Attached files
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| EX-10.1 - Symmetry Medical Inc. | v208306_ex10-1.htm |
| EX-10.2 - Symmetry Medical Inc. | v208306_ex10-2.htm |
| EX-10.3 - Symmetry Medical Inc. | v208306_ex10-3.htm |
| EX-10.4 - Symmetry Medical Inc. | v208306_ex10-4.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
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 11, 2011
SYMMETRY
MEDICAL INC.
(Exact
name of Registrant as specified in its charter)
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Delaware
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001-32374
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35-1996126
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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3724
N State Road 15, Warsaw, Indiana 46582
(Address
of Principal executive offices, including Zip Code)
(574)
268-2252
(Registrant’s
telephone number, including area code)
(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):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ 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 Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
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A.
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Departure of Brian
Moore from the Positions of President and Chief Executive Officer and
Compensation Arrangement.
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On
January 17, 2011 Brian S. Moore left his position as President and Chief
Executive Officer of Symmetry, and the Board of Directors thereafter appointed
him to the position of President of Business Development. On January
17, 2011 the Company entered into a Third Amendment to Employment Agreement (the
“Third Amendment”) with Mr. Moore which amends the terms of his
employment.
The Third
Amendment provides Mr. Moore with a salary of $355,992 per annum through the
term, which ends on June 30, 2012. Mr. Moore will also be entitled to
receive a discretionary bonus comparable to that paid to the Company's other
senior executives for work during 2010 if any is paid, a performance bonus equal
to 90% of any fees or compensation the Company receives from third parties for
his work or services for such third parties, net of any costs of travel, taxes
and expenses incurred by the Company in his performance of such duties, and
continued benefits on the same terms as other Symmetry employees through the
term. In addition to the foregoing, Mr. Moore will receive
reimbursement for the cost of an executive physical at Mayo Clinic in January
2011 and January 2012; use of an automobile through and including December 2011;
membership in the National Association of Corporate Directors and payment for
attendance at one course per calendar year, at his discretion, not to exceed
$3,000 in cost; eight round-trip coach class flights between the United States
and his home in the UK, not to exceed $18,000 in cost; reimbursement for up to
$5,000 in legal fees and costs incurred by him for legal services related to any
efforts required by him to obtain or retain a visa or green card; and
reimbursement for up to $5,000 for tax preparation services and/or
advice.
If Mr.
Moore's employment is terminated for any reason prior to the end of the term,
Mr. Moore will be entitled to (a) receive his base salary through the
termination date and any earned by unpaid bonus and other benefits as of that
date, (b) if he has not breached his obligations under the amended employment
agreement, continuation of his base salary through the end of the term as
severance pay subject to Mr. Moore providing the Company with a general release
of claims), (c) a grant of restricted stock covered by his restricted stock
agreement dated March 31, 2010 (if not granted prior to the termination date),
based on the performance and other criteria set forth in that agreement, and (d)
vesting of his 112,250 unvested shares of restricted stock on the later of his
termination date or January 3, 2012.
The
foregoing summary of the Third Amendment to Employment Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Third Amendment to Employment Agreement, which is filed hereto as Exhibit 10.1
and is incorporated herein by reference.
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B.
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Appointment of Thomas
J. Sullivan to the positions of President and Chief Executive Officer and
to the Board of Directors and Compensation
Arrangement.
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1.
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Mr. Sullivan’s
Appointment.
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On
January 17, 2011 the Company’s Board of Directors appointed Thomas J. Sullivan
to be the Company’s President and Chief Executive Officer as well as to be a
member of the Board of Directors of the Company as a Class III
Director. His term as a Class III director will end at the Company’s
2011 Annual Meeting of Shareholders, and it is anticipated that he will be
nominated for re-election at that time.
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2.
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Mr. Sullivan’s
Background and Experience.
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Relative
to Mr. Sullivan’s background, from June of 2007 through 2010, Mr. Sullivan was
the President of the Supply Chain & Business Process Division of Johnson
& Johnson Health Care Systems Inc. (“J&J”). In this role, he
led the Commercial and Government Contracting processes in support of the
J&J U. S. Medical Device & Diagnostics, Pharmaceutical, and Consumer
health care customers. He also led the Logistics, e-Business, Channel
Management, Program Management, and global Supply Chain / ERP Competency Centers
for the J&J’s Medical Device & Diagnostics Group. From
mid-year 2010 until year end, Tom held additional responsibility as the Global
Vice President, Customer Experience for the J&J Supply Chain Customer &
Logistics Services Team accountable for customer facing roles in Distribution,
Customer Service, and Transportation supporting all J&J commercial companies
throughout the world. From 2005 to 2007, Mr. Sullivan was the
President of DePuy Orthopaedics, Inc. From 2002 to 2005 he served as
President of J&J Medical Products Canada. From 1999 to 2001, Mr.
Sullivan served as General Manager for J&J Gateway LLC (the Medical Devices
and Diagnostics Group’s first dedicated e-business company) and Worldwide Vice
President of e-Business.
Mr.
Sullivan graduated as a Palmer Scholar from The Wharton School in 1991 where he
earned an MBA in Strategic Management and Information Technology. He
also holds a Bachelor of Science magna cum laude in Applied Mathematics and
Computer Science from the University of Pittsburgh.
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3.
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Mr. Sullivan’s
Employment Agreement.
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In
connection with Mr. Sullivan’s appointment to the positions of President and
Chief Executive Officer, the Company entered into an Employment Agreement with
him that provides for the payment of a salary of $500,000 per annum and
participation in the Company’s Incentive Bonus Plan with a target award at 70%
of his salary and opportunities to adjust the target award percentage from
0 – 2 times the target, depending on performance against the performance metrics
established by the Board of Directors. He is guaranteed a bonus
during 2011 of 50% of his target bonus level.
Mr.
Sullivan will also receive a sign-on bonus of $100,000, less applicable tax and
other deductions All or a portion of the sign-on bonus must be repaid
to the Company if Mr. Sullivan's employment is terminated by the Company for
"cause" or by Mr. Sullivan for "good reason", in either case within the first 24
months of his employment. Mr. Sullivan will also receive shares of
Symmetry common stock valued at $1,500,000. Of this grant, $900,000
in value will vest on three dates: the first 1/3 vests immediately and the other
2/3 vests in equal amounts on January 17, 2012 and January 17, 2013, subject to
acceleration in whole or in part upon the occurrence of certain
events. The other $600,000 of the grant will be subject to
modification in number of shares based on performance against performance
criteria for 2011 established at the Board’s April
meeting. Performance above the established criteria will increase the
number of shares in the Performance Grant up to 200% of the target amount, whereas performance below the
criteria will result in the forfeiture of some or all of the shares on a sliding
scale. Once the number of shares is established those shares will
fully vest 2 years thereafter. Mr. Sullivan will also receive
employee benefits identical to those offered to other Symmetry employees,
retirement medical benefits for himself and his family under certain
circumstances, reimbursement for legal fees and expenses in connection with the
negotiation of the terms of his employment, reasonable travel and housing
expenses related to visits to Warsaw, Indiana from his home, and relocation
assistance (including reimbursement for certain expenses) should he relocate to
Warsaw, Indiana.
The
Employment Agreement also requires Mr. Sullivan to provide the Company with
certain confidentiality, non-competition, non-raiding, waivers of claims and
other commitments that are applicable both during his employment and
thereafter.
The
foregoing summary of the Employment Agreement does not purport to be complete
and is qualified in its entirety by reference to the Employment Agreement, which
is filed hereto as Exhibit 10.2 and is incorporated herein by
reference.
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4.
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Mr. Sullivan’s
Executive Benefit Agreement.
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Mr. Sullivan and the Company have also
entered into an Executive Benefit Agreement which obligates the Company to
provide certain benefits to Mr. Sullivan following the termination of Mr.
Sullivan's employment with the Company. Following any termination,
Mr. Sullivan is entitled to receive his earned but unpaid salary through the
date of termination and any earned but unpaid incentive bonus for any previous
completed year. In the event Mr. Sullivan's employment is terminated
by the Company for any reason except for Cause (as defined in the agreement) or
Mr. Sullivan's Disability (as defined in the agreement) or is terminated by Mr.
Sullivan for Good Reason (as defined in the agreement), each of which is
referred to as a "Qualifying Termination," Mr. Sullivan is entitled to receive
severance benefits, consisting of: (a) continued salary payments for twelve (12)
months following the termination date, (b) a prorated incentive bonus (assuming
that all individual performance objectives had been achieved) for the year or
other performance period during which the termination date occurs, and (c)
reimbursement for any amounts Mr. Sullivan pays for COBRA continuation coverage
for himself and his eligible dependents that exceed the amount he paid for
health insurance prior to termination for 12 months following the termination
date. If a Qualifying Termination occurs within six months prior to
or 24 months following a Change in Control (as defined in the agreement) Mr.
Sullivan's severance benefits would consist of: (x) a lump sum payment equal to
twice the sum of Mr. Sullivan's then-current annual base salary plus his target
annual bonus, and (y) reimbursement for any amounts Mr. Sullivan pays for COBRA
continuation coverage for himself and his eligible dependents that exceed the
amount he paid for health insurance prior to termination for 24 months following
the termination date. In either event, the severance benefits may be
modified to avoid any tax penalties which may be imposed as a result of their
payment.
The acceptance of any of the severance
benefits would constitute a full settlement and discharge of all of the
Company's obligations to Mr. Sullivan. As a condition to his receipt
of any severance benefits, Mr. Sullivan also agrees to execute a release
agreement releasing and waiving any and all claims he may have against the
Company. Mr. Sullivan also covenants not to compete with the Company
and not to raid employees or solicit customers or employees of the Company
during his employment and for a period of twelve (12) months
thereafter. The Executive Benefit Agreement also provides that he
will maintain the confidentiality of the Company's proprietary information and
provides for the ownership by the Company of any developments made or conceived
by Mr. Sullivan during his employment.
The foregoing summary of the Executive
Benefit Agreement does not purport to be complete and is qualified in its
entirety by reference to the Executive Benefit Agreement, which is attached
hereto as Exhibit 10.3 and is incorporated herein by reference.
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C.
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Compensation
Arrangement with Chief Financial
Officer.
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On
January 11, 2011 the Company entered into a Bonus Agreement with Fred Hite, its
Senior Vice President, Chief Financial Officer and Investor Relations
Officer. The Bonus Agreement provides that the Company will pay Mr.
Hite $100,000, less tax and other withholdings, and that he will repay that
amount if he leaves the Company for any of certain enumerated reasons prior to
January 17, 2012. The foregoing summary of the Bonus Agreement does
not purport to be complete and is qualified in its entirety by reference to the
Bonus Agreement, which is filed hereto as Exhibit 10.3 and is incorporated
herein by reference.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On
January 17, 2011 the Board, acting pursuant to Article III, Section 2 of the
Company’s Amended and Restated Bylaws, increased the size of the Board to eight
(8) to accommodate Mr. Sullivan’s appointment.
Item
9.01. Financial Statements and Exhibits
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(d)
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Exhibits:
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10.1 Third
Amendment to Employment Agreement with Mr. Moore, dated January 17,
2011.
10.2 Employment
Agreement with Mr. Sullivan, dated January 17, 2011.
10.3 Executive
Benefit Agreement with Mr. Sullivan, dated January 17, 2011.
10.4 Bonus
Agreement with Mr. Hite, dated January 11, 2011.
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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Symmetry
Medical Inc.
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/s/
Fred L. Hite
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Date:
January 18, 2011
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Name:
Fred L. Hite
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Title:
Senior Vice President, Chief Financial Officer and Investor Relations
Officer
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