination). In order to receive the severance payments and termination benefits under the Policy, the Participant must execute a release of claims and comply with the applicable restrictive covenants.
The Policy may be amended or terminated by the Company’s Board of Directors, except that any amendment or termination that has a materially adverse impact on a Participant would not be effective for one year, and no amendment or termination that has a materially adverse impact on a Participant may occur within 24 months following a change in control of the Company.
The foregoing description of the Policy is not complete and is qualified in its entirety by the full text of the Policy, a copy of which will be filed as an exhibit to the Company’s next following Quarterly Report on Form 10-Q.
About Atkore International Group Inc. (NYSE:ATKR)
Atkore International Group Inc. is a manufacturer of electrical raceway products. The Company’s products are primarily offered for non-residential construction and renovation markets, and mechanical products and solutions (MP&S) for the construction and industrial markets. The Company operates in two segments: Electrical Raceway and MP&S. Through the electrical raceway segment, it manufactures products that deploy, isolate and protect a structure’s electrical circuitry from the original power source to the final outlet. The Company’s electrical raceway segment products include electrical conduit, armored cable, cable trays, mounting systems and fittings. Through the MP&S segment, it provides products and services that frame, support and secure component parts in a range of structures, equipment and systems in electrical, industrial and construction applications. The Company’s MP&S segment products include metal framing products and in-line galvanized mechanical tube.
