8-K

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): February 28, 2019

IES Holdings, Inc.

(Exact name of registrant as specified in Charter)

Delaware	001-13783	76-0542208
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

5433 Westheimer Road, Suite 500, Houston, Texas 77056

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (713) 860-1500

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Officer Appointment

On March 4, 2019, IES Holdings, Inc. (the “Company”) announced the appointment of Gary S. Matthews as Chief Executive Officer of the Company and as a Director on the Board of Directors of the Company (the “Board”), effective as of March 4, 2019.

Prior to joining the Company, Mr. Matthews, age 61, served as Managing Director of Morgan Stanley Capital Partners since 2007, where he worked with the private equity team in evaluating companies for direct investments and helping to oversee the management and strategies for those businesses. Prior to joining Morgan Stanley, Mr. Matthews led several private equity-backed manufacturing companies, including serving as President of Simmons Bedding Company, Chief Executive Officer of Sleep Innovations, Inc. and Chief Executive Officer of Derby Cycle Corporation, and also led business units of several public companies, including serving as President of Worldwide Consumer Medicines at Bristol-Myers Squibb Company, Managing Director for Diageo/Guinness Limited in the UK and President and Chief Executive Officer of Guinness Import Company in Stamford, Connecticut. Mr. Matthews has also held senior management positions at PepsiCo, Inc. and McKinsey & Company. Mr. Matthews currently serves on the board of directors of Pathway Partners Vet Holding LLC and Manna Pro Products, LLC. He has previously served as Chairman of the board of directors of Hojeij Branded Foods, Creative Circle, LLC and Tops Markets, LLC, and as a member of the board of directors of Lagunitas Brewing Company, Molson Coors Brewing Company, Lenox Group Inc. (previously Department 56), Learning Care Group, Inc., Van Wagner, Inc. and Canyon Ranch.

The Nominating/Governance Committee believes that Mr. Matthews is qualified to serve on the Board given his extensive board experience, his broad leadership experience at public and private companies across a diverse range of industries and his experience identifying and overseeing strategic investments.

The Employment Agreement

In connection with his appointment, the Company has entered into an employment agreement with Mr. Matthews, dated February 28, 2019 (the “Employment Agreement”). The Employment Agreement provides for a term of employment for Mr. Matthews commencing on March 4, 2019 (the “Effective Date”) and ending on September 30, 2022 (the “Employment Term”). Pursuant to the Employment Agreement, Mr. Matthews’ employment may be terminated at any time during the Employment Term.

Pursuant to the Employment Agreement, during the Employment Term, Mr. Matthews will be entitled to an annual base salary of $650,000, subject to annual review and adjustment by the Board. In addition, pursuant to the Employment Agreement, during each year of the Employment Term, he will be eligible to receive a target annual cash award under the Company’s Short-Term Incentive Plan (“STIP”) that is equal to 100% of his base salary for such fiscal year (pro-rated for any partial year of service). The payout percentage of his STIP awards is set at a range of 100% for achievement of target or better performance to 50% for achievement of threshold performance, with a payout percentage of 0% for performance below threshold. If during any fiscal year during the Employment Term, Mr. Matthews’ actual individual performance is less than individual threshold performance, then the individual performance-based component of the award and the Company performance-based component of the award shall both equal zero, regardless of actual Company financial performance. Pursuant to the Employment Agreement, the STIP cash award for fiscal year 2019 shall be based only on the individual component.

For each fiscal year during the Employment Term, Mr. Matthews will be eligible for an award under the Company’s Long-Term Incentive Plan Annual Grant Program (“LTIP”), equal to a number of restricted shares of common stock calculated by dividing (i) his base salary for such fiscal year (pro-rated for any partial year of service) by (ii) the average price of the Company’s common stock for the five trading days immediately prior to the grant date. Each LTIP award will vest based on Company performance over a three-year performance period at a range of 100% for target or better performance to 50% for threshold performance, with 0% vesting for performance below threshold.

The Employment Agreement also provides that on the Effective Date Mr. Matthews shall be granted an equity incentive award of 260,000 restricted shares of the Company’s common stock, subject to the terms and conditions set forth in the respective equity award agreement and the Company’s Amended and Restated 2006 Equity Incentive Plan dated as of February 9, 2016. Such restricted shares shall vest as follows:

1. Time-Based Award: 80,000 restricted shares shall vest over a four-year period, based on Mr. Matthews’ continued employment with the Company, with 20,000 shares vesting on each of the first, second, third and fourth anniversaries of the Effective Date.

2. First Stock Price-Based Award: Subject to a service requirement, 20,000 restricted shares shall vest when the closing price per share of Company’s common stock equals or exceeds $35 per share for any 20 trading days out of 25 consecutive trading days at any time during the five years following the Effective Date.

3. Second Stock Price-Based Award: Subject to a service requirement, 160,000 restricted shares shall vest in four tranches of 40,000 shares, with each tranche vesting when the closing price per share of Company’s common stock equals or exceeds the price specified below for such tranche for any 20 trading days out of 25 consecutive trading days (the “Vesting Stock Price”) at any time during the five years following the Effective Date:

a. Tranche 1: 40,000 shares with a Vesting Stock Price of $35 per share;

b. Tranche 2: 40,000 shares with a Vesting Stock Price of $40 per share;

c. Tranche 3: 40,000 shares with a Vesting Stock Price of $45 per share; and

d. Tranche 4: 40,000 shares with a Vesting Stock Price of $50 per share.

Pursuant to the Employment Agreement, Mr. Matthews will also participate in the Company’s Amended and Restated Executive Officer Severance Benefit Plan, except as otherwise provided in the Employment Agreement, and shall be entitled to indemnification by the Company on terms no less favorable than that provided to any other executive officer or director of the Company. There is no arrangement or understanding between Mr. Matthews and any other persons pursuant to which he was appointed to the Board, and there are no relationships between Mr. Matthews and the Company or any other person that are required to be disclosed pursuant to Items 401 or 404 of Regulation S-K.

Officer Departure

On March 4, 2019, the Company also announced that Mr. Robert W. Lewey, President of the Company, has stepped down as President of the Company and has resigned as a Director of the Company, effective as of March 4, 2019, and intends to assume a senior management role within the Company’s Residential Division.

Item 7.01 Regulation FD Disclosure.

On March 4, 2019, the Company issued a press release announcing the change in leadership roles described under Item 5.02 above. The press release is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release dated March 4, 2019.

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.

	IES HOLDINGS, INC.
Date: March 6, 2019	/s/ Gail D. Makode
	Gail D. Makode
	Senior Vice President and General Counsel

EX-99.1

Exhibit 99.1

Contacts: Tracy McLauchlin, Chief Financial Officer

IES Holdings, Inc.                                                         

713-860-1500                                                                

FOR IMMEDIATE RELEASE

IES HOLDINGS ANNOUNCES APPOINTMENT OF GARY MATTHEWS AS CHIEF EXECUTIVE OFFICER

HOUSTON — March 4, 2019 — IES Holdings, Inc. (or “IES” or the “Company”) (NASDAQ: IESC) announced today that Gary S. Matthews has been appointed as Chief Executive Officer and a Director of IES, effective immediately. The Company also announced that Robert W. Lewey has stepped down as President and as a Director of the Company, effective March 4, 2019, in order to assume a senior management role within the Company’s Residential Division.

Prior to joining IES, Mr. Matthews spent twelve years as Managing Director and Operating Partner of Morgan Stanley Capital Partners, the private equity business of Morgan Stanley, where he oversaw numerous portfolio companies. Prior to that role, he led several private equity-backed manufacturing companies, as well as business units of several public companies. Mr. Matthews also held senior management positions in strategic planning at PepsiCo after working as a Senior Engagement Manager at McKinsey & Company.

“We are pleased by the addition of Gary to lead our management team as we enter a more strategic phase of our growth,” said Jeffrey Gendell, Chairman of the Board of IES. “Gary has a broad strategic planning background and experience managing decentralized businesses, which will be instrumental in accelerating our expansion plans. Gary also has substantial experience in managing large organizations and developing management teams. We believe our solid balance sheet and free cash flow will help allow us to take advantage of growth opportunities in our existing businesses and establish additional operating platforms under IES.

“On behalf of the entire Board and the employees of IES, I want to thank Bobby Lewey for his guidance over the past four years as President as we strengthened our operations and positioned IES for the anticipated growth in the electrical and telecommunications industries, and we look forward to his continued contributions to our Residential segment.”

Mr. Matthews stated, “I am excited to assume this new role and for the future of IES. We have an accomplished team that is focused on maintaining our strong leadership position in the markets we serve while driving future growth opportunities for the Company.”

ABOUT IES HOLDINGS, INC.

IES is a holding company that owns and manages diverse operating subsidiaries, comprised of providers of industrial infrastructure services to a variety of end markets. Our approximately 4,500 employees serve clients in the United States. For more information about IES, please visit www.ies-co.com.

Certain statements in this release may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, all of which are based upon various estimates and assumptions that the Company believes to be reasonable as of the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” anticipate,” “believe,” “seek,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” the negative of such terms or other comparable terminology. These statements involve risks and uncertainties that could cause the Company’s actual future outcomes to differ materially from those set forth in such statements. Such risks and uncertainties include, but are not limited to, the ability of our controlling shareholder to take action not aligned with other shareholders; the possibility that certain tax benefits of our net operating losses may be restricted or reduced in a change in ownership or a further change in the

federal tax rate; the potential recognition of valuation allowances or further write-downs on net deferred tax assets; the inability to carry out plans and strategies as expected, including underperformance of our acquisitions or our inability to identify and complete acquisitions that meet our investment criteria in furtherance of our corporate strategy; competition in the industries in which we operate, both from third parties and former employees, which could result in the loss of one or more customers or lead to lower margins on new projects; fluctuations in operating activity due to downturns in levels of construction, seasonality and differing regional economic conditions; and our ability to successfully manage projects, as well as other risk factors discussed in this document, in the Company’s annual report on Form 10-K for the year ended September 30, 2018 and in the Company’s other reports on file with the SEC. You should understand that such risk factors could cause future outcomes to differ materially from those experienced previously or those expressed in such forward-looking statements. The Company undertakes no obligation to publicly update or revise any information, including information concerning its controlling shareholder, net operating losses, borrowing availability, or cash position, or any forward-looking statements to reflect events or circumstances that may arise after the date of this release.

Forward-looking statements are provided in this press release pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of the estimates, assumptions, uncertainties, and risks described herein.

General information about IES Holdings, Inc. can be found at http://www.ies-co.com under “Investors.” The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through the Company’s website as soon as reasonably practicable after they are filed with, or furnished to, the SEC.