8-KLeadership ChangesExhibits & Filings

ATI INC 8-K Report, Executive Changes (Dec 10, 2019)

Filed December 10, 2019For Securities:ATI

Summary

ATI Inc. (ATI) announced on December 10, 2019, the adoption of a revised form of Change in Control Severance Agreement. This new agreement aims to provide severance and other benefits to key executives, including the principal executive officer, principal financial officer, and named executive officers, under specific termination scenarios following a change in control of the company. The terms are largely similar to the previous agreement, ensuring continuity in executive retention and incentivization during potential transition periods. The revised agreement outlines severance packages based on the executive's role, with the Chief Executive Officer (CEO) eligible for 2.99 times Base Compensation and other named executive officers eligible for two times Base Compensation. These benefits are contingent upon termination without Cause or resignation for Good Reason within two years post-Change in Control. Provisions for benefit continuation, pro-rata bonuses, and outplacement services are also detailed, with a 'best net' tax provision to mitigate excise tax burdens. Executives under the prior agreement must waive their existing terms to adopt the new agreement, preventing duplicative benefits.

Key Highlights

  • 1ATI Inc. adopted a revised Change in Control Severance Agreement for its key executives.
  • 2The new agreement provides severance and benefits in cases of termination without Cause or resignation for Good Reason following a Change in Control.
  • 3CEO severance is set at 2.99 times Base Compensation, while other named executive officers receive 2 times Base Compensation.
  • 4Severance includes a pro-rata annual bonus, cash payment for benefit continuation, and outplacement services.
  • 5The agreement includes a provision to reduce payments if they trigger excise taxes, ensuring executives are better off after-tax.
  • 6Executives must waive existing agreements to adopt the new one, preventing duplicated benefits.

Frequently Asked Questions

The primary purpose is to retain and incentivize key executives by providing them with specific severance benefits and other compensation if their employment is terminated under certain conditions (without Cause or for Good Reason) following a Change in Control of ATI Inc.

The Chief Executive Officer is eligible to receive a severance payment equal to 2.99 times their Base Compensation. Other named executive officers are eligible for a severance payment equal to two times their Base Compensation.

Base Compensation is defined as the sum of the executive's highest annual rate of base salary in the prior two years and their target annual bonus for the year of the Change in Control (or, if greater, the actual bonus for the preceding year).

The agreement includes a provision that will reduce the severance payments and benefits if they would cause an executive to be subject to excise taxes under Section 4999 of the Internal Revenue Code, provided that such a reduction places the executive in a better after-tax position.