Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On January 7, 2020, A.M. Castle & Co. (the "Company") announced that Steven W.
Scheinkman retired as Chief Executive Officer of the Company and resigned his
position as Chairman of the Board, each effective as of January 1, 2020. The
Board of Directors (the "Board") has appointed Michael J. Sheehan, currently a
director, as Chairman of the Board and Marec E. Edgar, currently President of
the Company, as President and CEO and a director, effective upon Mr.
Scheinkman's retirement. Mr. Scheinkman will remain on the Board and from time
to time will serve as a senior advisor to management at the request of the CEO
or the Chairman.
Mr. Edgar, age 43, joined the Company in 2014 as Vice President and General
Counsel. He was promoted to Executive Vice President, General Counsel & Chief
Administrative Officer of the Company in 2015 and promoted to President of the
Company in 2018. Before joining the Company, he served in roles of increasing
responsibility at Gardner Denver, Inc., most recently as Assistant General
Counsel and Chief Compliance Officer.
There is no family relationship existing between Mr. Edgar and any executive
officer or director of the Company and he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
Retirement Agreement and Release - Steven W. Scheinkman
In connection with Mr. Scheinkman's retirement as Chief Executive Officer, the
Company and Mr. Scheinkman entered into a Retirement Agreement and Release (the
"Retirement Agreement"). The material terms of the Retirement Agreement are
summarized below.
Mr. Scheinkman will receive a continuation of his base salary through March 31,
2020, and will receive his 2019 Short-Term Incentive Plan ("STIP") compensation
at 27.7% percent of target (equal to $225,000.00), which will be paid in a lump
sum upon the earlier of the date the STIP payments are made to other executive
officers and March 31, 2020. Mr. Scheinkman's outstanding restricted stock and
note awards vested in full effective as of January 1, 2020. Mr. Scheinkman will
be available to serve as a senior consultant to management of the Company from
time to time, at the direction of the Chief Executive Officer or Chairman of the
Board. He will be paid a rate of $350 per hour for consulting services, except
as otherwise agreed in writing.
The foregoing description of the Retirement Agreement is qualified in its
entirety by reference to the full text of the Retirement Agreement, which is
filed as Exhibit 10.1, to this Current Report on Form 8-K and is incorporated by
reference herein.
Amended and Restated Employment Agreement - Marec E. Edgar
In connection with Mr. Edgar's appointment as Chief Executive Officer of the
Company, the Company and Mr. Edgar entered into an amended and restated
employment agreement (the "Employment Agreement"). The Employment Agreement has
an initial three (3) year term (the "Initial Term"), which will be automatically
renewed for additional one-year terms unless either party provides written
notice of non-renewal to the other no less than 365 days prior to the end of the
Initial Term or any renewal term. The material terms of the Employment Agreement
are summarized below.
Base Salary and Bonus. Mr. Edgar will receive an initial annual base salary of
$600,000 and will be eligible for an annual bonus under the Company's Short Term
Incentive Plan (the "STIP") with a target amount of 125% of base salary with a
maximum payment thereunder of 312.50% of base salary. Both base salary and bonus
are subject to annual review.
Other Incentive Compensation. Mr. Edgar will continue to be eligible to
participate in the Company's 2017 Management Incentive Plan ("MIP"), under which
officers and other key employees are eligible to receive awards denominated or
payable in shares of the Company's common stock and convertible notes
convertible into shares of the Company's common stock. Additional awards under
the MIP shall be determined by the Board of the Directors of the Company in its
sole discretion. Mr. Edgar is also eligible to participate in any other
long-term incentive compensation plans that have been approved or are approved
in the future by the shareholders of the Company and as administered by the
Board.
Severance Terms. In the event Mr. Edgar's employment with the Company terminates
for any reason, he will be entitled to certain unpaid and accrued payments and
benefits. However, if Mr. Edgar's employment is terminated by the Company for
"good cause" or if Mr. Edgar terminates his employment without "good reason",
then he will be entitled only to limited payments and benefits consisting
primarily of earned but unpaid salary and those benefits as required by
applicable law or the terms of the Company's benefit programs.
In the event of termination of Mr. Edgar's employment with the Company at the
end of the Initial Term or any renewal term, and if such termination is solely
due to non-renewal of the Employment Agreement by the Company, then Mr. Edgar
will receive (i) all salary earned but not yet paid through the date of
termination and (ii) (x) any prior-year STIP compensation earned but not yet
paid and the prorated portion of any current year STIP compensation, and (y) any
and all options, rights or awards granted to Mr. Edgar under the MIP prior to
the termination date, that will vest on a prorated basis to reflect the portion
of the applicable vesting period lapsed as of the date of termination. In the
event of termination of the Employment Agreement due to non-renewal of the
Employment Agreement by Mr. Edgar, then Mr. Edgar is entitled only to the salary
earned but not yet paid through the date of termination.
In the event of termination of Mr. Edgar's employment by the Company due to his
death or permanent disability, Mr. Edgar or his beneficiaries will be entitled
to (i) any compensation owed to Mr. Edgar through the date of his death or
determination of permanent disability (including salary), (ii) any prior-year
STIP compensation earned but not yet paid, plus the prorated portion of any
current year STIP compensation and (iii) pro-rata vesting of each of his then
outstanding and non-vested options, rights or awards under any of the Company's
incentive compensation plans. The Company will provide medical insurance and
other benefits to Mr. Edgar and his dependents, as applicable, for ninety (90)
days following his death or determination of permanent disability.
If Mr. Edgar's employment is terminated by Mr. Edgar without "good reason" upon
thirty (30) days' prior written notice to the Company, then Mr. Edgar is
entitled to payment of compensation and all other benefits through the date of
termination; provided, however, that if the Company waives the required notice
period and terminates his employment early, Mr. Edgar shall be entitled to
payment of compensation and all other benefits that he would have been entitled
to during such thirty-day notice period.
If Mr. Edgar's employment is terminated either involuntarily by the Company and
not due to "good cause" or by Mr. Edgar for "good reason", then, in addition to
payment of compensation and benefits earned through the date of termination, Mr.
Edgar will be entitled to (i) a cash severance amount, which shall be equal to
two times (2x) the sum of his base salary and the amount of his target STIP in
the year the termination occurs; (ii) the prorated portion of any current year
STIP; (iii) pro-rata vesting of each of his then outstanding and non-vested
options, rights or awards under any of the Company's incentive compensation
plans; (iv) a monthly cash reimbursement for a period of two (2) years following
termination for the portion of Mr. Edgar's cost of COBRA premiums that are in
excess of the active-employee cost of such coverage; and (v) the benefit of the
auto allowance, mobile telephone allowance and other perquisites for one (1)
year following termination.
The Employment Agreement provides for compensation due to termination of
employment following a change in control. A "change in control" will be
generally defined to include the acquisition of 40% or more of the Company's
voting power, specified changes in a majority of the Board, and the sale or
liquidation of the Company. If Mr. Edgar's employment is terminated in
connection with a change in control either involuntarily by the Company and not
due to "good cause" or by Mr. Edgar for "good reason", then, in addition to
payment of compensation and benefits earned through the date of termination, Mr.
Edgar will receive (i) two and one-half times (2.5x) the sum of his base salary
and the amount of his target STIP in the year the termination occurs; (ii) the
prorated portion of any current year STIP; (iii) pro-rata vesting of each of his
then outstanding and non-vested options, rights or awards under any of the
Company's incentive compensation plans; (iv) a monthly cash reimbursement for a
period of two and one-half (2.5) years following termination for the portion of
Mr. Edgar's cost of COBRA premiums that are in excess of the active-employee
cost of such coverage; and (v) the benefit of the auto allowance, mobile
telephone allowance and other perquisites for one (1) year following
termination. Mr. Edgar will be eligible to receive any remaining ungranted and
unallocated portion of the MIP the Board is required to award in the event of a
change in control, subject to the Board's sole discretion to determine the
. . .
Item 8.01 Other Events.
On January 7, 2020, the Company issued a press release announcing the
appointment of Michael J. Sheehan as Chairman of the Board and Marec E. Edgar as
President and Chief Executive Officer of the Company upon the retirement of
Steven W. Scheinkman as Chief Executive Officer and Chairman of the Board, as
described above. A copy of this press release is filed as Exhibit 99.1 to this
Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) The following exhibits are filed as part of this report:
Exhibit No. Description
10.1 Retirement Agreement and Release by and between A.M. Castle & Co.
and Steven W. Scheinkman
10.2 Amended and Restated Employment Agreement by and between A.M.
Castle & Co. and Marec E. Edgar
99.1 Press Release dated January 7, 2020
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