UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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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.
On May 11, 2020, Novanta Inc. (the “Company”) announced changes to the compensation of Matthijs Glastra, the Company’s Chief Executive Officer, Robert J. Buckley, the Company’s Chief Financial Officer, Brian S. Young, the Company’s Chief Human Resources Officer, and Peter L. Chang, the Company’s Chief Accounting Officer and Corporate Controller (collectively, the “Officers”) in light of the uncertain business environment resulting from the COVID-19 pandemic. Effective May 8, 2020, each of the Officers entered into a waiver to his Employment Agreement or Severance Agreement with the Company, as applicable (collectively, the “Waivers”) pursuant to which each Officer has agreed to (i) be furloughed without pay for two (2) weeks, consisting of one week in the second quarter of 2020 and one week in the third quarter of 2020, (ii) waive his previously approved merit salary increase for 2020, and (iii) waive 100% of his Annual Bonus (as defined in each Officer’s Employment or Severance Agreement with the Company, as applicable) for 2020. These waivers will result in an aggregate amount of $1.6 million (or approximately 50%) reduction in the 2020 cash compensation, assuming bonuses were paid at target, for these Officers previously approved by the Compensation Committee of the Board of Directors in February 2020.
Each of the Officers also declined to receive a special restricted stock unit grant awarded to substantially all of the employees of the Company in April 2020.
The foregoing description of the Waivers is qualified in its entirety by reference to the Waivers, applicable to the Company’s executive officers (not including Mr. Chang), which are filed as Exhibits 10.1, 10.2, and 10.3 hereto and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number |
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Description |
10.1 |
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Letter Agreement, dated May 8, 2020, between Novanta Inc. and Matthijs Glastra. |
10.2 |
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Letter Agreement, dated May 8, 2020, between Novanta Inc. and Robert J. Buckley. |
10.3 |
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Letter Agreement, dated May 8, 2020, between Novanta Inc. and Brian S. Young. |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 thereunto duly authorized.
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Novanta Inc. |
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(Registrant) |
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Date: May 11, 2020 |
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By: |
/s/ Robert J. Buckley |
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Robert J. Buckley |
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Chief Financial Officer |
Exhibit 10.1
May 8, 2020
Re: |
Furlough and Temporary Compensation Reduction |
Dear Matthijs:
Novanta, Inc. (the “Company” or “Novanta”) is facing business and financial challenges in light of the current COVID-19 global pandemic. As we all wish to provide Novanta the opportunity to extend its available resources, you have agreed to a reduction in your services and compensation as set forth in your Amended and Restated Employment Agreement, dated April 21, 2017. Accordingly, effective on May 8, 2020, you have agreed to the following:
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1. |
You will be furloughed for (a) a one-week period designated by the Company that will take place in the second quarter of fiscal year 2020 and (b) a one-week period designated by the Company that will take place in the third quarter of fiscal year 2020 (the two weeks together, the “Furlough Period”). During the Furlough Period, you will not provide services to the Company and you will not receive your Annual Base Salary (as defined in the Employment Agreement). As a result, although your Annual Base Salary will continue to be payable at the same rate, your aggregate Base Salary in 2020 will be reduced by 1/26th of your 2019 Base Salary of $650,004 due to non-payment during the Furlough Period and cancellation of 2020 merit increase approved by the Compensation Committee in February 2020, and your total 2020 Annual Base Salary will be $625,004 (the “Reduced Base Pay”). For the avoidance of doubt, the Reduced Base Pay shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), your full 2020 Annual Base Salary ($666,254) approved by the Compensation Committee in February 2020 would apply. |
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2. |
You will not be paid any Annual Bonus (as defined in the Employment Agreement) with respect to the fiscal year 2020 (the “2020 Bonus”), as presented and approved by the Compensation Committee in February 2020. For the avoidance of doubt, the bonus elimination shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), the 2020 bonus ($799,505, or 120% of your 2020 Annual Base Salary) approved by the Compensation Committee in February 2020 would apply. |
Except as set forth in this letter agreement, all other terms and conditions of your Employment Agreement shall remain in full force and effect. This letter agreement is entered into without reliance on any promise or representation other than those expressly contained herein. You hereby waive any notice period set forth in your Employment Agreement or otherwise for the changes set forth herein. You hereby agree that, notwithstanding anything to the contrary in the Employment Agreement, the actions described in this letter agreement will not, individually or in the aggregate, constitute “Good Reason” under the Employment Agreement. You also hereby confirm that you are not compelled to accept the Furlough Period, the Reduced Base Pay and/or the 2020 Bonus provisions described in this letter, and are doing so out of your own volition in an effort to assist Novanta.
Please indicate your agreement with these terms of this letter agreement by signing and dating this letter below.
Sincerely,
NOVANTA, INC.
/s/ Stephen W. Bershad |
Stephen W. Bershad
Title: Chairman of the Board
Agreed and accepted, dated May 8, 2020:
/s/ Matthijs Glastra |
Matthijs Glastra
Exhibit 10.2
May 8, 2020
Re: |
Furlough and Temporary Compensation Reduction |
Dear Robert:
Novanta, Inc. (the “Company” or “Novanta”) is facing business and financial challenges in light of the current COVID-19 global pandemic. As we all wish to provide Novanta the opportunity to extend its available resources, you have agreed to a reduction in your services and compensation as set forth in your Amended and Restated Employment Agreement, dated April 21, 2017. Accordingly, effective on May 8, 2020, you have agreed to the following:
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1. |
You will be furloughed for (a) a one-week period designated by the Company that will take place in the second quarter of fiscal year 2020 and (b) a one-week period designated by the Company that will take place in the third quarter of fiscal year 2020 (the two weeks together, the “Furlough Period”). During the Furlough Period, you will not provide services to the Company and you will not receive your Annual Base Salary (as defined in the Employment Agreement). As a result, although your Annual Base Salary will continue to be payable at the same rate, your aggregate Base Salary in 2020 will be reduced by 1/26th of your 2019 Base Salary of $434,655 due to non-payment during the Furlough Period, and cancellation of 2020 merit increase approved by the Compensation Committee in February 2020, and your total 2020 Annual Base Salary will be $417,937, (the “Reduced Base Pay”). For the avoidance of doubt, the Reduced Base Pay shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), your full 2020 Annual Base Salary ($445,521) approved by the Compensation Committee in February 2020 would apply. |
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You will not be paid any Annual Bonus (as defined in the Employment Agreement) with respect to the fiscal year 2020 (the “2020 Bonus”), as presented and approved by the Compensation Committee in February 2020. For the avoidance of doubt, the bonus elimination shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), the 2020 bonus ($356,417, or 80% of your 2020 Annual Base Salary) approved by the Compensation Committee in February 2020 would apply. |
Except as set forth in this letter agreement, all other terms and conditions of your Employment Agreement shall remain in full force and effect. This letter agreement is entered into without reliance on any promise or representation other than those expressly contained herein. You hereby waive any notice period set forth in your Employment Agreement or otherwise for the changes set forth herein. You hereby agree that, notwithstanding anything to the contrary in the Employment Agreement, the actions described in this letter agreement will not, individually or in the aggregate, constitute “Good Reason” under the Employment Agreement. You also hereby confirm that you are not compelled to accept the Furlough Period, the Reduced Base Pay and/or the 2020 Bonus provisions described in this letter, and are doing so out of your own volition in an effort to assist Novanta.
Please indicate your agreement with these terms of this letter agreement by signing and dating this letter below.
Sincerely,
NOVANTA, INC.
/s/ Stephen W. Bershad |
Stephen W. Bershad
Title: Chairman of the Board
Agreed and accepted, dated May 8, 2020:
/s/ Robert J. Buckley |
Robert J. Buckley
Exhibit 10.3
May 8, 2020
Re: |
Furlough and Temporary Compensation Reduction |
Dear Brian:
Novanta, Inc. (the “Company” or “Novanta”) is facing business and financial challenges in light of the current COVID-19 global pandemic. As we all wish to provide Novanta the opportunity to extend its available resources, you have agreed to a reduction in your services and compensation as set forth in your Employment Agreement, dated April 21, 2017. Accordingly, effective on May 8, 2020, you have agreed to the following:
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1. |
You will be furloughed for (a) a one-week period designated by the Company that will take place in the second quarter of fiscal year 2020 and (b) a one-week period designated by the Company that will take place in the third quarter of fiscal year 2020 (the two weeks together, the “Furlough Period”). During the Furlough Period, you will not provide services to the Company and you will not receive your Annual Base Salary (as defined in the Employment Agreement). As a result, although your Annual Base Salary will continue to be payable at the same rate, your aggregate Base Salary in 2020 will be reduced by 1/26th of your 2019 Base Salary of $291,596 due to non-payment during the Furlough Period, and cancellation of 2020 merit increase approved by the Compensation Committee in February 2020, and your total 2020 Annual Base Salary will be $280,381 (the “Reduced Base Pay”). For the avoidance of doubt, the Reduced Base Pay shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), your full 2020 Annual Base Salary ($315,000) approved by the Compensation Committee in February 2020 would apply. |
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2. |
You will not be paid any Annual Bonus (as defined in the Employment Agreement) with respect to the fiscal year 2020 (the “2020 Bonus”), as presented and approved by the Compensation Committee in February 2020. For the avoidance of doubt, the bonus elimination shall not be applied to any severance compensation contained in the Employment Agreement, including any enhanced severance in connection with a Change in Control (as defined in the Employment Agreement). In the event of a termination of employment (including any termination in connection with a Change in Control), the 2020 bonus ($189,000, or 60% of your 2020 Annual Base Salary) approved by the Compensation Committee in February 2020 would apply. |
Except as set forth in this letter agreement, all other terms and conditions of your Employment Agreement shall remain in full force and effect. This letter agreement is entered into without reliance on any promise or representation other than those expressly contained herein. You hereby waive any notice period set forth in your Employment Agreement or otherwise for the changes set forth herein. You hereby agree that, notwithstanding anything to the contrary in the Employment Agreement, the actions described in this letter agreement will not, individually or in the aggregate, constitute “Good Reason” under the Employment Agreement. You also hereby confirm that you are not compelled to accept the Furlough Period, the Reduced Base Pay and/or the 2020 Bonus provisions described in this letter, and are doing so out of your own volition in an effort to assist Novanta.
Please indicate your agreement with these terms of this letter agreement by signing and dating this letter below.
Sincerely,
NOVANTA, INC.
/s/ Stephen W. Bershad |
Stephen W. Bershad
Title: Chairman of the Board
Agreed and accepted, dated May 8, 2020:
/s/ Brian S. Young |
Brian Young
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