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): April 29, 2020

____________________

 

Insteel Industries Inc.

(Exact name of registrant as specified in its charter)

 

 

North Carolina

(State or other jurisdiction of

incorporation or organization)

1-9929

(Commission File Number)

56-0674867

(I.R.S. Employer Identification No.)

 

1373 Boggs Drive Mount Airy, North Carolina

(Address of principal executive offices)

27030

(Zip code)

 

(336) 786-2141

(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 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))

 

Securities registered subject to Section 12(b) of the Exchange Act:

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock (No Par Value)

IIIN

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

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 April 29, 2020, the Board of Directors of Insteel Industries, Inc. (the “Company”) elected Mark A. Carano Vice President, Chief Financial Officer and Treasurer of the Company, effective upon his commencement of employment with the Company on May 18, 2020. Mr. Carano, age 50, will be succeeding Michael C. Gazmarian in this role, and Mr. Gazmarian will be continuing with the Company through July 31, 2020 to assist with the leadership transition.   

 

Mr. Carano joins the Company from Big River Steel, where he served as Chief Financial Officer beginning in April 2019. Prior to Big River, he served in senior management roles with Babcock & Wilcox Enterprises from June 2013 to October 2018, including Senior Vice President, Finance and Controller of their Industrial Segment, Senior Vice President, Corporate Development and Strategy, and Corporate Treasurer. Mr. Carano also has 14 years of investment banking experience serving as a Managing Director with Bank of America Merrill Lynch, and in various roles of increasing responsibility with Deutsche Bank and First Union Securities. He earned an BA from Vanderbilt University and an MBA from Northwestern University’s Kellogg Business School.

 

Mr. Carano has entered into an employment offer letter with the Company (the “Offer Letter”). Pursuant to the Offer Letter, Mr. Carano will receive the following compensation:

 

Salary: Mr. Carano’s annual base salary will be $345,000.

 

Annual Bonus Opportunity: Mr. Carano will participate in the Company’s Return on Capital Incentive Compensation Plan. His annual target bonus will be 60% of his base salary. Any bonus for the Company’s fiscal year 2020 will be based on Mr. Carano’s base salary paid by the Company during the year.

 

Equity Compensation: Mr. Carano will receive equity awards in August 2020, having a grant-date value of $125,000, with 50% of the value to consist of restricted stock units and 50% stock options. The target value of equity awards to Mr. Carano for subsequent Company fiscal years will be $250,000. Equity awards to Mr. Carano will be granted pursuant to the Company’s 2015 Equity Incentive Plan.

 

Lump-sum payments: Mr. Carano will receive a lump sum payment of $27,500 in the first full pay period following commencement of his employment, and a second lump sum payment of $27,500 in the first full pay period following six months of employment.

 

Retirement Security Agreement:   Mr. Carano will execute the Company’s standard Retirement Security Agreement (“RSA”). Under the RSA, if Mr. Carano is employed by the Company for 30 years, he will receive, for 15 years following retirement, annual payments equal to 50% of his average base pay for the five years preceding retirement. If Mr. Carano works for the Company for at least 10 years, his payments under the RSA will be reduced by 1/360th for each month short of 360 months during which he is employed by the Company.

 

Change in Control Severance Agreement: Mr. Carano will execute the Company’s standard Change in Control Severance Agreement (“CIC Agreement”). Under the CIC Agreement, if Mr. Carano’s employment is terminated within two years following a change in control of the Company, he will receive payments equal to one times his base salary and one times his average bonus for the prior three years, plus continuation of health and welfare benefits for one year.

 

A copy of the Offer Letter is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference. A copy of the press release announcing the election of Mr. Carano as Vice President, Chief Financial Officer and Treasurer is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01.  Financial Statements and Exhibits

 

(d)           Exhibits

 

Exhibit 10.1 Offer Letter to Mark A. Carano 

Exhibit 99.1

Press release dated May 4, 2020 announcing the appointment of Mark A. Carano as Chief Financial Officer.

 

 
 

 

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 thereunto duly authorized.

 

 

 

     

INSTEEL INDUSTRIES INC.

Registrant

       
       
       

Date: May 4, 2020

 

By:

/s/ James F. Petelle

     

     James F. Petelle

     

     Vice President – Administration and Secretary

 

 

 

 

April 23, 2020 (v.3)

Exhibit 10.1

 

Mr. Mark A. Carano

2601 Beretania Circle

Charlotte, NC 28211

 

Dear Mark:

 

Insteel is pleased to extend this offer of employment to you to serve as Vice President, Chief Financial Officer and Treasurer of Insteel Industries, Inc. This letter will serve as written confirmation of the details of the employment offer.

 

For your consideration, the following is an overview of your compensation and a brief description of benefits currently offered by Insteel Industries, Inc.

 

 

●

Starting Date: May 18, 2020. You will report to me.

 

●

Starting salary: $13,269.24 paid bi-weekly.

 

●

You will be provided lump sum payments totaling $55,000 to be delivered at the following intervals: $27,500 in the first full pay period after your start date; and, $27,500 in the first full pay period following six (6) months of employment with Insteel.

 

●

You will be eligible to participate in our Return on Capital Incentive Plan with a target of 60% of your base pay. The payout maximum is 200% of the 60% target. Therefore, the actual incentive pay can be from 0% - 120% of base pay based on Company performance during the fiscal year. Any incentive pay for Fiscal Year 2020 would be prorated for time worked during the fiscal year. Participants in the Plan must be actively employed by Insteel at the time the bonus is paid to be eligible.

 

●

You will be eligible to participate in certain executive benefits, including: Supplemental Executive Retirement Plan (SERP), Split Dollar Life Insurance, Change in Control Agreement, and the Equity Incentive Plan. The initial Equity Incentive Plan (EIP) award will be approved at the August 2020 Insteel Board of Directors Meeting and will be fifty percent (50%) of the EIP annual target value of $250,000. Half of the award value will be delivered in Restricted Stock Units and the remaining half of the award will be delivered in Incentive Stock Options (ISO’s) or Non-Qualified Stock Options (NQSO’s). These plans are subject to change or cancellation by the Board of Directors at any time.

 

●

After completion of a ninety-day period you will be eligible for the following benefits:

  Medical Insurance Dental Insurance  Life Insurance
  Flexible Benefits Vision Insurance 401(k) Retirement Savings Plan
 

●

If you incur COBRA costs to continue your present medical coverage, the Company will reimburse the cost of COBRA continuation up until the time you are eligible for the Company plans.

 

●

As this position is in our Home Office of Mt. Airy, NC, relocation assistance is offered. You will be provided with a temporary living allowance of $20,000 to bridge the time period until you relocate your household within a commuting distance of Mount Airy, NC. Please contact Steve Burgess, Vice President of Human Resources at (336) 786-2141 extension 3025 to discuss relocation details.

 

 

1373 BOGGS DRIVE / MOUNT AIRY, NORTH CAROLINA 27030 / 336-786-2141/ FAX 336-786-2144

 

 
 

 

Mark A. Carano
April 23, 2020

 

 

●

The guideline for vacation for your role is generally 15 days of vacation per calendar year. Vacation may not be carried over from one year to another.

 

●

You will be eligible for Company paid Short-term Disability, and Long-term Disability benefits after one year of service.

 

Please note: The pre-employment contingencies for the drug and background check are removed from this letter as a result of the clean drug test and background check results received by Insteel on April 23, 2020. There are no pre-employment contingencies in the offer.

 

Insteel requires new employees to execute the documents listed below. We can discuss any questions that may arise following your review.

 

 

●

Drug and Alcohol Guidelines (Substance Abuse Policy)

 

●

Background Checks Policy and Authorization Form

 

●

Application Form

 

●

Confidentiality Agreement (Please note witness signature block.)

 

●

Code of Conduct

 

●

Insider Trading Policy

 

●

E-mail Policy

 

●

Computer Software Policy

 

●

Internet Agreement

 

●

Two copies of the Confirmation Letter (please retain one original for your records)

 

Insteel’s most recent Annual Report, Insteel Benefits Guide and an I-9 Information form are enclosed for your information.

 

While we believe our relationship will be mutually beneficial, please understand that we are not offering employment of a fixed term and you should not construe this letter, our offer of employment, or our previous meetings as intent by Insteel to enter into a contractual employment arrangement with you.

 

Should you have any questions as you consider your future employment with Insteel, please call me. I sincerely look forward to you joining our company.

 

Sincerely,

 

/s/ H. O. Woltz III

 

H.O. Woltz III

Chairman, President, and Chief Executive Officer

 

Signature page follows

 

2
 

 

Mark A. Carano
April 23, 2020

 

 

I have read and understand the contents of this letter.

 

 

/s/ Mark A Carano                                            Signature

Mark A. Carano

 

 

April 29, 2020                                                      Date

 

3

 

 

 
Exhibit 99.1

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE

Contact:

H.O. Woltz III

   

President and CEO

Insteel Industries, Inc.

(336) 786-2141, Ext. 3041

 

INSTEEL INDUSTRIES APPOINTS MARK A. CARANO AS CHIEF FINANCIAL OFFICER

 

MOUNT AIRY, N.C., May 4, 2020 – Insteel Industries, Inc. (NasdaqGS: IIIN) today announced the appointment of Mark A. Carano as Vice President, Chief Financial Officer and Treasurer effective May 18, 2020. Mr. Carano will be succeeding Michael C. Gazmarian, who will be continuing with the Company through July 31, 2020 to assist with the leadership transition.

 

Mr. Carano joins Insteel from Big River Steel, where he served as Chief Financial Officer. Prior to Big River, he served in senior management roles with Babcock & Wilcox Enterprises, including Senior Vice President, Finance and Controller of their Industrial Segment, Senior Vice President, Corporate Development and Strategy, and Corporate Treasurer. Mr. Carano also has 14 years of investment banking experience serving as a Managing Director with Bank of America Merrill Lynch, and in various roles of increasing responsibility with Deutsche Bank and First Union Securities. He earned an BA from Vanderbilt University and an MBA from Northwestern University’s Kellogg Business School.

 

“It is a pleasure to welcome Mark to the Insteel team,” said H.O. Woltz III, Insteel’s President and CEO. “His broad financial background and strong leadership skills will be a valuable addition and we look forward to his future contributions as we proceed with the execution of our strategic growth plans.”

 

About Insteel

 

Insteel is the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. Insteel manufactures and markets prestressed concrete strand and welded wire reinforcement, including engineered structural mesh, concrete pipe reinforcement and standard welded wire reinforcement. Insteel’s products are sold primarily to manufacturers of concrete products that are used in nonresidential construction. Headquartered in Mount Airy, North Carolina, Insteel operates ten manufacturing facilities located in the United States.

 

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1373 BOGGS DRIVE, MOUNT AIRY, NC 27030/PHONE: (336) 786-2141/FAX: (336) 786-2144
WWW.INSTEEL.COM