01—Abstract
Summary
Summary of the 8-K filed August 2, 2016. Cited figures are marked; the original filing is the authoritative source.
This Form 8-K filing from II-VI Incorporated (COHR) announces a significant leadership transition.
Effective September 1, 2016, Francis J. Kramer will retire as Chief Executive Officer but will continue to serve as Chairman of the Board in a non-executive capacity. Dr. Vincent D.
Mattera, Jr., currently President, has been appointed as the new CEO. Dr. Mattera has a long tenure with the company, having been with II-VI since 2004 and serving in various executive roles, including President and COO. The filing also details the material changes to Dr. Mattera's employment agreement in conjunction with his new role.
Key aspects include a three-year initial term with automatic renewals, a defined compensation structure comprising base salary, annual incentives, and long-term equity awards totaling a target of $3,698,000a for Fiscal Year 2017, and a significant performance-based equity award. The agreement also outlines severance packages for termination without cause or for good reason, including enhanced provisions in the event of a change in control.
02—Key points
Key Highlights
- Francis J. Kramer will retire as CEO on September 1, 2016, but will remain Chairman of the Board (non-executive).
- Dr. Vincent D. Mattera, Jr. is appointed as the new CEO, effective September 1, 2016.
- Dr. Mattera has extensive experience with II-VI, having been with the company since 2004 and previously holding roles such as President and COO.
- Dr. Mattera's new employment agreement has an initial term of three years with automatic annual renewals.
- Target total direct compensation for FY2017 for Dr. Mattera is $3,698,000, including base salary, annual incentives, and long-term equity.
- A one-time performance share award valued at $2,000,000 has been granted to Dr. Mattera, tied to FY2019 revenue and relative total stockholder return.
- Severance benefits are provided for termination without cause or for good reason, with enhanced provisions during a change-in-control period.
03—Questions
Frequently Asked Questions
What is the main purpose of this 8-K filing?
This 8-K filing primarily announces a CEO transition. Francis J. Kramer is retiring as CEO, and Dr. Vincent D. Mattera, Jr. is succeeding him. The filing also details the terms of Dr. Mattera's new employment agreement.
Will Francis J. Kramer be completely leaving the company?
No, Francis J. Kramer will retire as CEO but will continue to serve as the Chairman of the Board of Directors in a non-executive, non-employee capacity.
What is the total compensation package for the new CEO, Dr. Mattera?
For Fiscal Year 2017, Dr. Mattera's target total direct compensation is $3,698,000. This is comprised of a $624,100 base salary, $855,100 in target annual incentive awards, and $2,218,800 in target long-term equity incentives. He will also receive a $100,000 annual company contribution to his Deferred Compensation Plan and a one-time performance share award valued at $2,000,000.
What severance benefits are in place for Dr. Mattera?
In case of termination by the Company without cause or by Dr. Mattera for good reason, he is entitled to cash severance equal to two times his average base salary and annual cash bonuses for the prior three years, plus up to 18 months of COBRA continuation coverage. These benefits are enhanced during an 18-month period following a change in control, with severance increasing to 2.99 times average compensation over the prior five years and a $40,000 payment for post-termination benefits.
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