Knowles Corp (Form: 8-K, Received: 03/11/2014 16:17:53)

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): March 7, 2014

Knowles Corporation

(Exact name of registrant as specified in its charter)

Delaware

001-36102

90-1002689

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)


1151 Maplewood Drive
Itasca, Illinois		60143
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 630-250-5100

Not Applicable

(Former name or former address, if changed since last report)

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:

¨	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))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Founders’ and Annual Equity Grants

On March 7, 2014, Knowles Corporation (the “Company”) granted equity awards to certain executive officers and select key employees of the Company under the Knowles Corporation 2014 Equity and Cash Incentive Plan (the “Plan”), including the following awards to the named executive officers of the Company:


Named Executive Officer	Founders’ Restricted Stock Units		Founders’ Stock Options		Annual Restricted Stock Units		Annual Stock Options
Jeffrey S. Niew		54,182		177,778		33,864		133,333
John S. Anderson		10,159		33,333		9,482		37,333
David W. Wightman		4,064		13,333		4,064		16,000
Michael A. Adell		13,546		44,444		8,127		32,000
Raymond D. Cabrera		10,159		33,333		4,064		16,000

The founders’ restricted stock unit (“RSU”) and stock option grants vest in equal parts on the third and fourth anniversaries of the date of grant (March 7, 2017 and 2018) and the annual RSU and stock option grants vest in equal parts on the first three anniversaries of the date of grant or the following business day (March 9, 2015, March 7, 2016 and March 7, 2017), in each case subject to the terms and conditions of the Plan. The RSUs and stock options are to be settled in shares of the Company’s common stock. The stock options each have an exercise price of $29.53, which was the closing price per share of the Company’s common stock on the New York Stock Exchange on March 7, 2014.

The RSU awards were granted pursuant to a Restricted Stock Unit Award Agreement, the form of which is filed herewith as Exhibit 10.1 and incorporated herein by reference, and the stock option awards were granted pursuant to a Stock Option Award Agreement, the form of which is filed herewith as Exhibit 10.2 and incorporated herein by reference.

Separation-Related Equity Adjustments

In connection with the separation (the “Separation”) of the Company from Dover Corporation (“Dover”), the Company and Dover entered into an Employee Matters Agreement dated February 28, 2014. Pursuant to such Agreement, on March 7, 2014, all stock appreciation rights relating to Dover’s common stock (the “Dover SARs”) outstanding immediately prior to the Separation that were held by persons who were employees of the Company immediately after the Separation, including the named executive officers of the Company, were converted into new stock appreciation rights under the Plan (the “Converted SARs”) based on a ratio of 3.004 (the “Ratio”), which represents the average five-day pre-Separation price of Dover common stock over the average five-day post-Separation price of the Company’s common stock. The number of Dover SARs held by each such employee was multiplied by the Ratio to determine the number of Converted SARs granted to such employee. The exercise price of each such Dover SARs was divided by the Ratio to determine the exercise price of the respective Converted SARs.

In addition, all performance shares relating to Dover’s common stock with a performance period ending after the Separation (the “Dover Performance Shares”) that were held by persons who were employees of the Company immediately after the Separation, including the named executive officers of the Company, were converted into new time-based RSUs under the Plan (the “Converted RSUs”). The number of shares of Dover’s common stock that would be payable upon the settlement of the Dover Performance Shares (assuming target performance levels) was multiplied by the Ratio to determine the number of Converted RSUs granted to such employee.

The number of Converted SARs and Converted RSUs received by each named executive officer is as follows:


Named Executive Officer	Converted SARs		Converted RSUs
Jeffrey S. Niew		250,107		13,160
John S. Anderson		63,185		5,265
David W. Wightman		129,876		0
Michael A. Adell		56,563		0
Raymond D. Cabrera		70,101		1,880

The Converted SARs were granted under the Plan pursuant to a Replacement SSAR Agreement, the form of which is filed herewith as Exhibit 10.3 and incorporated herein by reference. The Converted SARs are subject to the same terms, vesting conditions, exercise procedures, expiration dates, termination provisions and other terms and conditions as were in effect immediately prior to the Separation. The Converted SARs have exercise prices ranging from $14.28 to $23.92.

The Converted RSUs were granted under the Plan pursuant a Replacement Restricted Stock Unit Award Agreement, the form of which is filed herewith as Exhibit 10.4 and incorporated herein by reference. The Converted RSUs are subject to the same terms, vesting conditions, issuance dates, method of distribution and other terms and conditions that were in effect immediately prior to Separation, except as noted above.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number		Description

10.1		Form of Restricted Stock Unit Award Agreement

10.2		Form of Stock Option Award Agreement

10.3		Form of Replacement SSAR Agreement

10.4		Form of Replacement Restricted Stock Unit Award Agreement

SIGNATURES

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.


	KNOWLES CORPORATION

Date: March 11, 2014

	By:	/s/ Joseph W. Schmidt
		Joseph W. Schmidt
		Senior Vice President, General Counsel

EXHIBIT INDEX


Exhibit Number		Description

10.1		Form of Restricted Stock Unit Award Agreement

10.2		Form of Stock Option Award Agreement

10.3		Form of Replacement SSAR Agreement

10.4		Form of Replacement Restricted Stock Unit Award Agreement

Exhibit 10.1

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Restricted Stock Unit Award Agreement

Grant Date: [ ]

Your restricted stock unit award is subject to all the terms and provisions of the Knowles Corporation 2014 Equity and Cash Incentive Plan (“Plan”), which terms and provisions are expressly incorporated into and made a part of the award as if set forth in full herein. A copy of the Plan can be found on the Merrill Lynch stock plan administration website.

In addition, your award is subject to the following:

Restricted Stock Units are a bookkeeping entry on the books of Knowles. No shares of Knowles common stock shall be issued to you in respect of the Restricted Stock Unit award until the restrictions have lapsed. In the event that your employment shall terminate other than for death or disability prior to your vesting in the Restricted Stock Units, the Restricted Stock Units shall be forfeited. Within 30 days following the end of the Restricted Period, Knowles shall issue shares of Common Stock in your name equal to the number of Restricted Stock Units that have vested during the Restricted Period, less applicable tax withholding.

You shall vest in the Restricted Stock Unit Award, and all restrictions thereon shall lapse, per the dates on your Award Statement. You must be an active employee of Knowles or an affiliate at the end of the Restricted Period in order for your Restricted Shares to vest, with certain exceptions as provided in the Plan.

During the Restricted Period you shall not have any rights of a stockholder or the right to receive any dividends declared and other distributions paid with respect to the Restricted Stock Units. Within 30 days after the end of the Restricted Period, you shall be paid all Dividend Equivalents with respect to the Restricted Stock Units that have vested.

You do not have any voting rights with respect to Restricted Stock Units.

As a condition of receiving your Restricted Stock Unit award, you agree to be bound by the terms and conditions of the Knowles Corporation Anti-hedging and Anti-pledging Policy, and any Clawback Policy to be adopted by Knowles, as such policies may be in effect from time to time. The Anti-hedging and Anti-pledging Policy prohibits hedging or pledging any Knowles equity securities held by you or certain designees, whether such Knowles securities are, or have been, acquired under the Plan, another compensation plan sponsored by Knowles, or otherwise. Please review the Anti-hedging and Anti-pledging Policy to make sure that you are in compliance. You may obtain a copy of the current version of the Anti-hedging, Anti-pledging, and any Clawback Policy to be adopted by Knowles, on the Merrill Lynch stock plan administration website.

For Non-US Employees, your Restricted Stock Unit award is subject to the conditions of the attached Addendum for Non-US Employees.

Your award is not transferable by you other than by will or the laws of descent and distribution and in accordance with the applicable terms and conditions of the Plan.

Knowles reserves the right to amend, modify, or terminate the Plan at any time in its discretion without notice.

You must accept this award by logging onto the Merrill Lynch stock plan administration website.

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Exhibit 10.2

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Stock Option Award Agreement

Grant Date: [ ]

Your Stock Option award is subject to all the terms and provisions of the Knowles Corporation 2014 Equity and Cash Incentive Plan (“Plan”), which terms and provisions are expressly incorporated into and made a part of the award as if set forth in full herein. A copy of the Plan can be found on the Merrill Lynch stock plan administration website.

In addition, your Stock Option is subject to the following:

Your Stock Option is subject to earlier termination as provided in the Plan, for example, upon termination of employment prior to the expiration date.

It is your responsibility to keep track of your Stock Option grants and to ensure that you exercise your Stock Options before they expire. Knowles is not responsible for reminding or notifying you that your Stock Option is nearing its expiration date.

You shall vest in the Stock Option, and the Stock Option shall become exercisable, per the dates on your Award Statement. You must be an active employee of Knowles or an affiliate on a vesting date in order for your Stock Options to vest, with certain exceptions as provided in the Plan.

You may exercise your options using any of the methods set forth in the plan, including cashless exercise procedures whereby Merrill Lynch will advance the cash needed to exercise the Stock Option and you instruct Merrill Lynch to sell all or a portion of the shares acquired upon exercise of the option, and Merrill Lynch will pay you the proceeds of the sale, less the exercise price, taxes, commissions. You must first establish an account with Merrill Lynch to use the cashless exercise procedure.

As a condition of receiving your Stock Option award, you agree to be bound by the terms and conditions of the Knowles Corporation Anti-hedging and Anti-pledging Policy and by any Clawback Policy to be adopted by Knowles, as such policies may be in effect from time to time. The Anti-hedging and Anti-pledging Policy prohibits hedging or pledging any Knowles equity securities held by you or certain designees, whether such Knowles securities are, or have been, acquired under the Plan, another compensation plan sponsored by Knowles, or otherwise. Please review the Anti-hedging and Anti-pledging Policy to make sure that you are in compliance. You may obtain a copy of the current version of the Anti-hedging and Anti-pledging Policy, and any Clawback Policy to be adopted by Knowles, on the Merrill Lynch stock plan administration website.

For Non-US Employees, your Stock Option award is subject to the terms and conditions of the attached Addendum for Non-US Employees.

Your Stock Option is not transferrable by you other than by will or the laws of descent and distribution and in accordance with the applicable terms and conditions of the Plan.

Knowles reserves the right to amend, modify, or terminate the Plan at any time in its discretion without notice.

You must accept this award by logging onto the Merrill Lynch stock plan administration website.

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Exhibit 10.3

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Replacement SSAR Agreement

Grant Date: [ ]

In connection with the spin-off of Knowles Corporation from Dover Corporation, this Replacement Stock Settled Appreciation Right (“SSAR”) Award is granted to you under the Knowles Corporation 2014 Equity and Cash Incentive Plan (“Plan”) in substitution for the SSAR awards made to you under the Dover Corporation Equity and Cash Incentive Plans. Your SSAR award is subject to all the terms and provisions of the Plan, which terms and provisions are expressly incorporated into and made a part of the award as if set forth in full herein. A copy of the Plan can be found on the Merrill Lynch stock plan administration website.

In addition, your SSAR is subject to the following:

Your SSAR is subject to earlier termination as provided in the Plan, for example, upon termination of employment prior to the expiration date.

It is your responsibility to keep track of your SSAR awards and to ensure that you exercise your SSARs before they expire. Knowles is not responsible for reminding or notifying you that your SSARs are nearing its expiration date.

You shall vest in the SSARs, and the SSARs shall become exercisable, per the dates on your Award Statement. You must be an active employee of Knowles or an affiliate on a vesting date in order for your SSARs to vest, with certain exceptions as provided in the Plan.

Upon exercise of your SSARs, you will be entitled to receive from Dover that number of whole shares of Knowles Common Stock equal in value, on the date of exercise of the SSARs, to the excess of (A) the value of a share of Knowles Common Stock on the date of exercise of the SSARs multiplied by the number of SSARs being exercised over (B) the sum of (i) the per share base price of the SSARs being exercised multiplied by the number of SSARs being exercised, plus (ii) unless you elect to pay such tax in cash, any amount of tax that must be withheld in connection with such exercise. Fractional shares shall be disregarded.

As a condition of receiving your SSAR award, you agree to be bound by the terms and conditions of the Knowles Corporation Anti-hedging and Anti-pledging Policy and by any Clawback Policy to be adopted by Knowles, as such policies may be in effect from time to time. The Anti-hedging and Anti-pledging Policy prohibits hedging or pledging any Knowles equity securities held by you or certain designees, whether such Knowles securities are, or have been, acquired under the Plan, another compensation plan sponsored by Knowles, or otherwise. Please review the Anti-hedging and Anti-pledging Policy to make sure that you are in compliance. You may obtain a copy of the current version of the Anti-hedging and Anti-pledging Policy, and any Clawback Policy to be adopted by Knowles, on the Merrill Lynch stock plan administration website.

For Non-US Employees, your SSAR award is subject to the terms and conditions of the attached Addendum for Non-US Employees.

Your SSARs are not transferrable by you other than by will or the laws of descent and distribution and in accordance with the applicable terms and conditions of the Plan.

Knowles reserves the right to amend, modify, or terminate the Plan at any time in its discretion without notice.

You must accept this award by logging onto the Merrill Lynch stock plan administration website.

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Exhibit 10.4

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Replacement Restricted Stock Unit Award Agreement

Grant Date: [ ]

In connection with the spin-off of Knowles Corporation from Dover Corporation, this Replacement Restricted Stock Unit Award is granted to you under the Knowles Corporation 2014 Equity and Cash Incentive Plan (“Plan”) in substitution for the Performance Share awards made to you under the Dover Corporation Equity and Cash Incentive Plans. Your Replacement Restricted Stock Unit award is subject to all the terms and provisions of the Plan, which terms and provisions are expressly incorporated into and made a part of the award as if set forth in full herein. A copy of the Plan can be found on the Merrill Lynch stock plan administration website.

In addition, your award is subject to the following:

Replacement Restricted Stock Units are a bookkeeping entry on the books of Knowles. No shares of Knowles common stock shall be issued to you in respect of the Replacement Restricted Stock Unit award until the restrictions have lapsed. In the event that your employment shall terminate other than for death or disability prior to your vesting in the Replacement Restricted Stock Units, the Replacement Restricted Stock Units shall be forfeited. Within 30 days following the end of the Restricted Period, Knowles shall issue shares of Common Stock in your name equal to the number of Replacement Restricted Stock Units that have vested during the Restricted Period, less applicable tax withholding.

You shall vest in the Replacement Restricted Stock Unit Award, and all restrictions thereon shall lapse, per the dates on your Award Statement. You must be an active employee of Knowles or an affiliate at the end of the Restricted Period in order for your Restricted Shares to vest, with certain exceptions as provided in the Plan.

During the Restricted Period, you shall not have any rights of a stockholder or the right to receive any dividends declared and other distributions paid with respect to the Replacement Restricted Stock Units. Within 30 days after the end of the Restricted Period, you shall be paid all Dividend Equivalents with respect to the Replacement Restricted Stock Units that have vested.

You do not have any voting rights with respect to Replacement Restricted Stock Units.

As a condition of receiving your Replacement Restricted Stock Unit award, you agree to be bound by the terms and conditions of the Knowles Corporation Anti-hedging and Anti-pledging Policy, and any Clawback Policy to be adopted by Knowles, as such policies may be in effect from time to time. The Anti-hedging and Anti-pledging Policy prohibits hedging or pledging any Knowles equity securities held by you or certain designees, whether such Knowles securities are, or have been, acquired under the Plan, another compensation plan sponsored by Knowles, or otherwise. Please review the Anti-hedging and Anti-pledging Policy to make sure that you are in compliance. You may obtain a copy of the current version of the Anti-hedging, Anti-pledging, and any Clawback Policy to be adopted by Knowles, on the Merrill Lynch stock plan administration website.

For Non-US Employees, your Replacement Restricted Stock Unit award is subject to the conditions of the attached Addendum for Non-US Employees.

Your award is not transferable by you other than by will or the laws of descent and distribution and in accordance with the applicable terms and conditions of the Plan.

Knowles reserves the right to amend, modify, or terminate the Plan at any time in its discretion without notice.

You must accept this award by logging onto the Merrill Lynch stock plan administration website.

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