UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
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
15, 2008
|
TURBOCHEF
TECHNOLOGIES, INC.
(Exact
Name of Registrant as Specified in Charter)
|
|
|
|
|
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
|
(Commission
File
Number)
|
|
(IRS
Employer
Identification
No.)
|
Six
Concourse Parkway, Suite 1900, Atlanta, Georgia
|
|
|
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
|
Registrant’s
telephone number, including area code:
|
(678)
987-1700
|
(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 registrant under any of the following
provisions (see General
Instruction A.2. below):
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
| |
|
| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| |
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
| |
|
| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
|
ITEM
5.02
|
DEPARTURE
OF DIRECTORS OR PRINCIPAL OFFICER; ELECTION OF DIRECTORS; APPOINTMENT
OF
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS
|
Adoption
of Compensatory Arrangement
On
January 15, 2008, the Compensation Committee of the Company’s Board of Directors
approved a 2008 Incentive-Based Compensation Plan (the “Plan”). The
Company’s Chief Executive Officer, Chief Financial Officer and other executive
officers named in the Company’s public filings, as well as managers and key
employees of the Company, are participants in the Plan. The Plan
contemplates four key components for compensating and providing incentives
to
participants in a way that advances both the short- and long-term interests
of
the shareholders while also ensuring the Company is able to attract and retain
qualified employees. The components are base salary,
performance-based annual bonuses, performance-based additional annual bonuses
and awards of long-term equity-based compensation. The Committee has
not yet approved any equity-based awards under this new plan, but its policy
is
to consider proposals for such awards at the first regularly-scheduled meeting
of the Board of Directors for the year.
The
Plan
provides for a performance-based annual bonus for participants if the Company
reaches certain financial results, meets certain financial targets and attains
certain operational goals for 2008. The applicable triggers vary
based upon the participant’s assigned business category as set forth in the Plan
and the participant’s individual allocation under the Plan, and each business
category has a specific dollar cap on the potential aggregate base bonus
pool. All or a portion of the potential base annual bonus may be
earned if the Company attains certain target metrics, including revenue,
gross
margin and EBITDA targets. For one category of participants,
applicable to Mr. Lehr, a larger portion representing the balance of the
aggregate base bonus pool for that category may be earned if the Company
completes certain specified operational goals by indicated target dates in
2008.
Under
the
Plan, Messrs. Perlman and Price each could receive base bonuses of up to
$120,000, and Messrs. Fernandez and Cochran could receive a base bonus of
up to
$85,000 and $70,000, respectively, if the Company attains certain financial
results blended across the Company’s business targets and as a
whole. Mr. Lehr could receive a base bonus of up to $150,000 if
certain commercial products financial results are achieved and certain
operational goals in the residential product business are
accomplished. Mr. Beshara could receive a base bonus under the Plan
of up to $75,000, if the Company achieves certain revenue and gross margin
targets in the residential product business. Under the Plan, the
Compensation Committee may reconsider bonuses and consider for approval an
alternative management proposal for bonuses if the financial metrics within
eligible categories are not attained, but only if the proposal is based upon
the
actual financial results compared to the targets and other qualitative and
quantitative factors that the Committee believes reasonably support
approval.
The
Plan
further provides for two levels of an additional annual bonus if financial
targets are exceeded by set amounts for employees in all categories, including
executive officers. For Mr. Lehr, the additional annual bonus is at
the discretion of the Chief Executive Officer and Chairman, but it could
be
earned if revenue and gross margin targets for the commercial product business
are attained and the actual EBITDA percentage exceeds the targeted EBITDA
percentage, in which case the excess bonus pool is a percentage of total
revenue. Mr. Lehr could earn up to 17.5% of the excess bonus pool if
the financial targets are met. He could earn up to an additional
17.5% of the excess bonus pool if various operational goals related to the
residential product business also are achieved by certain target dates or
otherwise at the discretion of the Compensation Committee. Mr.
Beshara could earn an additional annual bonus at the discretion of the Chief
Executive Officer and Chairman and subject to final approval by the Compensation
Committee if excess revenue targets for residential products are achieved
and
gross margin targets are attained. The excess bonus pool would be a
percentage of the total revenue for residential products and Mr. Beshara
could
earn a bonus of up to 50% of that excess pool. The Chief Executive
Officer, Chief Financial Officer and other named executive officers could
earn
an additional annual bonus from an excess bonus pool equal to the sum of
half of
each of the excess pools described above. The allocation of any such
excess bonus pool will be determined at year end, subject to final approval
by
the Compensation Committee.
Modification
of Compensatory Contracts
On
January 18, 2008, the Company entered into amended and restated employment
agreements with executive officers. The primary purposes of the
amendments are to re-set the renewal anniversaries of the agreements all
to the
same date and to adjust certain provisions of the compensation arrangements
in
an effort to avoid adverse consequences of Section 409A of the Internal Revenue
Code. The amended and restated agreements have terms that have been
extended to December 31 of the calendar year in which their previous expiration
dates would have fallen. For example, the employment agreements for
four of the executive officers which, if not renewed, would have expired
on
October 28, 2008 will now expire, if not renewed, on December 31,
2008. The amended and restated agreements for three executive
officers, whose base salary has been subject to annual CPI adjustments, now
reflect the current adjusted compensation levels as the initial base salary
under the restatement. All separate allowances in two previous
agreements, such as automobile allowances, have been eliminated and replaced
with an adjusted amount of base salary, and a formulaic bonus arrangement
in
those two former agreements has been eliminated in favor of bonuses being
addressed in an annual incentive plan subject to approval by the Compensation
Committee each year. Agreements with the other executives also
provide for the possibility of bonuses under such a plan. In
addition, the amended and restated agreements provide additional clarity
to the
means for calculating the benefits portion of severance payment
obligations.
The
base
salaries for each of Messrs. Perlman, Price, Cochran and Fernandez are subject
to an annual adjustment for changes in the Consumer Price Index. The agreements
for all executives also provide for a severance payment upon the termination
of
the executive’s employment by the Company without cause or by the executive for
good reason or in the event of a change in control. For Messrs. Perlman,
Price
and Cochran the amount is equal to three times the executive’s total annual
compensation (base salary, bonus and benefits). For Mr. Fernandez the
amount is the same for termination in the event of a change in control, but
one
times such compensation in the case of termination without cause or for good
reason outside of a change of control. For Messrs. Beshara and Lehr,
the amount is one-half times base salary upon termination of employment by
the
Company without cause or by the executive for good reason or in the event
of a
change in control. The employment agreements entitle the executive to
participate in our employee benefit programs and provide for other customary
benefits. The employment agreements also provide for an additional, tax gross-up
payment to be made by the Company to the executive in the event that, upon
a
change in control, any payments made to the executive are subject to an excise
tax under Section 4999 of the Internal Revenue Code. Finally, the employment
agreements prohibit the executive from engaging in certain activities which
compete with the Company, recruiting its employees or disclosing any of its
trade secrets or otherwise confidential information.
The
amended and restated employment agreements reflect the following base
salaries:
|
Executive
|
|
Current
Base Salary
|
|
|
Richard
E. Perlman, Chairman
|
|
$ |
441,024 |
|
|
James
K. Price, CEO
|
|
$ |
439,324 |
|
|
J.
Miguel Fernandez de Castro, CFO
|
|
$ |
200,000 |
|
|
James
A. Cochran, SVP
|
|
$ |
274,439 |
|
|
Paul
P. Lehr, COO
|
|
$ |
300,000 |
|
|
Stephen
J. Beshara, Chief Branding Officer
|
|
$ |
300,000 |
|
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 hereunto
duly authorized.
| |
TURBOCHEF
TECHNOLOGIES, INC. |
|
| |
(Registrant) |
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
By: |
/s/
Dennis J.
Stockwell |
|
| |
|
Dennis
J.
Stockwell |
|
| |
|
Vice
President and
General Counsel |
|
Date: January
18, 2008