form8k_120808.htm
SECURITIES
AND EXCHANGE COMMISSION
FORM
8-K
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported)
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December
2, 2008
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ATC
TECHNOLOGY CORPORATION
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(Exact
name of registrant as specified in its
charter)
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification No.)
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1400
Opus Place, Suite 600, Downers Grove, Illinois
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(Address
of principal executive offices)
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Registrant's
telephone number, including area code
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(Former
name or former address, if changed since last
report.)
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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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02. Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers;
Compensatory
Arrangements of Certain
Officers.
2009
Incentive Compensation Programs
On
December 2, 2008, the Compensation and Nominating Committee of the Board of
Directors of ATC Technology Corporation approved the 2009 annual incentive
compensation plan and the 2009 long-term cash incentive portion of the Company’s
long-term incentive plan for two of our named executive officers and two other
executive officers who are expected to be named executive officers for 2008,
which plans are administered under our Stock Incentive Plans. In the
2009 annual incentive compensation plan, these officers will receive a cash
bonus if we achieve or exceed specified EPS and other financial targets for
2009, provided that the bonuses may be reduced by up to 20% at the discretion of
the Committee if certain operational metrics are not achieved during the year.
In the long-term cash incentive plan, these officers will be eligible to receive
a cash award after three years only if ATC Technology Corporation and/or the
officer’s business segment achieves targets for revenue, net income and return
on invested capital established for the three-year period of
2009-2011. These bonuses are stated as a percentage of base
salary. For 2009, the base bonus percentage for each of these
officers is as follows:
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Annual
Plan
Percent
of Base Salary
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Long-term
Cash Plan
Percent
of Base Salary
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F.
Antony Francis
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60%
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37.5%
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Richard
L. Stanley
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60%
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37.5%
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John
M. Pinkerton
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45%
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22.5%
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Joseph
Salamunovich
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45%
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22.5%
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Appointment
of Chief Financial Officer
Ashoka
Achuthan, 53, has been appointed Vice President and Chief Financial Officer of
the Company, effective December 8, 2008. Mr. Achuthan’s compensation
includes:
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•
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Base
annual salary of $315,000;
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Target
cash bonus under our annual incentive compensation plan of 60% of base
salary;
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Target
cash bonus under our long-term incentive plan of 37.5% of base
salary;
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•
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A
signing bonus of $75,000;
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•
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Stock
options and restricted stock as described below under “Stock Awards to
Executive Officers;”
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Relocation
benefits; and
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Various
perquisites as described below under “New Executive Officer Employment
Agreements.”
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Prior to
joining us, Mr. Achuthan served as the Vice President and Chief Financial
Officer of Cooper Power Systems, Inc. (a division of Cooper Industries) from
2005 to 2008. Before that, he worked for Siemens AG for 27 years in
increasingly responsible financial positions, including serving as Executive
Vice President and CFO of Siemens VDO Automotive Corporation from 2000 to
2005. Mr. Achuthan holds an M.B.A. from Case Western Reserve
University and is a member of the Institute of Chartered Accountants of
India.
Appointment
of Chief Accounting Officer
John
Pinkerton has been appointed Vice President and Chief Accounting Officer of the
Company. Previously Mr. Pinkerton served as the Company’s Vice
President and Controller and between May and December 2008 also served as acting
CFO. Mr. Pinkerton’s base annual salary has been increased from
$230,500 to $256,500 and he has received stock options and restricted stock as
described below under “Stock Awards to Executive Officers.”
Board
of Director Changes
Todd
R. Peters, the
Company’s President and Chief Operating Officer, will become a member of the
Company’s Board of Directors effective January 1, 2009. See Item
5.03. “Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year”
below.
Edward
Stewart, who has served as a member of the Board of Directors since 2004, will
succeed Michael D. Jordan as Lead Director of the Board, effective January 1,
2009. Mr. Jordan will remain on the Board.
Stock
Awards to Executive Officers
On
December 8, 2008, the Compensation and Nominating Committee granted restricted
shares of our common stock and options to purchase shares of our common stock,
pursuant to our 2006 Stock Incentive Plan, to the following executive
officers:
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Number
of Shares
of Restricted
Stock
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Number
of
Stock
Options
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Ashoka
Achuthan
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20,000
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30,000
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John
M. Pinkerton
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7,500
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--
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The
restricted stock vests in one-third increments on each of December 8, 2009, 2010
and 2011. No consideration was paid for the restricted
stock. The options vest and become exercisable in one-third
increments on each of December 8, 2009, 2010 and 2011 and expire on December 8,
2018. The option exercise price is $16.98 (the closing price of our
stock on the Nasdaq Global Market System on the date of grant).
New
Executive Officer Employment Agreements
ATC
Technology Corporation is entering into a new form of written employment
agreement with each of its executive officers, other than CEO Donald T. Johnson,
Jr., and COO Todd R. Peters. These new agreements are on a
year-to-year basis with unlimited automatic renewals.
Each
agreement provides for a base salary, participation in our various incentive and
benefit plans, and various perquisites, including an annual car allowance of
$9,600 and
reimbursement of expenses for financial planning, club dues and similar matters
equal to 2% of annual base salary. There is also a noncompetition
provision that runs for 18 months after the executive officer ceases to be
employed by us, a confidentiality provision, and a provision that prohibits the
executive from soliciting our employees for employment by other companies during
a specified period after leaving the Company.
Each
agreement also provides that we will make severance payments to the executive
officer if (i) the executive is terminated without cause or resigns for
“good reason” (see below), or (ii) the Company does not renew the
agreement. Severance is equal to 12 months of base salary (18 months
for Mr. Achuthan) plus 1.0 times the target bonus under our annual
incentive compensation plan (1.5 times for Mr. Achuthan). If the
termination date occurs within 18 months after a
“change
in control” (see below), the executive officer would instead receive severance
equal to 18 months of base salary (24 months for Mr. Achuthan), 1.5 times the
target bonus under our annual incentive compensation plan (2.0 times for Mr.
Achuthan), and a prorated portion of any cash bonuses under our annual and
long-term incentive plans.
Severance
payments will ordinarily be made over the severance period unless the
termination date occurs within 18 months after a change in control, in
which case the severance will be made in a single payment within ten days after
the termination date.
These new
employment agreements do not provide for any payments or benefits upon a change
in control unless the executive officer’s employment is terminated at the time
of the change in control. Neither do they provide for a tax
“gross-up” to offset the “parachute” excise tax under Internal Revenue Code
Section 4999.
“Good
reason” means (i) a material diminution in the executive officer’s
compensation, authority or responsibilities that is not justified by his or her
performance, or (ii) our material breach of the employment agreement, where
such diminution or breach is not cured within 30 days after notice from the
executive officer.
“Change
in control” occurs if (i) a reorganization, merger or consolidation of ATC Technology
Corporation or sale of all or substantially all of our assets occurs unless
after such transaction at least 85% of the total voting power of the
entity surviving or resulting from such transaction is beneficially owned by
persons who prior to the transaction beneficially owned 100% of the total voting
power of ATC Technology Corporation, (ii) any shareholder (or group of
shareholders) becomes the
beneficial owner of more than 35% of the total voting power
of ATC Technology Corporation, or (iii) during any 12-month period
individuals who at the beginning of such 12-month period constituted our Board
of Directors (together with any new directors whose election by such Board or
whose nomination for election by our shareholders was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of our
Board of Directors.
Item 5.03. Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On December 3, 2008 the
Board of Directors of ATC Technology Corporation, pursuant to authority granted
in the Company’s Bylaws, increased the size of the Board of Directors from seven
to eight members, effective January 1, 2009. Mr. Peters will fill the new
seat on the Board.
Item 9.01. Financial Statements and
Exhibits.
Exhibit
3.2: Section 3.02 of ATC Technology Corporation
Bylaws
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.
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Dated: December
8, 2008
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ATC
TECHNOLOGY CORPORATION
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By:
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/s/
Joseph Salamunovich
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Title: Vice
President
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