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

January 9, 2018

Date of Report (Date of earliest event reported)

 

 

ESTERLINE TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-06357   13-2595091

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

500-108 th Avenue NE, Bellevue, Washington   98004
(Address of principal executive offices)   (Zip Code)

(425) 453-9400

(Registrant’s telephone number, including area code)

 

 

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 communication 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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

On January 9, 2018, Esterline Technologies Corporation (“Esterline”) announced that the Board of Directors appointed Stephen Nolan as Executive Vice President & Chief Financial Officer, effective February 5, 2018 (the “Effective Date”). Mr. Nolan will succeed Mr. Robert D. George, the Company’s current Executive Vice President, Chief Financial Officer & Corporate Development, who is retiring from Esterline.

Appointment of Mr. Nolan

Mr. Nolan, 48, has served since February 2015 as Senior Vice President and Chief Financial Officer of Vista Outdoor Inc., a leading global manufacturer of consumer products in the outdoor sports and recreation markets that was spun out of Alliant Techsystems Inc., or ATK, in connection with the merger of ATK and Orbital Sciences in 2015. Prior to this position, he served as Senior Vice President of Strategy and Business Development of Orbital ATK (a designer and supplier of space, defense and aviation-related systems) from July 2013 to February 2015. From February 2013 through July 2013, he served as Orbital ATK’s Interim Senior Vice President of Business Development. From 2010 to 2013, he was Orbital ATK’s Vice President, Strategy and Business Development, Aerospace Systems. Prior to that, he held a number of leadership positions across Orbital ATK. Before joining Orbital ATK in 2006, he was a Director of Corporate Strategy and Development at Raytheon Company. Mr. Nolan holds a B.S. in engineering from Trinity College at the University of Dublin, an M.S. in Civil Engineering from the from the University of Massachusetts Amherst and an M.B.A. from the Massachusetts Institute of Technology.

In connection with the new appointment, Mr. Nolan agreed to the terms of an offer letter agreement with Esterline. Mr. Nolan, like all other executive officers of Esterline, will serve at the pleasure of the Board of Directors. Pursuant to the offer letter, effective on the Effective Date, Mr. Nolan will receive an annual base salary of $525,000. He will also receive a new hire stock option to purchase 21,100 shares of Esterline common stock with an exercise price equal to the closing trading price of Esterline common stock on the Effective Date and a new hire award of 8,450 restricted stock units.

Pursuant to the offer letter, Mr. Nolan will be eligible to participate in Esterline’s Annual Incentive Compensation Plan for fiscal year 2018 on a pro-rated basis, and his target will equal 70% of his base salary for fiscal year 2018. He will also be eligible to participate in Esterline’s Long Term Incentive Program (“LTIP”) beginning in fiscal year 2019, with a total annual target value of 150% of Mr. Nolan’s base salary. The value of Mr. Nolan’s LTIP award will be allocated in accordance with the LTIP that will be effective for fiscal 2019.

Mr. Nolan will also be eligible to participate in Esterline’s retirement, health care and other benefit plans and in the Supplemental Retirement Income Plan and the Supplemental Executive Retirement and Deferred Compensation Plan. Mr. Nolan will also receive a car allowance of up to approximately $800 per month, before taxes, and up to $8,000 annually for financial planning services. Esterline will also reimburse him for certain relocation expenses in accordance with standard corporate policy.

Upon the effectiveness of Mr. Nolan’s appointment, Esterline and Mr. Nolan will enter into a Termination Protection Agreement, similar to those in place with the company’s other executive officers, that generally provides for the following compensation benefits in the event that Mr. Nolan is terminated without cause or resigns for good reason within two years after the day preceding a change of control: (1) a pro rata amount of Mr. Nolan’s target annual incentive compensation, (2) a lump sum payment equal to all other earned, but unpaid amounts, (3) a lump sum payment equal to three times Mr. Nolan’s annual base salary plus target annual incentive compensation, (4) full vesting of all outstanding unvested equity awards, (5) payment of certain legal fees and expenses associated with the termination, and (6) an amount equal to the then-current COBRA premium rate for Mr. Nolan and his dependents multiplied by the number of months remaining in the two-year period following the change of control multiplied by 1.4.

The foregoing summary of the material terms of Mr. Nolan’s offer letter is qualified in its entirety by the full text of the offer letter, which is filed with this report as Exhibit 10.1 and incorporated herein by reference.

Retirement of Mr. George

Effective February 5, 2018, Mr. George will retire from his current positions with Esterline. Mr. George will remain employed through June 30, 2018 to support the transition of responsibilities to Mr. Nolan as well as special activities at the request of the CEO.

 

Item 7.01. Regulation FD Disclosure.

On January 9, 2018, Esterline issued a press release regarding the changes described in this report, which is furnished as Exhibit 99.1 to this report.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

  

Description

10.1    Offer Letter from Esterline Technologies Corporation to Stephen Nolan dated December 20, 2017.
99.1    Press release issued by Esterline Technologies Corporation dated January 9, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      ESTERLINE TECHNOLOGIES CORPORATION
Dated: January 9, 2018     By:  

/s/ MARCIA J. MASON

      Name:   Marcia J. Mason
      Title:   Executive Vice President & General Counsel

Exhibit 10.1

 

LOGO

December 20, 2017

Stephen Nolan

[Address]

[Address]

Dear Stephen,

I am pleased to confirm our offer to you for the position of Chief Financial Officer at Esterline Technologies Corporation. You will report directly to me and I would like you to start on February 5, 2018.    

Your total compensation at Esterline will be comprised of several components in direct pay and benefits.

 

  •   Base Pay : As we discussed, your annual base salary rate will be $43,750 gross monthly ($525,000 annual equivalent) paid on our normal bi-weekly payroll cycle.

 

  •   Annual Incentive Compensation : You will also participate in Esterline’s Annual Incentive Compensation Plan for the current fiscal year, pro-rated based on full months of employment during the fiscal year, which ends on the last Friday in September. Your target award will be 70% of your base salary. We will provide you with a copy of the Plan shortly after you begin work.

 

  •   Long-Term Incentives : You will be recommended to the Board of Directors for appointment to Esterline’s Long-Term Incentive Plan (LTIP) with a target value of 150% of your annual base salary. Plan details will be provided to you shortly after your appointment to the Plan.

 

  •   Special, New Hire Equity Grants – You will also receive new hire equity grants following your first day, consisting of 21,100 stock options (four-year ratable vesting at 25% per year) and 8,450 Restricted Stock Units (100% vested after three years from grant date).

Note that as an officer of the company you will be subject to our share ownership policy that requires officers to hold shares of stock equal to 3x base salary. There is an expectation that the level of ownership will occur through equity awards made to officers under our executive compensation programs. Currently there are no specific expectations or requirements regarding the time period within which an executive must satisfy his or her ownership requirement.

 

1

LOGO

 

As a corporate executive officer, you will be covered by Esterline’s Termination Protection Agreement. This document will be provided to you along with other plan details once you begin employment with Esterline.

In your new role, you will also be eligible for a car allowance under the Esterline car policy. The allowance is intended to cover usual purchase, operating, maintenance, and insurance costs for cars in your residential zip code. Additionally, you’ll be eligible to receive up to $8,000 credit annually to be used for financial planning services.

This offer also includes relocation benefits as described in the enclosed policy. Please contact Melinda Starbird in Human Resources to initiate your relocation process with our relocation provider, Cartus. They can help you with any questions about your relocation. In the event that you voluntarily leave the Company or if your employment is terminated by Esterline for cause within 12 months of your date of hire, you will be responsible for reimbursing the company for the entire relocation benefit and after 12 months and up to 24 months, you will be responsible for reimbursing the company for a pro-rata gross share (n/24 based on number of months worked) of the relocation benefit you received.

Health, retirement, and other benefits will be available to you in accordance with Esterline’s usual benefit programs, which changes from time to time. See the attached summary of current benefits for further information.

As of your start date you will accrue paid vacation at the rate of 4 weeks per year and the standard company accrual for paid sick time.

Requirements and Administrative Matters – This offer is contingent upon the following:

 

  •   Satisfactory completion of a pre-employment physical examination and drug screen

 

  •   Passing a background check

The physical examination is an annual requirement for all corporate executives. Please schedule an appointment at your earliest convenience to complete the pre-employment physical as well as the drug screen and have your doctor return the signed form back to:

EVP and Chief HR Officer

Esterline Technologies Corporation

500 108 th Ave NE

Suite 1500

Bellevue, WA 98004

USA

With respect to the drug test, you will receive an email in the next few days from our vendor, HireRight. It will require you to go to a local facility for testing. Please reach out to Melinda should you require any assistance.

 

2

LOGO

 

These final conditions must be completed before you can begin work. In addition, please read, sign, and return the following to Melinda.starbird@esterline.com.

 

  •   A signed copy of this letter

 

  •   Confidential Information & Inventions Assignment Agreement

 

  •   Summary of Outside Business Interests

General Policies – Except as specifically provided in this letter, all other aspects of your employment will be the same as those that apply to other corporate staff. We are all employed-at-will, and the officers serve at the pleasure of the Board for one-year terms subject to company by-laws.

Stephen, we look forward to your success as CFO at Esterline Corporation, and to your contributions to the corporation in this critical position. To accept this offer, please print this letter, sign, and return to Paul Benson. Please also read, complete, and return the other forms enclosed here.

If you have any questions at all, please contact me. I look forward to working with you.

Congratulations and best regards,

 

LOGO

Curtis R. Reusser

Chairman, President & CEO

 

I accept this offer as outlined above.      

  /s/ STEPHEN NOLAN

              12/22/17                    
Signature       Date

Attachments :

 

  •   Confidential Information & Inventions Assignment Agreement

 

  •   Summary of Outside Business Interests

 

  •   Benefits Summary

 

  •   Executive Physical Examination Form

 

  •   Relocation Plan Summary

 

  •   Relocation Repayment Agreement

 

3

Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

Contact: Investor Relations – John Hobbs

Media – Michelle DeGrand

+1 425-453-9400

ESTERLINE NAMES STEPHEN NOLAN TO SUCCEED ROBERT GEORGE AS THE COMPANY’S CHIEF FINANCIAL OFFICER

Following a transition period, George to retire from the company after 21 years

BELLEVUE, Wash., January 9, 2018 – Esterline Corporation (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving global aerospace and defense markets, today announced that Stephen Nolan, Chief Financial Officer for Vista Outdoor, Inc., will succeed Robert George as Esterline’s Chief Financial Officer, effective February 5, 2018. George, who has been with Esterline as Chief Financial Officer for 21 years, will remain with the company in a special advisory role to help ensure a seamless transition before retiring in June 2018.

Esterline Chief Executive Officer Curtis Reusser said, “As a valued team member and leader, Bob helped Esterline grow into a strong, multi-billion dollar global company during his tenure. I’m pleased to congratulate him on his well-earned retirement and am grateful for his many significant contributions. We are also excited to welcome Stephen, who has extensive experience within the aerospace and defense sector, an impressive track record of strategic execution, and a history of success serving in senior financial and business management roles in global manufacturing environments. I know his expertise in financial and strategic planning, and his results-oriented business leadership will offer valuable perspective to help Esterline achieve its objectives.”

Nolan has more than 15 years of experience in operational and strategic finance, most recently serving as Chief Financial Officer for Vista Outdoor, Inc., a publicly traded manufacturer of outdoor sports and recreation products. Nolan was instrumental in the formation and spin-off of

 

(more)

Page 2 of 3  Esterline Names Stephen Nolan as Chief Financial Officer

 

Vista Outdoor from its aerospace and defense parent company Alliant Techsystems (ATK) in 2015, as well as the related merger between ATK and Orbital Sciences to create Orbital ATK. These transactions unlocked more than $1.5 billion in shareholder value. Nolan quickly and effectively put together functional teams and financial infrastructure for Vista Outdoor, helping the company operate independently in less than a year. Prior to that, he spent nearly a decade in strategic and operational management roles with ATK, including Senior Vice President for Strategy and Business Development and several business unit leadership positions. Earlier in his career, Nolan served for five years in corporate development and strategy roles at Raytheon Company.

Nolan began his career in engineering and business consulting. He has a bachelor’s degree in engineering from Trinity College at the University of Dublin, a master’s degree in civil engineering from the University of Massachusetts Amherst, and an MBA from the Massachusetts Institute of Technology.

About Esterline:

Esterline Corporation is a leading worldwide supplier to the aerospace and defense industry specializing in three core business segments: Advanced Materials; Avionics & Controls; and Sensors & Systems. With annual sales of approximately $2 billion, Esterline employs roughly 13,000 people worldwide and is headquartered in Bellevue, Wash.

Operations within the Advanced Materials segment focus on technologies including high-temperature-resistant materials and components used for a wide range of military and commercial aerospace purposes, and combustible ordnance and electronic warfare countermeasure products.

Operations within the Avionics & Controls segment focus on technology interface systems for commercial and military aircraft and similar devices for land- and sea-based military vehicles, integrated cockpit systems, display technologies for avionics, training and simulation markets, secure communications systems, specialized medical equipment, and other high-end industrial and gaming applications.

 

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Page 3 of 3  Esterline Names Stephen Nolan as Chief Financial Officer

 

The Sensors & Systems segment includes operations that produce high-precision temperature and pressure sensors, specialized harsh-environment connectors, electrical power distribution equipment, and other related systems principally for aerospace and defense customers.

 

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will,” or the negative of such terms, or other comparable terminology. These forward-looking statements are only predictions based on the current intent and expectations of the management of Esterline, are not guarantees of future performance or actions, and involve risks and uncertainties that are difficult to predict and may cause Esterline’s or its industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Esterline’s actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to risks detailed in Esterline’s public filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.

 

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