Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
AZZ incorporated, a Texas corporation ("AZZ"), announced that after 39 years of
dedicated service to AZZ, Mr. Dana L. Perry will retire from his position as
Senior Vice President of Finance and Chief Financial Officer of AZZ effective as
of May 31, 2014. Mr. Perry will continue to serve in such offices in a
transition role until the date of his retirement, and Mr. Perry will continue to
serve as a member of AZZ's Board of Directors following his retirement as an
officer of AZZ.
On February 24, 2014, AZZ agreed to employ Mr. Paul Fehlman, age 50, to serve as
Mr. Perry's successor as AZZ's Senior President of Finance and Chief Financial
Officer. Prior to joining AZZ, Mr. Fehlman served as Vice President Finance for
the Engineered Products Division of Flowserve Corporation, a global provider of
fluid motion and control products and services, and has previously held roles as
Vice President Treasurer and Vice President Financial Planning and Analysis and
Investor Relations at Flowserve Corporation. Mr. Fehlman's employment with
Flowserve Corporation terminated effective as of December 2013. In appointing
Mr. Fehlman for these positions with AZZ, the Board considered Mr. Fehlman's
experience serving as an executive officer of a public company and his extensive
experience in international finance and operations serving industrial
manufacturing and energy markets similar to those served by AZZ. Mr. Fehlman
will immediately begin working with Mr. Perry to transition into the offices of
Senior Vice President of Finance and Chief Financial Officer of AZZ.
Mr. Fehlman's employment with AZZ will be subject to an employment agreement
entered into by Mr. Fehlman and AZZ on February 24, 2014 (the "Employment
Agreement"). The Employment Agreement has a 2 year term, subject to automatic 1
year extensions at the discretion of Mr. Fehlman and AZZ, and provides, among
other things, for an initial base salary of $325,000, an initial grant of equity
awards valued at $275,000 consisting of 50% stock appreciation rights and 50%
restricted stock units (all of which will be issued under the AZZ incorporated
Amended and Restated 2005 Long Term Incentive Plan, as may be amended from time
to time (the "LTI Plan")) and that Mr. Fehlman shall be eligible to participate
in AZZ's short term incentive bonus program (the "STI Program"), with the target
amount of annual bonus under the STI Program for AZZ's fiscal year ending
February 28, 2015 equal to 55% of Mr. Fehlman's base salary and the maximum
amount of such bonus equal to 110% of Mr. Fehlman's base salary. The Employment
Agreement also provides for severance payments, in the amount of 12 months of
base salary and a pro-rated annual cash bonus, in the event Mr. Fehlman's
employment is terminated by AZZ without Cause or by Mr. Fehlman for Good Reason
(each such term as defined in the Employment Agreement), subject to customary
non-compete, non-solicitation and confidentiality provisions.
In addition to the Employment Agreement, Mr. Fehlman and AZZ also entered into a
change in control agreement on February 24, 2014 (the "Change in Control
Agreement"). The Change in Control Agreement will remain in effect for so long
as Mr. Fehlman is employed by AZZ and provides, among other things, that, upon
the occurrence of a Change in Control (as defined in the Change in Control
Agreement), Mr. Fehlman will receive certain payments from AZZ if his employment
is terminated by AZZ without Cause or by Mr. Fehlman for Good Reason (each such
term as defined in the Employment Agreement), in each case within 12 months of
such Change in Control. Such payments include payment of any accrued base salary
that is unpaid at the time of such termination and a severance payment in the
amount of 200% of Mr. Fehlman's base salary in effect immediately prior to such
termination and the 5 year average of the cash bonus payable to Mr. Fehlman
under the STI Program. In addition, the Change in Control Agreement provides
that any unvested stock appreciation rights, restricted stock units or other
equity awards issued to Mr. Fehlman by AZZ would immediately vest upon such a
termination of his employment.
The foregoing summary descriptions of the Employment Agreement, the Change in
Control Agreement, the LTI Plan and the STI Program do not purport to be
complete and are qualified in their entirety by reference to the terms of the
Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and
incorporated herein by reference, the terms of the Change in Control Agreement,
a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by
reference, the terms of the LTI Plan, a copy of which is included as Annex A to
the Proxy Statement on Schedule 14A filed by AZZ on June 4, 2009 and
incorporated herein by reference, and the description of the STI Program
contained in the Proxy Statement on Schedule 14A filed by AZZ on June 4, 2013,
Section 7 - Regulation FD
Item 7.01 Regulation FD Disclosure.
On February 24, 2014, AZZ issued a press release announcing the retirement of
Mr. Perry and the hiring of Mr. Fehlman. A copy of this press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
The following exhibits are filed as part of this report.
Exhibit No. Description
10.1 Employment Agreement by and between AZZ incorporated and Paul Fehlman,
dated as of February 24, 2014.
10.2 Change in Control Agreement by and between AZZ incorporated and Paul
Fehlman, dated as of February 24, 2014.
99.1 Press Release issued by AZZ incorporated dated February 24, 2014.