Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 2, 2020, Aviat Networks, Inc. ("Aviat" or the "Company") announced
the appointment of Peter Smith as President and Chief Executive Officer of
Aviat, effective January 2, 2020, pursuant to an employment agreement (the
"Employment Agreement") with him.
Mr. Smith has over 20 years of experience in business management and leadership,
including leading organic and acquisitive growth, operational excellence and
profit and loss management at companies across multiple industries. Before
joining the Company, Mr. Smith, age 54, was Senior Vice President US Windows and
Canada for Jeld-Wen, a manufacturer of windows and doors, since 2017. From 2013
to 2017, Mr. Smith served as President, Transportation and Industrial Segment,
for Polypore International, a manufacturer of microporous membranes, where he
implemented a strategy for growth in a stagnant lead acid separator business and
helped prepare the formerly-public company for its sale to the Asahi Kasei Group
in 2015. From 2011 to 2013, Mr. Smith was the Chief Executive Officer and a
director of Voltaix Inc., a supplier to the semiconductor industry, until its
sale to Air Liquide. Mr. Smith also served on the board of directors of Soleras
Advanced Coatings, a specialty materials company, from 2015 to 2018. Earlier in
his career, Mr. Smith held a number of executive operational and leadership
positions at Cooper Industries' industrial wireless business, Dover Knowles
Electronics' semiconductor components business and Honeywell Corporation's
specialty materials business. Mr. Smith has a Bachelor of Science degree in
Material (Ceramics) Engineering from Rutgers University, received his PhD in
Material Science and Engineering from Rutgers University and holds a Master of
Business Administration degree from Arizona State University.
Pursuant to the Employment Agreement, Mr. Smith will receive an annual base
salary of $400,000 and be eligible for cash bonus payments of up to an annual
aggregate of 70% (with partial years to be paid on a pro-rated basis), subject
to the terms of the Company's Annual Incentive Plan for 2020 and the discretion
of the Company's board of directors.
Mr. Smith will also receive restricted stock units ("RSUs") pursuant to his
Employment Agreement. He will receive 18,750 RSUs which shall vest if and when
the price of the Company's common stock reaches $22.50, subject to his
continuous employment from the grant date until such vesting date. If a vesting
threshold is not reached by January 2, 2022, those RSUs shall be cancelled and
given no further effect. Mr. Smith will also receive 27,750 RSUs which shall
vest if and when the price of the Company's common stock reaches $30.00, subject
to his continuous employment from the grant date until such vesting date. If a
vesting threshold is not reached by January 2, 2023, those RSUs shall be
cancelled and given no further effect. In addition, subject to the approval of
the Company's board of directors, Mr. Smith is eligible to participate in the
Company's long-term equity incentive plan beginning in fiscal year 2022.
Mr. Smith employment is at will, and his employment may be terminated by him or
the Company at any time, with or without cause or notice.
In the event that Mr. Smith resigns from the Company without "good reason" or
Mr. Smith's employment is terminated by the Company for "cause," each as defined
in the Employment Agreement, he will not be entitled to any compensation or
benefits from the Company other than those earned through the date of
termination of employment. If Mr. Smith's employment is terminated by reason of
death, he will not be entitled to any compensation or benefits from the Company
other than those earned through the date of such termination, except that his
estate will receive a pro rata portion of any short-term incentive bonus that he
would have earned during the incentive bonus period in which his employment
terminates.
If Mr. Smith's employment is terminated by the Company without cause or in
connection with a long-term disability, or if Mr. Smith resigns from his
employment for good reason, Mr. Smith will be entitled to the following
severance benefits as long as he signs a general release in favor of the
Company:
· all compensation and benefits that are earned but unpaid through the date of
termination;
· severance payments at Mr. Smith's final base salary rate for a period of 12
months following such termination;
· payment of premiums necessary to continue group health insurance under COBRA
for a period of up to 12 months following such termination;
· the prorated portion of any incentive bonus that Mr. Smith would have earned,
if any, during the incentive bonus period in which Mr. Smith's employment
terminates; and
· with respect to any stock options or other equity-related awards, vesting will
cease upon Mr. Smith's termination date, but he will be entitled to purchase
any vested shares of stock that are subject to options until the earlier of (a)
12 months following the termination date or (b) the date on which the
applicable options expire.
If, within 12 months following any "change of control" (as defined in the
employment agreement), Mr. Smith is terminated by the Company without cause or
if he resigns from his employment for good reason and signs a release in favor
of the Company, he will be entitled to the severance benefits and payments
described above, except that he will receive a payment (in lieu of the incentive
bonus described above) equal to his target incentive bonus for the year in which
his employment terminates. Such payment will be made to Mr. Smith within 15 days
following the date on which a general release becomes irrevocable. The Company
will also accelerate the vesting of all unvested stock options granted to Mr.
Smith by the Company, and all other then-unvested equity-related awards that
vest based solely on continued employment by the Company or its affiliates
(unless the terms of such other equity-related awards expressly provide that
there is not to be any such acceleration). The total cash compensation pursuant
in connection with a change of control shall not exceed $750,000.
The Company has also agreed to compensate Mr. Smith for temporary living
expenses in Austin, Texas for three months, up to $10,000 per month, and
relocation expenses up to $75,000.
Mr. Smith is subject to non-compete provisions during the term of the employment
agreement and non-solicitation covenants during the term of his employment
agreement and for 12 months after his employment terminates.
Mr. Smith has not engaged in a related party transaction with the Company during
the last two fiscal years, and there are no family relationships between Mr.
Smith and any of Aviat's executive officers or directors.
Effective as of January 2, 2020, the Company's prior Interim President and Chief
Executive Officer, Stan Gallagher, will continue serving the Company in his role
as Chief Operating Officer and Principal Financial Officer.
The foregoing summary description of the Employment Agreement is qualified in
its entirety by reference to the full text of the Employment Agreement, a copy
of which is attached hereto as Exhibit 10.1 and incorporated herein in its
entirety by reference. A copy of the press release announcing Mr. Smith's
appointment is furnished as Exhibit 99.1 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Employment Agreement, dated January 2, 2020, between Aviat Networks,
Inc. and Peter Smith.
99.1 Press Release, dated January 2, 2020.
© Edgar Online, source Glimpses