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Delaware
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000-26966
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84-0846841
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1625 Sharp Point Drive, Fort Collins, Colorado
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80525
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(Address of principal executive offices)
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(Zip Code)
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(970) 221-4670
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(Registrant's telephone number, including area code)
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Not applicable
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(Former name or former address, if changed since last report)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibits
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10.1
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Executive Transition and Separation Agreement, dated November 17, 2014
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99.1
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Press release dated November 18, 2014 by Advanced Energy Industries, Inc.
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/S/ Thomas O. McGimpsey
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Date: November 18, 2014
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Thomas O. McGimpsey
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Executive Vice President, General Counsel
& Corporate Secretary
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Exhibit Number
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Description
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10.1
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Executive Transition and Separation Agreement, dated November 17, 2014
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99.1
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Press release dated November 18, 2014 by Advanced Energy Industries, Inc.
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(i)
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The Transition Period
. During the Transition Period, the Executive shall continue to serve actively in the position of Chief Financial Officer of AEI, in good faith and in full compliance with AEI’s policies, procedures and internal controls. During the Transition Period, Executive must use commercially reasonable best efforts to fulfill his standard duties, provide a written transition plan reasonably satisfactory to the Board and CEO, engage in any dispute negotiations with third parties as requested by the CEO, fulfill all SEC-related duties related to the annual audit and the signing/filing of the AEI Form 10-K and any other required filings, and any additional duties requested in good faith by the CEO of AEI or the Board from time to time.
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(ii)
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Base Salary
.
Executive’s annual base salary during the Transition Period while serving as the Chief Financial Officer shall be the same as Executive’s annual base salary immediately prior to the Transition Period. This Agreement shall not be deemed a contract of employment.
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(iii)
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Termination
. Unless terminated earlier for Cause or voluntarily by Executive, Executive’s employment shall terminate March 10, 2015,
provided
however
, that the CEO may, by written notice to Executive, accelerate such termination and end the Transition Period as early as the CEO so determines, or delay such termination by up to no more than 30 days after March 10, 2015 (the “Termination Date”).
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(iv)
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Effect of Termination
. In the event that (a) Executive continues employment with AEI though March 10, 2015 (or such permitted accelerated or delayed date) or is terminated by AEI without Cause prior to such time, (b) Executive uses his commercially reasonable best efforts to cause the AEI Form 10-K to be timely signed and filed (unless waived by the AEI as a condition precedent related to early termination), and (c) Executive fully complies with all of his obligations in this Agreement and under law, Executive shall be eligible for the benefits and payments set forth on Addendum A to this Agreement. In the event that Executive’s employment is terminated for Cause, Executive will not be entitled to receive the benefits or payments set forth on Addendum A to this Agreement. If Executive voluntarily terminates his employment with AEI for any reason, he will not be entitled, to the extent not already paid, to any of the benefits or payments set forth in Addendum A or the continued payment of the base compensation set forth in Section II.B.(ii) of this Agreement.
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C.
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Release Of Claims
By Executive
.
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(i)
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Release
. As a material inducement to AEI to enter into this Agreement, Executive, as a free and voluntary act, hereby forever releases and discharges the Company for any Claims of any kind whatsoever, which may have arisen on or prior to Executive’s execution of this Agreement, including but not limited to (a) Claims relating in any way to Executive’s employment with AEI and/or the employment opportunities that were provided and/or denied to Executive, (b) Claims relating in any way to the separation of Executive’s employment with AEI, (c) Claims related to Executive’s compensation provided by AEI, (d) Claims related to AEI’s Long-Term Incentive Plan (“LTIP”) (other than LTIP awards that are vested and/or exercisable as of the Effective Date) or Short-Term Incentive Plan (“STIP”), (e) Claims related to the Executive Change in Control Agreement dated August 14, 2010, as amended (“Executive Change in Control Agreement”), or (f) Claims related to any other matter, cause or thing whatsoever which may have occurred between Executive and the Company on or prior to Executive’s execution of this Agreement. Executive’s acknowledges and agrees that he will no longer be an eligible participant under AEI’s STIP, LTIP or any other incentive plan.
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(ii)
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Waiver of Rights following Termination Date
. As a material inducement to AEI to enter into this Agreement, Executive agrees to provide AEI with an executed Confidential General Release (“Release”) in form and substance as set forth in
Addendum B
, no earlier than the Termination Date and no later than 21 days after the Termination Date, which Release is a condition of payment of the Separation Payment and Severance Payment set forth on
Addendum A
.
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(iii)
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Release Applies To Representative Actions
.
The above release applies to any Claims brought by any person or agency on behalf of Executive,
or any class or representative action pursuant to which Executive may have any right or benefit. Executive waives his right to and promises not to accept any recoveries, benefits or injunctive relief which may be obtained on Executive’s behalf by any other person or agency or in any class or representative action that may include or encompass any of the released Claims, and Executive assigns any such recovery or benefit to AEI.
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(i)
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Except as otherwise specifically provided in this Agreement, Executive will not disclose any of the negotiations leading to the making of this Agreement or any of the terms or provisions of this Agreement to any other person or entity other than Executive’s spouse, tax accountant, executive coach, attorney, or taxing authority (each, a “Permitted Recipient”). Executive represents and warrants that he has not made any disclosure of any of the terms or provisions of this Agreement or any of the negotiations leading to the making of this Agreement to any other person or entity, except to a Permitted Recipient.
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(a)
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Executive acknowledges that AEI may be required to file this Agreement, or disclose its material terms, in reports filed with the SEC, and Executive shall cooperate with AEI in connection with any such reports.
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(b)
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It shall not be a breach of this Agreement for Executive to disclose the terms and provisions of this Agreement in response to any lawful court order or subpoena, provided Executive first gives AEI as much notice as is possible of the existence of the subpoena or court order so that AEI can object to the court order or subpoena.
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(ii)
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Non-Disparagement. Executive agrees not to make, or cause or attempt to cause any other person to make any statement, written or oral, or convey any information about AEI which is disparaging or which in any way reflects negatively upon AEI, its management team, board of directors, employees or affiliates. Executive and AEI agree that nothing in this Agreement is meant to preclude AEI or Executive from fully and truthfully cooperating with any government investigation or inquiry.
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(iii)
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Executive acknowledges and agrees that he continues to be bound by the restrictive covenants set forth in the Key Employee Agreement (defined below) including but not limited to confidentiality of AEI information, non-solicitation and non-competition.
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Executive
/s/ Danny C. Herron___________
Danny C. Herron
Executive
Dated: November 17, 2014
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Advanced Energy Industries, Inc.
/s/ Thomas O. McGimpsey____________
Executive Vice President, General Counsel & Corporate Secretary
Authorized Officer
Dated: November 17, 2014
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1.
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A payment equal to $575,000.00 payable at the next regular payroll cycle after the Termination Date and a second payment equal to $100,000 payable within 60 days after his Termination Date (collectively, the “Separation Payment”).
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2.
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The Separation Payment is subject to recoupment by AEI if: (a) the AEI financial statements become the subject of a material restatement within three (3) years of Executive’s Termination Date due to an error that was caused, or contributed to, by Executive’s negligence, fraud or willful misconduct, including without limitation, any negligence, fraud or willful misconduct in Executive’s management, oversight and supervision; or (b) Executive materially breaches the Agreement. To the extent the Separation Payment is characterized as a bonus, it is subject to recoupment under applicable law, including without limitation Section 954 of the Dodd-Frank Act and Section 304 of the Sarbanes-Oxley Act. Executive acknowledges that, in the event grounds exist for recoupment of the Separation Payment, any amounts subject to recoupment may be set off from amounts otherwise owed by AEI to Executive. The term “material restatement” used in this paragraph is not intended to apply to a retrospective revision of the company’s audited financial statements due to a subsequent change in accounting principle, subsequent occurrence of discontinued operations or as a result of subsequent change in segment reporting.
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3.
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Subject to the terms of this Agreement, AEI agrees to make a severance payment equal to $108,130.00 (the “Severance Payment”). The Severance Payment will paid in four (4) monthly installment payments with 25% paid each month or $27,032.50. These payments will be made on the normal payroll cycle for each of the 4 months following Executive’s Termination Date.
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4.
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The Separation Payment and Severance Payment are subject to appropriate taxes and withholding allowances.
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5.
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In addition to the release and waiver of certain claims set forth in Section II.C.(i)(d) of the Agreement, Executive acknowledges and agrees that (a) Executive is not eligible for an STIP award or other annual bonus with respect to the 2014 performance year or any future year, and (b) any LTIP award granted or portion thereof, that has not vested or is not exercisable (i.e., Executive is not eligible for the LTIP grants related to the 2014 performance year or any future year) as of the Effective Date shall be forfeited without further action by AEI.
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6.
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AEI Severance Policy Waiver
. Executive acknowledges and agrees that this Agreement supersedes any other AEI severance policy as provided to employees generally under the current Corporate Policy Manual and will be in satisfaction and in lieu of any other severance (including but not limited to statutory or contractual severance), notice period, wrongful termination damages or any other claims or rights Executive may have arising out of the termination of Executive’s employment.
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I accept the terms and conditions of this Addendum:
/s/_Danny C. Herron______________
Danny C. Herron
Executive
Date: November 17, 2014
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Advanced Energy Industries, Inc.
By:
/s/ Thomas O. McGimpsey________
Its: Executive Vice President, General Counsel & Corporate Secretary
Date: November 17, 2014
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Grant Date
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Plan/Type
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Price
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Unvested
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Comments
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02/15/2011
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2008/ISO
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$14.5200
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6,563.00
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Eligible to vest on 2/15/2014 if still employed
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04/28/2011
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2008/ISO
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$14.2100
|
331.00
|
Eligible to vest on 4/28/15 if still employed
|
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04/28/2011
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2008/NQ
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$14.2100
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6,232.00
|
Eligible to vest on 4/28/15 if still employed
|
07/22/2011
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2008/NQ
|
$12.4400
|
6,563.00
|
Eligible to vest on 7/22/15 if still employed
|
10/26/2011
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2008/NQ
|
$9.5100
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3282.00
|
Eligible to vest on 10/26/2015 if still employed
|
01/03/2012
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2008/NQ
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$11.0200
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Up to 50,906.00
|
Waived and cancelled as of the Effective Date
|
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02/15/2011
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2008/RSU
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N/A
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938.00
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Eligible to vest on 2/15/2014 if still employed
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04/28/2011
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2008/RSU
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N/A
|
938.00
|
Eligible to vest on 4/28/15 if still employed
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07/22/2011
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2008/RSU
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N/A
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938.00
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Eligible to vest on 7/22/15 if still employed
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10/26/2011
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2008/RSU
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N/A
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469.00
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Eligible to vest on 10/26/2015 if still employed
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02/01/2013
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2008/RSU
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N/A
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Up to 59,392.00
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Waived and cancelled as of the Effective Date
|
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1.
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Waiver of Rights
. As a material inducement to AEI to enter into the Agreement, Executive, as a free and voluntary act, hereby forever releases and discharges the Company for any Claims of any kind whatsoever, which may have arisen on or prior to Executive’s execution of this Release, including but not limited to (a) Claims relating in any way to Executive’s employment with AEI and/or the employment opportunities that were provided and/or denied to Executive, (b) Claims relating in any way to the separation of Executive’s employment with AEI, (c) Claims related to Executive’s compensation provided by AEI, (d) Claims related to AEI’s Long-Term Incentive Plan (“LTIP”) (other than LTIP awards that are vested and/or exercisable as of the Effective Date) or Short-Term Incentive Plan (“STIP”), (e) Claims related to the Executive Change in Control Agreement dated August 14, 2010, as amended, or (f) Claims related to any other matter, cause or thing whatsoever which may have occurred between Executive and the Company on or prior to Executive’s execution of this Release.
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____________________
Danny C. Herron
Executive
Date: _______________
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CONTACTS:
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Danny Herron
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Annie Leschin
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Advanced Energy Industries, Inc.
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Advanced Energy Industries, Inc.
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970.407.6570
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970.407.6555
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danny.herron@aei.com
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ir@aei.com
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Advanced Energy Industries Announces CFO Transition
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