Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 9, 2020 (the "Effective Date"), AZZ Inc. (the "Company"), entered
into an employment agreement (the "Employment Agreement") with Mr. Kenneth
Lavelle. The Employment Agreement has a three year term, unless terminated
earlier in accordance with the terms of the Employment Agreement. In connection
with the Employment Agreement, Mr. Lavelle will receive a special one-time
equity award consisting of restricted stock units ("RSUs") that will cliff vest
in full on November 1, 2022.
In his position as the Company's President and General Manager - Electrical, Mr.
Lavelle is eligible to receive an annual cash incentive bonus under the
Company's Senior Management Bonus Plan (the "STI Plan"), which provides for an
annual cash incentive target based upon 55% of Mr. Lavelle's annual base salary
pursuant to the achievement of certain individual and Company performance
criteria. He will also be eligible each year for an annual equity award, the
amount and nature to be determined annually by the Company's Board of Directors
(the "Board") and/or the Board's Compensation Committee. For the Company's
fiscal year ending February 29, 2020, Mr. Lavelle's equity award target value
consisted of 50% performance share units ("PSUs") and 50% RSUs issued under the
Company's 2014 Long Term Incentive Plan (the "LTI Plan"). The Employment
Agreement also provides for severance payments, which may include base salary
and accrued paid time off through the date of termination, as well as a
pro-rated annual cash bonus, based upon the Company's actual performance and the
number of days of employment in the calendar year of termination, in the event
Mr. Lavelle's employment is terminated by the Company without Cause or by Mr.
Lavelle for Good Reason (each term as defined in the Employment Agreement). In
the event of a termination, the receipt of severance payments is conditioned
upon the execution of a general release in a form approved by the Company. Mr.
Lavelle is also subject to confidentiality and other restrictive covenants
prohibiting competition, solicitation of customers and employees and
interference with business relationships during his employment and for 12 months
thereafter.
Employment
Agreement FY2020 FY2020
FY2020 Execution Award STI Plan LTI Plan
Name Position Base Salary Award (RSUs) Vesting Date Target Target
President and GMKenneth Lavelle - Electrical $319,815 10,000 11/1/2022 $175,898 $250,000
Mr. Lavelle's Employment Agreement has Change in Control provisions that
provide, among other things, that upon the occurrence of a Change in Control,
Mr. Lavelle will receive certain payments from the Company if his employment is
terminated without Cause or by Mr. Lavelle for Good Reason (each such term as
defined in the Employment Agreement), in each case within 12 months of such a
Change in Control.
In addition, the Employment Agreement also provides that the Company will pay
the premiums for a term life insurance policy in the face amount of one times
Mr. Lavelle's annual base salary, subject to Mr. Lavelle passing a standard
physical examination in order to permit issuance of the policy at standard
(non-rated) premiums and satisfaction of any other standard underwriting
requirements. Mr. Lavelle will be the owner of such policy and shall have the
right to designate the beneficiary of the policy proceeds.
The foregoing summary descriptions of Mr. Lavelle's (i) Employment Agreement,
(ii) STI Plan, and (iii) LTI Plan do not purport to be complete and are
qualified in their entirety by reference to the terms of the Employment
Agreement, a copy of which is attached hereto as Exhibit 10.1, the terms of the
STI Plan described in detail in the Proxy Statement on Schedule 14A, which was
filed with the Securities and Exchange Commission by the Company on May 24, 2017
and incorporated herein by reference and the terms of the LTI Plan, a copy of
which is included as Annex A to the Proxy Statement on Schedule 14A filed by the
Company on May 29, 2014 and incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
The following exhibits are filed as part of this report.
Exhibit Description
10.1 Employment Agreement between AZZ Inc. and Mr. Lavelle, dated as of
January 9, 2020.
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AZZ INC. 
