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):
January 31, 2018
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BABCOCK & WILCOX ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
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DELAWARE
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001-36876
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47-2783641
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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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13024 BALLANTYNE CORPORATE PLACE, SUITE 700
CHARLOTTE, NORTH CAROLINA
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28277
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s Telephone Number, including Area Code:
(704) 625-4900
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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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
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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.
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On January 31, 2018, the Board of Directors (the "Board") of Babcock & Wilcox Enterprises, Inc. (the “Company”) appointed Leslie C. Kass as President and Chief Executive Officer of the Company, effective immediately. E. James (Jim) Ferland will assist with the transition and serve as Executive Chairman of the Board until June 30, 2018, after which he is expected to step down from the Board. Ms. Kass has also been elected to the Company’s Board of Directors, effective immediately. The Company currently anticipates that the roles of Chairman and Chief Executive Officer will continue to be separated, although the Board may review the matter from time to time based on then-current circumstances.
Ms. Kass, age 47, has served as Senior Vice President, Industrial of the Company since May 2017. She previously served in a variety of roles at the Company or its predecessor, including Vice President of Retrofits and Continuous Emissions Monitoring for the Company’s Power segment from August 2016 to May 2017, Vice President, Investor Relations & Communications from June 2015 to August 2016, and Vice President of Regulatory Affairs from January 2013 to June 2015. Before joining the Company, Ms. Kass held a number of engineering and project management-related positions of increasing responsibility with Westinghouse Electric Company, Entergy Corporation and Duke Energy Corporation.
In connection with Ms. Kass’ appointment, the Company will pay her a base salary of $750,000 per year, with a target annual bonus of 100% of base salary, subject to certain performance criteria to be established by the Compensation Committee of the Board. Ms. Kass will also receive equity awards with an aggregate grant date value of $1,500,000 when the Company makes its annual equity grants to executive officers in February 2018. The Company has previously entered into a change in control agreement with Ms. Kass; such agreement will be amended to increase the multiplier from 2 to 2.99 times the sum of her annual salary plus her target bonus. Ms. Kass will continue to participate in the Company’s employee benefit plans made available to the other executive officers.
Mr. Ferland's employment agreement with the Company, which expires by its terms on June 30, 2018, has been amended to reflect his new role as Executive Chairman and to reduce the amount of his annual equity grant from $4,200,000 to $450,000. Mr. Ferland's equity award will vest in full on June 30, 2018.
Additionally, to ensure a smooth transition process, the Board has created a new committee that will work closely with management to oversee the continued implementation of key initiatives launched last year that are intended to achieve an optimal business mix, cost structure and capital structure. Members of this committee will initially consist of Mr. Ferland, Ms. Kass, Stephen G. Hanks, Brian E. Kahn and Brian K. Ferraioli.
Item 9.01 Financial Statements and Exhibits
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(d)
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Exhibits
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Exhibit No.
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Description
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Kass Offer Letter dated as of January 31, 2018
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Ferland Supplement to Employment Agreement dated as of January 31, 2018
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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.
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BABCOCK & WILCOX ENTERPRISES, INC.
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February 1, 2018
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By:
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/s/ J. André Hall
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J. André Hall
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Senior Vice President, General Counsel and Corporate Secretary
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January 31, 2018
Exhibit 10.1
Leslie C. Kass
44 Blackberry Dr.
Hudson, OH 44236
Dear Leslie:
The purpose of this letter is to formally offer you the position of President and Chief Executive Officer of Babcock & Wilcox Enterprises, Inc. (the “Company”), effective January 31, 2018 (the “Effective Date”). The position reports to the Board of Directors of the Company (the “Board”) and is located in Barberton, Ohio.
The details of this offer of employment are as follows:
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1.
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Your annualized base salary will be $750,000, or $62,500 per month (paid one-half on the 15
th
and other half at the end of the month).
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2.
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You will continue to be eligible for participation in the Executive Incentive Compensation Plan at a target award of 100% of your base earnings. The change in your target percentage for 2018 to 100% will be effective on the Effective Date.
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3.
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You also will continue to be eligible to receive equity grants under our long-term incentive program. Your 2018 grant will be made during our annual grant cycle (typically during the first quarter of a year) and will be valued at $1,500,000. The equity grant will consist a mix of award types (e.g., restricted stock units, performance units, stock options, etc.) and on such terms and conditions as determined by the Compensation Committee of the Board.
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In future years, you will be eligible to receive grants of equity during the annual grant cycle subject to market data and individual performance. All long term incentive awards are subject to approval by the Compensation Committee of the Board.
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You will be considered for future merit/promotional salary increases based on your performance, relevant market data and practices established by the Compensation Committee of the Board.
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5.
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You will receive 160 hours of vacation per calendar year.
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You will continue to be eligible to participate in Company benefits as detailed in the individual plan documents, including The Babcock & Wilcox Company Thrift Plan, Defined
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Contribution Restoration Plan, Supplemental Employee Retirement Plan, Executive Severance Plan and all health and welfare benefit plans provided to our employees. You will also continue to participate in the Company sponsored financial planning services as currently provided by Ayco.
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7.
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You are currently a party to a Change-in-Control Agreement, which will be replaced with the Company’s standard Change-in-Control Agreement providing a 2.99 severance multiple.
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8.
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Your will continue to be subject to the Company’s stock ownership guidelines requiring executives to acquire and hold a minimum number of shares of B&W common stock within five years. As a result of your position, you will be subject to a 5x multiple under those guidelines.
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If you wish to accept our offer, please acknowledge your acceptance of this employment offer by signing and dating the original copy of this letter at the space provided below and scan the signed document back to Ben Bash, Senior Vice President, Human Resources at
bhbash@babcock.com
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I very much look forward to your acceptance of our offer.
Best regards,
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/s/ E. James Ferland
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January 31, 2018
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E. James Ferland
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Date
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Chairman of the Board of Directors
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I understand and accept the terms of the employment offer as set forth above.
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/s/ Leslie C. Kass
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January 31, 2018
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Leslie C. Kass
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Date
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SUPPLEMENT TO EMPLOYMENT AGREEMENT
THIS SUPPLEMENT TO EMPLOYMENT AGREEMENT (“Supplement”) is made as of this 31st day of January, 2018 by and between Babcock & Wilcox Enterprises, Inc. (“
B&W
”), a Delaware corporation having its principal office at 13024 Ballantyne Corporate Place, Suite 700, Charlotte, North Carolina 28277, and E. James Ferland (the “
Executive
” and together with the B&W, the “
Parties
”)
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WHEREAS, B&W (f/k/a Babcock & Wilcox Power Generation Group, Inc. and as successor to BWX Technologies, Inc. f/k/a The Babcock & Wilcox Company) and the Executive are parties to that certain Employment Agreement dated as of November 5, 2014 (the “
Employment Agreement
”); and
WHEREAS, under the Employment Agreement, BWE agreed to employ Executive and Executive agreed to serve as BWE’s CEO for a one-year period beginning June 30, 2015, which automatically continues for successive one-year periods unless, among other reasons, either party notifies the other party of its election not to renew Executive’s employment thereunder; and
WHEREAS, Executive’s current term under the Employment Agreement expires June 30, 2018; and
WHEREAS, B&W and Executive are in mutual agreement not to renew the Employment Agreement for a subsequent term and to allow the Employment Agreement to expire June 30, 2018 in accordance with its terms; and
WHEREAS, to facilitate an orderly transition, the Parties agree on the appointment of a successor President and Chief Executive Officer effective January 30, 2018 (the “
Effective Date
”); and
WHEREAS, the Parties desire to continue the Employment Agreement through June 30, 2018, subject to the terms and conditions of this Supplement, to provide for a period of transition.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
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1.
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Non-Renewal of Employment Agreement
. In accordance with Section 1(b) of the Employment Agreement, the Parties agree that the Employment Agreement will not renew for a subsequent term and will terminate June 30, 2018.
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2.
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Position and Duties
. Beginning on the Effective Date and for the remainder of the Employment Period, Executive shall remain an employee and shall serve and continue to serve , if and when re-elected, as a member and Executive Chairman of the Board.
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(a)
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Equity Awards
. For Fiscal Year 2018, Executive shall receive reduced equity-based incentive compensation awards valued in the aggregate at $450,000 in connection with B&W’s annual grant cycle. These awards shall vest 100% rather than on a pro-rata basis under Section 4(a)(v)(B) of the Employment Agreement. Otherwise these awards shall be subject to the settlement conditions of such Section.
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(b)
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Except as stated in Section 3(a) above, there are no changes for the remainder of the Employment Period under Section 2(b) of the Employment Agreement.
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(a)
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Neither this Supplement nor any action taken to carry-out the terms hereof shall constitute Good Reason or Cause under the Employment Agreement.
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(b)
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Except as expressly modified by this Supplement, the Employment Agreement shall remain in full force and effect.
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(c)
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Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to such terms in the Employment Agreement.
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(d)
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This Supplement may be executed in two or more counterparts, each of which will be deemed an original but all of which together shall be considered one and the same agreement.
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(e)
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For the avoidance of doubt, the Restructuring Transaction Retention Agreement by and between BWE and Executive dated as of November 5, 2014, that provides, among other things, for the payment of a cash retention award to Executive on June 30, 2018, shall remain in full force and effect.
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IN WITNESS WHEREOF, this Supplement has been duly executed by the Parties as of the date first indicated above.
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BABCOCK & WILCOX ENTERPRISES, INC.
/s/ Stephen G. Hanks
_________________________________
By: Stephen G. Hanks
Title: Director
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EXECUTIVE
/s/ E. James Ferland
_________________________________
E. James Ferland
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