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): June 10, 2018
ADIENT PLC
(Exact name of registrant as specified in its charter)
Ireland | 001-37757 | 98-1328821 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
25-28 North Wall Quay, IFSC
Dublin 1, Ireland
(Address of principal executive offices)
Registrants telephone number, including area code: 414-220-8900
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 registrants 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 (§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 June 11, 2018, Adient plc ( Adient ) announced that its Board of Directors (the Board ) appointed Frederick A. (Fritz) Henderson interim Chief Executive Officer and John M. Barth as interim Chairman of the Board. R. Bruce McDonald, Adients former Chairman and Chief Executive Officer, resigned from the Board and will no longer serve as Chief Executive Officer or an executive officer of Adient effective June 11, 2018. Mr. McDonald will continue employment as a senior advisor to the Chief Executive Officer until Mr. McDonalds retirement on September 30, 2018.
Interim Chief Executive Officer
Mr. Henderson, 59, is currently a member of the Board and has served as such since Adient was established as a public entity on October 31, 2016. He will remain a member of the Board, but will no longer serve on the Corporate Governance Committee. There are no arrangements or understandings between Mr. Henderson and any other persons pursuant to which he was selected as Chief Executive Officer. Information with respect to Mr. Henderson required by Items 401(d) and (e) of Regulation S-K is contained in Adients Proxy Statement for its 2018 Annual General Meeting of Shareholders, filed on January 26, 2018, and is incorporated by reference into this Current Report on Form 8-K. In addition, Mr. Henderson has served as a principal of Hawksbill Group LLC (a provider of strategic counsel in public affairs, corporate communications and business operations) since May 2018. Mr. Henderson has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Reduction of Board Size
Upon Mr. McDonalds resignation from the Board, the size of the Board was reduced from eight to seven members. Mr. McDonalds resignation from the Board was not the result of any disagreement with Adient or any matter relating to Adients operations, policies or procedures.
Mr. McDonalds Retirement Agreement
In connection with his transition to senior advisor, Mr. McDonald entered into an agreement with Adient and Adient US LLC, dated June 10, 2018 (the Retirement Agreement ). Under the Retirement Agreement, Mr. McDonald will remain an employee and serve as senior advisor to Adients Chief Executive Officer until Mr. McDonalds retirement on September 30, 2018. As senior advisor, he will be paid his current base salary and continue to be eligible to participate in Adients 401(k) Plan and welfare benefits plans. He will also continue to participate in Adients perquisite allowance and car lease programs. He will not be eligible to receive a bonus for the fiscal year ended September 30, 2018.
Upon his retirement, Mr. McDonalds outstanding equity awards granted before 2017 will receive Retirement vesting treatment, and Mr. McDonalds equity awards granted in 2017 will be forfeited. He will not be entitled to any cash severance or other severance benefits upon his retirement. Mr. McDonald will be paid $250,000 for relocation expenses. He remains subject to his existing restrictive covenants and must execute a release of claims to receive the benefits under the Retirement Agreement.
The foregoing summary is qualified in its entirety by reference to the Retirement Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 7.01. | Regulation FD Disclosure. |
On June 11, 2018, Adient issued a press release (the Press Release ) announcing the leadership transition described above. The Press Release also announced a revised outlook for the year ending September 30, 2018. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
EXHIBIT INDEX | ||
Exhibit No. |
Exhibit Description |
|
10.1 | Retirement Agreement by and among R. Bruce McDonald, Adient plc and Adient US LLC, dated June 10, 2018 | |
99.1 | Press Release of Adient plc dated June 11, 2018. |
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SIGNATURE
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.
ADIENT PLC | ||||||
Date: June 11, 2018 | By: | /s/ Cathleen A. Ebacher | ||||
Name: | Cathleen A. Ebacher | |||||
Title: | Vice President, General Counsel and Secretary |
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Exhibit 10.1
June 10, 2018
Mr. R. Bruce McDonald
Re: | Retirement Agreement |
Dear Bruce:
This letter agreement ( Letter Agreement ) sets forth the understanding between R. Bruce McDonald (McDonald), Adient plc (together with its subsidiaries, the Company ) and Adient US LLC (the Employer ) regarding McDonalds retirement. Capitalized terms not otherwise defined in this Letter Agreement have the meaning set forth in the Key Executive Severance and Change of Control Agreement, dated January 17, 2017, by and among McDonald, the Company and the Employer (McDonalds Severance and Change of Control Agreement ).
1. | Retirement |
(a) Senior Advisor . McDonald will cease to be Chairman and Chief Executive Officer of the Company effective June 11, 2018 (the Transition Date ). McDonald will remain employed by the Employer as the Senior Advisor to the Chief Executive Officer, reporting to the Chief Executive Officer, from the Transition Date until September 30, 2018 when his retirement shall take effect (the Retirement Date , and the period from the Transition Date to the Retirement Date, the Advisory Period ). As Senior Advisor, McDonald will perform such duties as are reasonably assigned to him by the Chief Executive Officer from time to time. McDonald and the Company agree that, effective as of the Transition Date, he will no longer serve as an officer of the Company.
(b) Transition from Other Positions . Effective as of the Transition Date, McDonald will cease to be a member of the Companys Board of Directors and will resign from all director, officer and fiduciary positions that he holds with the Company and any of the Companys subsidiaries, affiliates, joint ventures and other related entities. On the date of execution of this Letter Agreement, McDonald will deliver an executed resignation letter to the Companys Board of Directors in the form attached as Exhibit A hereto.
2. | Compensation |
(a) Base Salary . During the Advisory Period, McDonald will continue to be paid his base salary at his current rate, and consistent with the current payment schedule.
(b) Annual Incentive Bonus . McDonald will not be eligible to receive a bonus for the fiscal year ending September 30, 2018.
(c) Equity Awards . During McDonalds continued employment through the Advisory Period, all of his outstanding restricted stock units ( RSUs ), performance share units ( PSUs ) and stock option awards will continue to vest and be earned and, for stock options, be exercisable, in accordance with their current terms. McDonald will receive no further equity awards under the Companys equity incentive plans.
(d) Pension and Welfare Benefits . During the Advisory Period, McDonald will continue to be eligible to participate in the Employers 401(k) Plan, Retirement Restoration Plan and welfare benefit plans. McDonald will participate in the Employers Savings and Investment Plan (the RIC) to the same extent as senior executives of the Company. McDonald will also continue to receive the 5% perquisite allowance and participate in the car lease program during the Advisory Period.
(e) Business Expenses . During the periods in which McDonald is employed by the Employer as Senior Advisor, the Company will reimburse any business expenses incurred by him in accordance with applicable Company policies.
(f) Treatment of Outstanding Company Equity Awards on the Retirement Date . Upon the Retirement Date, the Company equity awards granted to McDonald before 2017 will receive the Retirement treatment set forth in Exhibit B . The Company equity awards granted in 2017 will be forfeited on the Retirement Date. The amount of equity award units that will vest upon the Retirement Date pursuant to the Retirement Treatment set forth in Exhibit B will not be reduced by the Company, subject to the terms of the Companys Executive Incentive Compensation Recoupment Policy (the Clawback Policy ) that will continue to apply to McDonald. The Company agrees to reasonably cooperate in connection with any reasonable request by McDonald or Johnson Controls International plc ( JCI ) regarding the effect of McDonalds retirement from the Company in relation to his outstanding JCI equity awards. In the event of McDonalds death after the Retirement Date, the Company equity awards will be treated in accordance with the terms of the Companys 2016 Omnibus Incentive Plan.
(g) Relocation Benefits . The Employer will pay McDonald $250,000 for relocation expenses, within ten (10) days of McDonalds Retirement Date.
(h) No Severance Benefits . McDonald will not be entitled to any other severance payments or benefits. McDonald agrees that the changes to his position, duties, responsibilities, compensation, work location and other terms and conditions of employment contemplated by this Letter Agreement do not constitute Good Reason for him to resign (as set forth in his Severance and Change of Control Agreement, or any other agreement he has with the Company or Employer).
(i) Irish Tax Filings . Tax services related to filings in Ireland will be provided at the Companys expense for calendar year 2018 consistent with the Companys past practice.
3. | General Release and Waiver of Claims |
(a) General Waiver and Release . McDonalds eligibility for the equity award treatment and benefits provided in Section 2 above will be contingent on his execution (and non-revocation) of a release of claims in favor of the Company (the Release ). The form of Release is attached as Exhibit C and must be executed by McDonald (1) in connection with the execution of this Letter Agreement and (2) again upon his termination of employment, in each case within the time period specified in the Release.
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4. | Ongoing Obligations |
(a) Ongoing Obligations . McDonald agrees and acknowledges that his obligations under Article III ( Restrictive Covenants ) of his Severance and Change of Control Agreement will continue in accordance with their terms (including for the 18 - month Restricted Period after the Retirement Date to the extent set forth in such covenants). McDonald affirms that such provisions are not unduly burdensome to him and are reasonably necessary to protect the legitimate interests of the Company and the Employer.
(b) Clawback Policy . The Clawback Policy will continue to apply to McDonald.
(c) No Trading, Pledging or Hedging . During the Advisory Period, McDonald will continue to be subject to the Companys Insider Trading Policy, including the Additional Provisions for Directors and Section 16 Officers of such policy (as if he were a director or Section 16 Officer).
(d) Future Cooperation . McDonald agrees that upon the Companys reasonable request following the Advisory Period, he will use reasonable efforts to assist and cooperate with the Company in connection with the defense or prosecution of any claim that may be made against or by the Company arising out of events occurring during your employment, or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company. McDonald will be entitled to reasonable out-of-pocket expenses (including travel expenses) incurred in connection with providing such assistance, and if such assistance requires four (4) or more hours in one day, McDonald will also be entitled to reimbursement at a per-diem rate of $1,500.
(e) Whistleblower Policy . McDonald understands and agrees that nothing in this Letter Agreement limits or interferes with his right, without notice to or authorization from the Company, to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other self-regulatory organization or any other federal, state or local governmental agency or commission (each a Governmental Agency ), or to testify, assist or participate in any investigation, hearing or proceeding conducted by a Governmental Agency. In the event McDonald files a charge or complaint with a Government Agency, or a Government Agency asserts a claim on his behalf, he agrees that his release of Claims in this Letter Agreement will nevertheless bar his right (if any) to any monetary or other recovery (including reinstatement), except that he does not waive: (1) his right to receive an award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934 and (2) any other right where waiver is expressly prohibited by law.
5. | Other Terms |
(a) Tax Withholding . The Company may withhold from any amounts payable to McDonald under this Letter Agreement any federal, state, local or foreign taxes that are required to be withheld pursuant to applicable law or regulation.
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(b) No Representations and Non-Admission . McDonald acknowledges that he has not relied on any representations or statements in determining to execute this Letter Agreement. Nothing contained in this Letter Agreement will be deemed or construed as an admission of wrongdoing or liability by McDonald or on the part of the Company or its present or past affiliates, officers, directors, executives or agents.
(c) Entire Understanding . This Letter Agreement sets forth the entire agreement between McDonald, the Company and the Employer regarding his transition to Senior Advisor and his ultimate retirement, and supersedes any other agreements, including, but not limited to, his Severance and Change of Control Agreement and all applicable equity award agreements, between McDonald and the Company except as set forth herein.
(d) Dispute Resolution; Governing Law . This Letter Agreement will be construed and enforced according to the internal laws of the State of Michigan, without reference to the choice of law provisions thereof. McDonald irrevocably and unconditionally (a) agrees that any suit, action or other legal proceeding arising under this Letter Agreement may be brought in the United States District Court for the Eastern District of Michigan, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Michigan, (b) consent to be subject to the nonexclusive personal jurisdiction of any such court in any such suit, action or proceeding, and (c) waive any objection which you may have to the laying of venue of any such suit, action or proceeding in any such court. The Employer is a Michigan limited liability company. The responsibilities of McDonalds employment have substantial relation to the Employers business in Michigan.
(e) Severability; Counterparts . The invalidity or unenforceability of any provision of this Letter Agreement will not affect the validity or enforceability of any other provision. If any provision of this Letter Agreement is held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Letter Agreement, will remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. This Letter Agreement may be executed in several counterparts, each of which will be deemed an original, and such counterparts will constitute one and the same instrument.
(f) Section 409A of the Code . It is the parties intent that the payments and benefits provided under this Letter Agreement be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (the Code ), and this Letter Agreement will be interpreted accordingly. In this regard each payment under this Letter Agreement will be treated as a separate payment for purposes of Section 409A of the Code. If and to the extent that any payment or benefit is determined by the Company (1) to constitute non-qualified deferred compensation subject to Section 409A of the Code and (2) such payment or benefit must be delayed for six months following your separation from service in order to comply with Section 409A(a)(2)(B)(i) of the Code and not cause you to incur any additional tax under Section 409A of the Code, then the Company will delay making any such payment or providing such benefit until the expiration of such six-month period (or, if earlier, your death or a change in control event as such term is defined in Section 1.409A-3(i)(5) of the Code). All reimbursements and in-kind benefits provided under this Letter Agreement will be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year (except that a plan providing health benefits
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may impose a generally applicable limit on the amount that may be reimbursed or paid); (ii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit; and (iii) any reimbursement of an expense must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred.
[ Remainder of Page Left Intentionally Blank ]
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To indicate agreement with the foregoing, please sign and return this Letter Agreement to me.
On behalf of the Company and the Employer: | ||
By: |
/s/ Cathleen A. Ebacher |
|
Name: Cathleen A. Ebacher | ||
Title: Vice President, General Counsel & | ||
Secretary |
Accepted and Agreed: | ||
/s/ R. Bruce McDonald |
||
Name: | R. Bruce McDonald | |
Date: | June 10, 2018 |
[ Signature Page to Letter Agreement ]
Exhibit A
Board of Directors Resignation Letter
I, R. Bruce McDonald, hereby resign as Chairman and a member of the Board of Directors of Adient plc and as a member of the Board of Directors of any of Adient plcs subsidiaries, affiliates, joint ventures and other related entities, effective June 11, 2018.
Accepted and Agreed: |
|
Name: R. Bruce McDonald |
Date: June 10, 2018 |
Exhibit BRetirement Treatment of Outstanding Company Equity Awards on the Retirement Date
Award | Grant Date |
Stock Plan
Granted
(Adient or JCI) |
Account Status as of June 10, 2018 |
Estimated Units That
(based on continued
|
Qualifies for
|
Treatment Upon Retirement Date |
||||||||||
Units
Awarded 1 |
Units
Previously Vested |
Unvested
Units |
||||||||||||||
RSUs | 2017-10-02 | Adient | 49,594.1661 | 0.0 | 49,594.1661 | 0 | Nonot age 60 | Forfeit all unvested | ||||||||
RSUs | 2016-11-07 | Adient | 96,908.4555 | 31,703.0 | 65,205.4555 | 51,635 | Yesage 55 + 10 years | Vest pro-rata immediately; unvested portion forfeited | ||||||||
RSUs | 2016-10-31 | Adient | 178,769.6012 | 58,483.0 | 120,286.6012 | 96,205 | Yesage 55 + 10 years | Vest pro-rata immediately; unvested portion forfeited | ||||||||
RSUs | 2016-09-08 | JCI | 215.4928 | 0.0 | 215.4928 | 215 | Yesage 55 + 5 years | Accelerate & vest 100% | ||||||||
RSUs | 2016-09-08 | JCI | 10,562.2108 | 0.0 | 10,562.2108 | 10,562 | Yesage 55 + 5 years | Accelerate & vest 100% | ||||||||
RSUs | 2015-10-07 | JCI | 9,878.1099 | 0.0 | 9,878.1099 | 9,815 | Yesage 55 + 10 years | Vest pro-rata and settle on normal schedule; unvested portion forfeited | ||||||||
RSUs | 2015-10-07 | JCI | 3,292.0033 | 0.0 | 3,292.0032 | 3,292 | Yesage 55 + 10 years | Continue to vest 100% | ||||||||
RSUs | 2013-09-24 | JCI | 6,560.9727 | 0.0 | 6,560.9727 | 6,561 | Yesage 55 + 10 years | Continue to vest 100% | ||||||||
PSUs 2 | 2017-10-02 | Adient | 74,391.2491 | 0.0 | 74,391.2491 | 0 | Nonot age 60 | Forfeit all | ||||||||
PSUs 2 | 2016-11-07 | Adient | 97,320.0175 | 0.0 | 97,320.0175 | 64,791 | Yesage 55 + 10 years | Pro-rate and continue to vest based on actual performance; unvested portion forfeited | ||||||||
Non- Qualified Stock Options |
2015-10-07 | JCI | 10,197.0000 | 5,099.0 | 5,098.0000 | 5,098 | Yesage 55 + 10 years | Accelerate & vest 100% |
1 | Includes reinvested dividends to date. |
2 | PSU values shown at target; actual performance factor will be applied at vesting, and vesting period relates to fiscal year not grant date. |
3 | Actual amounts that will vest will include any dividends reinvested in award. |
Exhibit C
Form of General Release of Claims
NOTICE: YOU HAVE TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE DECIDING WHETHER TO EXECUTE IT. IN CONNECTION WITH YOUR CONSIDERATION OF THE RELEASE, ADIENT PLC AND ADIENT US LLC HEREBY ADVISE YOU TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THE RELEASE. |
GENERAL RELEASE OF CLAIMS
In consideration of [ upon executing Letter Agreement the opportunity to receive][ upon Retirement Date receiving] the equity award treatment and benefits set forth in Section 2 and Exhibit B of the attached Letter Agreement, dated June 10, 2018, between you Adient plc and Adient US LLC, (the Letter Agreement ), I do hereby release and forever discharge the Released Parties (defined below) from any and all claims, contracts, judgments and expenses (including attorneys fees and costs of any kind), whether known or unknown, which I have or may have against the Released Parties, or any of them, arising out of or based on any transaction, occurrence, matter, event, cause or thing whatsoever which has occurred prior to or on the date I execute this Release , including, but not limited to, my decision and agreement to resign from Adient plc pursuant to the Letter Agreement. Released Parties includes Adient plc and all Affiliated Entities (defined below), their predecessors and successors (including, but not limited to, Johnson Controls International plc, Johnson Controls, Inc. and all of their affiliated entities), and all of Adient plcs and the other foregoing entities past and present and future officers, directors, agents, employees, shareholders, members, managers, partners, joint ventures, attorneys, executors, employee benefit plans, insurers, assigns and other representatives of any kind. This Release includes, but is not limited to: (i) claims arising under the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act of 1990, the Civil Rights Act of 1991, the Worker Adjustment and Retraining Notification Act, the National Labor Relations Act, the Occupational Safety and Health Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act of 1993, state family and/or medical leave laws, state fair employment laws, state and federal wage and hour laws, wage payment laws, any amendments to the foregoing laws, and/or any other law (including without limitation federal, state, local or foreign law, statute, common law, code, ordinance, rule or regulation); (ii) claims based on breach of contract (express or implied), tort, personal injury, misrepresentation, discrimination, failure to accommodate, retaliation, harassment, defamation, invasion of privacy or wrongful discharge; (iii) claims for bonuses, payments or benefits under any of Adient plcs or any Affiliated Entitys bonus, severance or incentive plans or fringe benefit programs or policies, except as specifically identified in the Letter Agreement; (iv) claims arising under the Key Executive Severance and Change of Control Agreement I executed on January 17, 2017, by and among you, Adient plc and Adient US LLC; (v) any other claims arising out of or connected with my employment with Adient plc or any Affiliated Entity [ upon executing Letter Agreement prior to or on the date I execute this Release] ; and (vi) claims arising out of my
removal as an officer or director from any Affiliated Entity. This Release does not include a waiver of any claim that cannot legally be waived. Nothing in this Release (x) waives a claim for benefits vested as of the date I execute this Release or vested as of the Retirement Date under an incentive or retirement plan of Adient or any Affiliated Entity or (y) waives a claim for or prevents me from accepting a whistleblower award for information provided to the U.S. Securities and Exchange Commission. Affiliated Entities means all entities related to or affiliated with Adient plc, including by not limited to parent, sister or subsidiary entities (of any tier) and joint ventures (individually each an Affiliated Entity).
I have read this Release and I understand its legal and binding effect. I enter into this Release voluntarily.
I understand that for a period of seven (7) days following the execution of this Release, I may revoke this release, and that the release will not become effective or enforceable until this seven (7) day revocation period has expired. To be effective, any notice of revocation must be in writing and received by Neil Marchuk, Chief Human Resources Officer, Adient US LLC, 49200 Halyard Drive, Plymouth, Michigan 48170, within the seven (7) day revocation period (or, if the seventh day of the revocation period is not a business day, on the first business day following such date).
Date |
R. Bruce McDonald |
CONTACT
Media:
Mary Kay Dodero
+1 734 254 7704
Mary.Kay.Dodero@adient.com
Investors:
Mark Oswald
+1 734.254.3372
Mark.A.Oswald@adient.com
Exhibit 99.1
Adient Announces Leadership Transition Plan
| Frederick A. (Fritz) Henderson Appointed Interim Chief Executive Officer of Adient |
| John M. Barth Appointed Interim Chairman of Adients Board of Directors |
| R. Bruce McDonald to Retire as Chairman and Chief Executive Officer |
PLYMOUTH, Mich., June 11, 2018 Adient plc (NYSE: ADNT), a global leader in automotive seating, today announced its Board of Directors has appointed
Frederick A. Henderson interim Chief Executive Officer and John M. Barth, Adients current Lead Director, interim Chairman of Adients Board.
Henderson was most recently chief executive officer of SunCoke and, prior to that, served as president and chief executive officer of General Motors. He has 26 years of automotive experience including direct involvement in China and Asia Pacific and 20 years of general management and operating experience, eight of which were as a CEO. He has served on the Adient Board since the company was established as a public entity in 2016. Henderson will remain a Board member but will relinquish his position on the governance committee.
Henderson succeeds R. Bruce McDonald, who is stepping down from his role as Chairman and CEO effective immediately, and will remain as an advisor to the CEO until September 30, 2018.
The Adient Board of Directors has commenced a comprehensive search process to identify a new CEO. That process will be coordinated on behalf of the Board by directors Barb J. Samardzich, Peter H. Carlin and Raymond L. Conner.
Bruce McDonald made significant contributions during the formation of Adient plc to ensure a successful spin-off, said Barth. Bruce and the Board agree that now is the right time for a new leader with a fresh perspective to drive value in the next phase of
Adient / Page 2 |
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Adients life as a public company. Fritz brings the right leadership skills and operational experience to step in and immediately accelerate our transformation, providing the time to conduct an expeditious and thoughtful search for a new CEO.
Henderson said, While our market position remains strong and our China joint ventures continue to perform at high levels, we recognize that we are not executing at the levels we are capable of in our consolidated Seat Structures and Mechanisms and Seating segments, and that shortfall has been reflected in our financial results and valuation. My immediate focus is on better operational execution to drive meaningful improvements in profitability and free cash flow. We know what needs to be done and we will be approaching the work ahead of us with urgency.
McDonald has served as the companys Chairman and CEO since its separation from Johnson Controls in 2016.
Revised Outlook for Full Year 2018
Today, Adient also announced that it is revising its outlook for the full fiscal year 2018. Despite an anticipated increase in FY2018 revenue to approximately $17.5B, operating performance is running behind plan and thus the companys outlook for Adjusted EBITDA is now expected to be approximately $1,250M. Continued challenges impacting the Seat Structures & Mechanisms segment drove approximately half of the shortfall versus previous expectations while weakness in the companys Seating segment and Interiors drove the remainder. The primary drivers impacting Seating related to lower than expected operational conversion, primarily in North America, and to a lesser extent, economics and the negative impact of foreign exchange. As a result of the lower earnings, increased cash restructuring, and a negative working capital trend, free cash flow for the fiscal year is expected to be approximately $0 to $(100)M. Further details of Adients revised FY2018 outlook will be provided during the companys fiscal Q3 earnings call.
Adient / Page 3 |
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About Adient:
Adient is a global leader in automotive seating. With 85,000 employees operating 238 manufacturing/assembly plants in 34 countries worldwide, we produce and deliver automotive seating for all vehicle classes and all major OEMs. From complete seating systems to individual components, our expertise spans every step of the automotive seat making process. Our integrated, in-house skills allow us to take our products from research and design all the way to engineering and manufacturing and into more than 25 million vehicles every year. For more information on Adient, please visit adient.com.
Cautionary Statement Regarding Forward-Looking Statements:
Adient plc has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding Adients future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words such as may, will, expect, intend, estimate, anticipate, believe, should, forecast, project or plan or terms of similar meaning are also generally intended to identify forward-looking statements. Adient cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Adients control, that could cause Adients actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the impact of tax reform legislation through the Tax Cuts and Jobs Act, uncertainties in U.S. administrative policy regarding trade agreements and international trade relations, the ability of Adient to meet debt service requirements, the ability and terms of financing, general economic and business conditions, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, the ability of Adient to effectively integrate the Futuris business, and cancellation of or changes to commercial arrangements. A detailed discussion of risks related to Adients business is included in the section entitled Risk Factors in Adients Annual Report on Form 10-K for the fiscal year ended September 30, 2017 filed with the SEC on November 22, 2017 and quarterly reports on Form 10-Q filed with the SEC, available at www.sec.gov . Potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Adient assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document.
In addition, this document includes certain projections provided by Adient with respect to the anticipated future performance of Adients businesses. Such projections reflect various assumptions of Adients management concerning the future performance of Adients businesses, which may or may not prove to be correct. The actual results may vary from the anticipated results and such variations may be material. Adient does not undertake any obligation to update the projections to reflect events or circumstances or changes in expectations after the date of this document or to reflect the occurrence of subsequent events. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the projections based thereon.
Adient / Page 4 |
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