0000742112FALSE00007421122022-11-162022-11-16
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 16, 2022
INVACARE CORPORATION
(Exact name of Registrant as specified in its charter)
| | | | | | | | |
| Ohio | 001-15103 | 95-2680965 |
(State or other Jurisdiction of
Incorporation or Organization) | (Commission
File Number) | (I.R.S. Employer
Identification Number) |
One Invacare Way, Elyria, Ohio 44035
(Address of principal executive offices, including zip code)
(440) 329-6000
(Registrant’s telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Exchange Act:
| | | | | | | | |
| Title of each class | Trading Symbol | Name of exchange on which registered |
| Common Shares, without par value | IVC | New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On November 21, 2022, Invacare Corporation (the "Company") entered into an Amendment No. 1 to Cooperation Agreement (the "Amendment") with Azurite Management LLC, Steven H. Rosen, Crawford United Corporation, Edward F. Crawford and Matthew V. Crawford (collectively, "Azurite"), which amended the Cooperation Agreement entered into by the Company and Azurite on August 22, 2022 (the "Original Agreement").
The Original Agreement provided that certain obligations of the Company with respect to the directors of the Company designated by Azurite would terminate if Azurite and its affiliates do not own at least 3,946,558 Common Shares of the Company. The Amendment reduced the amount of that share ownership threshold to 3,600,000 Common Shares of the Company.
The Original Agreement also provided that Azurite is subject to certain standstill provisions, including one provision that prohibited Azurite from offering to acquire, agreeing to acquire or acquiring rights to acquire, directly or indirectly, any voting securities of the Company which would result in the ownership or control of, or other beneficial ownership interest, in excess of 19.9% of the then-outstanding Common Shares. The Amendment reduced the percentage of that beneficial ownership interest threshold to 9.995% of the then-outstanding Common Shares.
The foregoing description of terms and conditions of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and the Original Agreement, a copy of which is attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 22, 2022, and each of which is incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
CEO Appointment
Effective November 17, 2022, the Company appointed Geoffrey P. Purtill, age 57, as President and Chief Executive Officer. Mr. Purtill had been serving as the Company’s interim President and Chief Executive Officer since August 28, 2022. Prior to this appointment, Mr. Purtill served as Senior Vice President and General Manager, Europe, Middle East & Africa and Asia Pacific since December 2021 and Vice President, Global Strategy and General Manager, Asia Pacific, since September 2021. Previously, he served for 11 years as the Company's Vice President and General Manager, Asia Pacific. Prior to joining the Company, Mr. Purtill held various sales, category management and supply chain leadership roles at Johnson & Johnson and Nestle. Mr. Purtill spent 14 years in the Australian Army where he was a Captain in the Intelligence Corps.
In connection with his appointment as President and Chief Executive Officer, on November 21, 2022, Mr. Purtill and the Company entered into a letter agreement (the "Letter Agreement"). Pursuant to the Letter Agreement, effective November 17, 2022, Mr. Purtill's annual base salary was increased to $550,000 per year, and his annual target bonus opportunity under the Company’s Executive Incentive Bonus Plan was increased to 100% of his annual base salary.
The foregoing description of the terms and conditions of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement, a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Director Resignation
On November 16, 2022, Susan H. Alexander informed the Board of Directors of the Company of
her decision to resign as a director of the Company, effective immediately. Ms. Alexander’s decision to resign is due to her other personal and professional obligations and not due to any disagreement with the Company.
Item 7.01. Regulation FD Disclosure.
On November 21, 2022, the Company issued a press release announcing Mr. Purtill's appointment as the Company's President and Chief Executive Officer. A copy of the press release is furnished as Exhibit 99.1 attached hereto.
Item 9.01. Financial Statements and Exhibits.
| | | | | |
| (d) Exhibits. | |
| |
| Exhibit Number | Description of Exhibit |
| |
| Amendment No.1 to Cooperation Agreement, dated November 21, 2022, by and between the Company and Azurite. |
| Letter Agreement, dated November 21, 2022, by and between the Company and Geoffrey P. Purtill. |
| Press Release, dated November 21, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | |
| INVACARE CORPORATION |
| (Registrant) |
| | |
| Date: November 21, 2022 | By: | /s/ Anthony C. LaPlaca |
| Name: | Anthony C. LaPlaca |
| Title: | Senior Vice President, General Counsel, |
| | Chief Administrative Officer and Secretary |
Exhibit Index
| | | | | |
| Exhibit Number | Description of Exhibit |
| |
| Amendment No.1 to Cooperation Agreement, dated November 21, 2022, by and between the Company and Azurite. |
| Letter Agreement, dated November 21, 2022, by and between the Company and Geoffrey P. Purtill. |
| Press Release, dated November 21, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| |
AMENDMENT NO. 1 TO COOPERATION AGREEMENT
This Amendment No. 1 to the Cooperation Agreement (this “Amendment”), dated as of November 21, 2022, is by and among Azurite Management LLC, an Ohio limited liability company (together with the members of its investment “group” for purposes of Schedule 13D filed with the SEC executing this Agreement on the signature pages hereto, “Azurite”), and Invacare Corporation, an Ohio corporation (the “Company”), with respect to the matters set forth below. Each of the Company and Azurite is referred to as a “Party” and jointly are referred to as the “Parties”. For the purposes of this Amendment, (i) terms used with initial capital letters and not otherwise defined herein will have the meanings assigned to them in the Cooperation Agreement, and (ii) references to sections in this Amendment refer to such sections of the Cooperation Agreement.
WHEREAS, the Parties are party to that certain Cooperation Agreement, dated August 22, 2022 (the “Cooperation Agreement”).
WHEREAS, the Parties desire to amend the Cooperation Agreement pursuant to and in accordance with Section 15 of the Cooperation Agreement, as set forth herein.
NOW, THEREFORE, in consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Azurite and the Company agree as follows:
1.Amendment. The Cooperation Agreement is hereby amended as follows:
a.Section 1(j)(ii) is hereby amended by replacing the text “3,946,558” therein, in all instances in which such text appears, with the following text: “3,600,000”.
b.Section 2(c)(i) is hereby amended by replacing the text “19.9%” therein with the following text: “9.99%”.
2.Binding Effect. Except to the extent expressly provided herein, the Cooperation Agreement will remain in full force and effect in accordance with its terms.
3.Miscellaneous. Sections 12 through 16 of the Cooperation Agreement are incorporated herein by reference on a mutatis mutandis basis and, to the extent applicable, will govern the terms of this Amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.
Azurite
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| AZURITE MANAGEMENT LLC |
| By: | /s/ Steven H. Rosen |
| | Name: Steven H. Rosen |
| | Title: Manager |
| | |
| STEVEN H. ROSEN |
| By: | /s/ Steven H. Rosen |
| | |
| CRAWFORD UNITED CORPORATION |
| By: | /s/ Brian E. Powers |
| | Name: Brian E. Powers |
| | Title: President and Chief Executive Officer |
| | |
| EDWARD F. CRAWFORD |
| By: | /s/ Brian E. Powers |
| | Name: Brian E. Powers |
| | Title: Attorney-in-fact |
| | |
| MATTHEW V. CRAWFORD |
| By: | /s/ Brian E. Powers |
| | Name: Brian E. Powers |
| | Title: Attorney-in-fact |
Invacare
| | | | | | | | |
| INVACARE CORPORATION |
| By: | /s/ Geoffrey Porter Purtill |
| | Name: Geoffrey Porter Purtill |
| | Title: President and Chief Executive Officer |
PERSONAL AND CONFIDENTIAL
November 21, 2022
Mr. Geoffrey P. Purtill
Neumattstrasse 10
Reinach BL
4153 Switzerland
Dear Geoff:
On behalf of the Board of Directors (the “Board”) of Invacare Corporation (“Invacare” or “Company”), I am pleased to confirm your appointment by the Board to the position of President and Chief Executive Officer (“CEO”), reporting directly to the Board. The effective date of this appointment is November 17, 2022 (the “Effective Date”).
The following represents the general terms and conditions of your appointment as CEO and modifies and amends the terms of your Existing Employment Agreement (as defined below) only as and to the extent expressly set forth herein:
COMPENSATION
Salary – Your base salary rate for the position of CEO will be USD $550,000 on an annualized basis, beginning as of November 17, 2022. This annualized rate is established for convenience purposes only and is not intended to be construed as a contract or promise of employment for any fixed period of time. Your salary will be payable in the equivalent amount of Swiss Francs (CHF; gross; less statutory and contractual deductions and, where applicable, tax at source) in accordance with the Amended and Restated Employment Agreement between you and Invacare International GmbH dated as of January 31, 2022, as amended by letter agreement dated September 13, 2022 (“Existing Employment Agreement”).
Annual Bonus – You will continue to participate in the Executive Incentive Bonus Plan (the “Plan”), and your target bonus opportunity will be 100% of your base annual salary. Your total annual target bonus opportunity will be determined pro rata based on the respective times of service, base annual salary rates and target bonus opportunity percentages for the portions of the applicable Plan year during which you served in the role of Interim CEO and in the role of Senior Vice President/GM of EMEA & APAC or other position. Payment of any bonus will be subject to achievement of the Annual Bonus targets established by, and the determination and certification of, the Compensation and Management Development
INVACARE CORPORATION
One Invacare Way, Elyria, Ohio 44035 USA
440-329-6000 www.invacare.com
Geoffrey P. Purtill
November 21, 2022
Page 2 of 3
Committee (the “Compensation Committee”). Any bonus earned under the terms of the Plan for 2022 will be prorated as described above and be payable in 2023 at the time any similar 2022 Plan year payments are made to other executives and be subject to the applicable Plan rules.
OTHER MATTERS
Work Arrangements – As CEO, you will be provided an office in the Elyria, Ohio, global headquarters of Invacare. You will also maintain your office and principal place of work at the EMEA HQ office in Switzerland. You will maintain your residence in Switzerland and be expected to travel between Europe and the United States from time to time, as warranted to discharge the duties of your role as the CEO. Travel must adhere to Invacare’s Travel Policy Guidelines, except that you will be permitted to Business Class for international air travel.
Employment Agreement. You will remain on the payroll of Invacare International GmbH and receive the employee benefits as described in the Existing Employment Agreement, except to the extent expressly modified and amended by the terms of this letter agreement. Accordingly, the Existing Employment Agreement shall remain in full force and effect, except as amended by the terms of this letter agreement.
Severance Benefit / Notice Period. In the event the Company terminates your employment for any reason other than “for cause” as defined in the Existing Employment Agreement, any notice pay, severance pay or other termination benefits to which you may be entitled as a result of such termination will be calculated based upon your then base salary.
The Board will discuss with you at a later time any additional potential elements and / or benefits of your appointment, such as potential relocation and long-term incentive opportunities, and, if agreed upon, the Existing Employment Agreement may be further amended or modified, if required, to address any such additional elements. As we discussed, the Compensation Committee will consider bonus metrics for you, as well as consider whether bonus might be paid quarterly.
Geoffrey P. Purtill
November 21, 2022
Page 3 of 3
Geoff, we are excited about having you step up to serve as CEO of Invacare! Please sign and date a copy of this letter to indicate your understanding and agreement to these terms and return it to me. If there are any questions regarding this letter agreement, please contact me.
Sincerely,
/s/ Michael J. Merriman, Jr.
Michael J. Merriman, Jr.
Chairman of the Board
cc: Marc Gibeley
Chair of Compensation & Management Development Committee
To acknowledge acceptance of, and agreement with, the terms and conditions for the position of President and Chief Executive Officer, please sign below and return a copy of this letter agreement to Invacare.
__/s/ Geoffrey P. Purtill___________________ __November 21, 2022___________
GEOFFREY P. PURTILL Date
| | | | | | | | | | | |
| | Exhibit 99.1 |
| INVESTOR CONTACT: | Lois Lee |
| | loislee@invacare.com |
| | 440-329-6435 |
Invacare Appoints Geoff Purtill President and Chief Executive Officer
ELYRIA, Ohio (November 21, 2022) - Invacare Corporation (NYSE: IVC) announced today that its Board of Directors has named Geoffrey P. Purtill as President and Chief Executive Officer, roles that he has served on an interim basis since August 28, 2022.
Non-executive Chairman of the Board of Directors Michael J. Merriman, Jr, said, “On behalf of the Board, we are excited to elevate Geoff Purtill into the role of President and CEO. The Board determined that Geoff is the right steward of the company as it undergoes significant transformation and embarks on a new chapter. Geoff has proven adept at guiding our global businesses through change, both in his previous role overseeing the EMEA and APAC businesses, and now in his current role. Notably, Geoff and the leadership team have already acted decisively by discontinuing respiratory products and repositioning the business and resources around our core categories of Lifestyle and Mobility & Seating, which are anticipated to drive profitable growth. The Board looks forward to partnering with Geoff as we continue to take decisive action to improve our financial performance and enhance shareholder value.”
Mr. Purtill added, “I am honored that our Board has given me the opportunity to lead Invacare and advance our mission of Making Life’s Experiences Possible® for the millions of people who rely on our products each day. I look forward to working closely with all of our customers globally to regain their trust and confidence, especially in North America. As always, I am grateful for all the hard work our associates have put in during these extraordinary times. While we have had our share of challenges, I see great potential in the company and continue to drive and accelerate our transformation plans to strengthen Invacare for the long-term. I look forward to working with our Board who continue to provide guidance as we advance through our transformation.”
About Geoffrey P. Purtill
Mr. Purtill served as interim President and Chief Executive Officer since August 2022. Previously, he served as the Senior Vice President and General Manager, EMEA and APAC since December 2021 and Vice President, Global Strategy and General Manager, Asia Pacific, since September 2021. Previously, he served for 11 years as the company's Vice President and General Manager, Asia Pacific region. Prior to joining Invacare, he held various sales, category management and supply chain leadership roles at Johnson & Johnson and Nestle. Mr. Purtill spent 14 years in the Australian Army where he was a Captain in the Intelligence Corps.
About Invacare Corporation
Invacare Corporation is a leading manufacturer and distributor in its markets for medical equipment used in non-acute care settings. At its core, the company designs, manufactures and distributes medical devices that help people to move, rest and perform essential hygiene. The company provides clinically complex medical device solutions for congenital (e.g., cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g., stroke, spinal cord injury, traumatic brain injury, post-acute recovery, pressure ulcers) and degenerative (e.g., ALS, multiple sclerosis, elderly, bariatric) ailments. The company's products are important parts of care for people with a wide range of challenges, from those who are active and involved in work or school each day and may need additional mobility support, to those who are cared for
in residential care settings, at home and in rehabilitation centers. The company sells its products principally to home medical equipment providers with retail and e-commerce channels, residential care operators, distributors and government health services in North America, Europe and Asia/Pacific. For more information about the company and its products, visit Invacare's website at www.invacare.com.
This press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that describe future outcomes or expectations that are usually identified by words such as “will,” "may," “should,” “could,” “plan,” “intend,” “expect,” “continue,” “forecast,” “believe,” and “anticipate” as well as similar comments, denote forward-looking statement that are subject to inherent uncertainties that are difficult to predict. These include, for example, statements related to the company’s ability to drive profitable growth, improve financial performance, enhance shareholder value and drive and accelerate its transformation plans and similar statements. Actual results and events may differ significantly from those expressed or anticipated as a result of various risks and uncertainties, including possible adverse effects on the company's liquidity, including the company's ability to address future debt maturities or other obligations, including additional debt that may be incurred in the future; possible adverse effects of being leveraged, including interest rate or event of default risks; any failure to satisfy the continued listing standards of the NYSE and delisting of the company's common shares from the NYSE; the effects of steps the company has taken or will take to reduce operating costs; the ability of the company to achieve profitable sales growth, improve segment operating performance, convert high inventory levels to cash and reduce its costs; the ability of the company to successfully improve output and convert open orders into sales; the availability and cost to the company of needed products, components or raw materials from the company's suppliers, including delivery delays and production interruptions from pandemic-related supply chain challenges and supplier delivery holds resulting from past due payables; the duration and scope of the COVID-19 pandemic, the pace of resumption of access to healthcare, including clinics and elective care, and loosening of public health restrictions, or any reimposed restrictions on access to healthcare or tightening of public health restrictions, which could impact the demand for the company’s products; global shortages in, or increasing costs for, transportation and logistics services and capacity; actions that governments, businesses and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions; the impact of the pandemic or political or geopolitical crises, such as the Russian war with Ukraine, and actions taken in response, on global and regional economies and economic activity; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth, including negative conditions attributable to inflationary economic conditions and rising interest rates; the ability of the company to successfully focus on lifestyle and mobility & seating products; lack of market acceptance of the company's new product innovations; potential adverse effects of revised product pricing and/or product surcharges on revenues or the demand for the company's products; circumstances or developments that may make the company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives, in particular the key elements of its growth plans, such as its new product introductions, commercialization plans, additional investments in demonstration equipment, product distribution strategy in Europe, supply chain actions and global information technology outsourcing and ERP implementation activities; increases in interest rates or the costs of borrowing; potential limitations on the company’s business activities from obligations in the company’s debt agreements; adverse changes in government and third-party payor reimbursement levels and practices; decreased availability or increased costs of materials which could increase the company's cost of producing or acquiring the company's products, including the adverse impacts of tariffs and increases in commodity costs or freight costs; consolidation of health care providers; increasing pricing pressures in the markets for the company's products; risks of failures in, or disruptions to, legacy IT systems; risks of cybersecurity attack, data breach or data loss and/or delays in or inability to recover or restore data and IT systems; adverse effects of the company's consent decree of injunction with the U.S. Food and Drug Administration (FDA), including but not limited to, compliance costs, inability to rebuild negatively impacted customer relationships, unabsorbed capacity utilization, including fixed costs and overhead; any circumstances or developments that might adversely impact the third-party expert auditor's required audits of the company's quality systems at the facilities impacted by the consent decree, including any possible failure
to comply with the consent decree or FDA regulations or the inability to adequately address the matters identified to us by the FDA; regulatory proceedings or the company's failure to comply with regulatory requirements or receive regulatory clearance or approval for the company's products or operations in the United States or abroad; adverse effects of regulatory or governmental inspections of the company's facilities at any time and governmental enforcement actions; product liability or warranty claims; product recalls, including more extensive warranty or recall experience than expected; exchange rate fluctuations, particularly in light of the relative importance of the company's foreign operations to its overall financial performance; legal actions, including adverse judgments or settlements of litigation or claims in excess of available insurance limits; tax rate fluctuations; additional tax expense or additional tax exposures, which could affect the company's future profitability and cash flow; uncollectible accounts receivable; risks inherent in managing and operating businesses in many different foreign jurisdictions; heightened vulnerability to a hostile takeover attempt or other shareholder activism; provisions of Ohio law or in the company's debt agreements, charter documents or other agreements that may prevent or delay a change in control, and those other risks and uncertainties expressed in the cautionary statements and risk factors in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. The company may not be able to predict and may have little or no control over many factors or events that may influence its future results and, except to the extent required by law, the company does not undertake and specifically declines any obligation to review or update any forward-looking statements or publicly announce the results of any revisions to any such statements to reflect future events or developments or otherwise.
