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): June 27, 2014
HORIZON LINES, INC.
(Exact name of registrant as specified in its Charter)
Delaware | 001-32627 | 74-3123672 | ||
(State or Other Jurisdiction of Organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
4064 Colony Road, Suite 200
Charlotte, North Carolina 28211
(Address of Principal Executive Offices, including Zip Code)
(704) 973-7000
(Registrants telephone number, including area code)
N/A
(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:
¨ | 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.
Departure of Directors or Certain Officers
(b) On June 27, 2014, Mr. Samuel A. Woodward resigned as President and Chief Executive Officer of Horizon Lines, Inc. (the Company) and resigned as a member of the Companys board of directors. Mr. Woodwards resignations from the Company were effective June 27, 2014.
Pursuant to an agreement with the Company effective June 27, 2014, Mr. Woodward will receive (i) five months of base salary totaling $250,000 payable in accordance with regular payroll practices and (ii) continued participation for himself and his covered dependents in the Companys medical and dental benefit plans for up to eighteen months.
In consideration for the payments and other benefits accruing to Mr. Woodward under the agreement, Mr. Woodward provided the Company with a general release.
(c) Following the resignation of Mr. Woodward, the Board appointed Steven L. Rubin as Interim President and Chief Executive Officer of the Company.
Mr. Rubin has served as a Director of the Company since November 2011. He is a Principal of InterPro Advisory LLC, a consulting practice serving the intermodal industry. He has served in 2011 as the Chairman of the Board of Directors of the Intermodal Association of North America, the premier trade association representing the combined interests of the intermodal freight industry. Between 2008 and 2011, Mr. Rubin was President and CEO of TRAC Intermodal, North Americas largest chassis leasing company. Prior to joining TRAC, Mr. Rubin spent 17 years at Kawasaki Kisen Kaisha, Inc. (K Line), Japans third-largest shipping company, in a number of roles for North American operations. Mr. Rubin graduated from the University of Pennsylvania and the Wharton School with a B.A. in History and B.S. in Economics, respectively. He received his M.B.A. from the Stern School of Business at New York University, with a concentration in accounting, and obtained his Certified Public Accountant license in the state of New York.
On June 27, 2014, the Company entered into an Employment Agreement (the Agreement) with Mr. Rubin to serve as the Interim President and Chief Executive Officer. The Agreement provides that Mr. Rubin will receive a monthly base salary of $75,000. Mr. Rubin will continue to be eligible to receive annual equity compensation awards equivalent to those granted to non-employee members of the Board and will continue to vest in his outstanding equity awards as if he remained a non-employee member of the Board.
Mr. Rubin will also be eligible to participate in the standard employee benefit plans generally available to executive employees of the Company, including long-term equity incentive plans, health insurance, life and disability insurance, 401(k) plan, and paid time off and paid holidays or equivalent benefits. The Company will reimburse Mr. Rubin for up to $10,000 of his expenses incurred in connection with negotiating the Agreement.
The Company may terminate Mr. Rubins employment under the Agreement without cause upon ninety (90) days advance notice to Mr. Rubin. If within one year of the effective date of the Agreement, the Company provides Mr. Rubin with notice that it is terminating his employment without cause and Mr. Rubin complies with certain conditions, then the Company will pay Mr. Rubin a lump-sum amount equal to six months of base salary.
The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
10.1 | Employment Agreement, between Horizon Lines, Inc. and Steven L. Rubin |
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.
HORIZON LINES, INC. | ||||||
(Registrant) | ||||||
Date: July 1, 2014 | By: | /s/ Michael T. Avara | ||||
Michael T. Avara | ||||||
Executive Vice President and Chief Financial Officer |
EXHIBITS
10.1 | Employment Agreement, between Horizon Lines, Inc. and Steven L. Rubin |
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement) is entered into by and between Horizon Lines, Inc., a Delaware corporation (the Company), and Steven L. Rubin (Executive).
WHEREAS, prior to the Effective Date (as defined below), Executive has served as a non-employee member of the Companys Board of Directors (the Board); and
WHEREAS, the Company has determined that it is in the best interests of the Company and its stockholders to enter into an employment agreement with Executive for Executive to serve as the Companys Interim President and Chief Executive Officer and Executive is willing to serve as Interim President and Chief Executive Officer of the Company, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, it is hereby covenanted and agreed by Executive and the Company as follows:
1. Employment.
(a) Term. Effective June 27, 2014, Executive shall be appointed by the Board and thereafter be employed as Interim President and Chief Executive Officer of the Company. Such date will be the Effective Date of this Agreement. Executives employment under this Agreement shall commence as of the Effective Date and end when such employment is terminated by one of the parties in accordance with Section 5 below (the Employment Term).
(b) Duties. Executive shall report solely to the Board and shall perform his duties faithfully and efficiently and to the best of his abilities, subject to the directions of the Board. Executive shall devote substantially all of Executives business time and efforts to the performance of Executives assigned duties for the Company. Executive shall not accept any appointment as a director or engage in any significant business activities outside of the Company. The Company shall provide Executive with an office and administrative support at the Companys headquarters commensurate with his position.
(c) Board Service. During the Employment Term, Executive shall continue to serve as a member of the Board; provided, however, that as of the Effective Date Executive shall and hereby does resign from his service as a member of the Audit Committee and Compensation Committee. Upon termination of the Employment Term, Executive shall resume service as a non-employee member of the Board.
2. Compensation.
(a) Base Salary. The Company shall pay Executive a base salary at the rate of $75,000 per month or such greater amount as the Board shall determine from time to time in its discretion (the Salary). Such Salary shall be payable in accordance with the Companys standard payroll practices for senior executives.
(b) Board Compensation and Stock Ownership Requirements. During the Employment Term, (i) Executive shall continue to receive annual equity compensation awards equivalent to those granted to non-employee members of the Board, (ii) Executive shall continue to vest in his outstanding equity awards as if he remained a non-employee member of the Board during the Employment Term and (iii) the payment of the annual cash retainer to Executive for his Board service shall be prorated to reflect only Executives service as a non-employee member of the Board for the year for which such retainer is paid. During the Employment Term, Executive shall remain subject to such stock ownership requirements applicable to non-employee members of the Board, but not to the stock ownership requirements applicable to executives of the Company.
(c) Benefits. During the Employment Term, Executive shall be eligible to participate in the employee benefit plans generally available to senior executives of the Company, to the extent Executive meets the eligibility requirements of any such plans, and, in any event, subject to the terms of the applicable plans; provided, however, that (i) except as provided in this Agreement, Executive shall not be entitled to receive any severance benefits or participate in the Companys equity compensation program generally available to senior executives of the Company and (ii) in lieu of Executives participation in the Companys group medical plan during all or any portion of the Employment Term, Executive may elect that the Company reimburse Executive for the premiums paid by Executive for the medical coverage of Executive and his dependents under the plan or policy in effect for their benefit as of the Effective Date. Executive shall be entitled to take time off for vacation or illness in accordance with the Companys policy for senior executives and to receive all other fringe benefits as are from time to time made generally available to senior executives of the Company. Nothing herein shall affect the Companys right to alter, suspend, amend or discontinue any and all of its benefit plans, fringe benefits or policies, in whole or in part, at any time with or without notice in accordance with applicable law.
(d) Legal Fees. The Company shall reimburse Executive for legal fees and expenses incurred by Executive up to $10,000 in connection with the negotiation and review of this Agreement and any documents ancillary thereto.
(e) Expense Reimbursement. During the Employment Term, the Company shall reimburse Executive, in accordance with the Companys policies and procedures, for all expenses incurred by Executive in the performance of Executives duties hereunder.
3. Federal and State Withholding. The Company shall deduct from the amounts payable to Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with Executives Form W-4 on file with the Company, and all applicable federal employment taxes.
4. Indemnification. To the fullest extent permitted by the indemnification provisions of the laws of the state or jurisdiction of the Companys incorporation in effect from time to time, and subject to the conditions thereof, the Company shall (i) indemnify Executive, as a director and officer of the Company or a trustee or fiduciary of an employee benefit plan of the Company against all liabilities and reasonable expenses that Executive may incur in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal or administrative, or investigative and whether formal or informal, because Executive is or was a director or officer of the Company or a trustee or fiduciary of such employee benefit plan, and (ii) pay for or reimburse the reasonable expenses upon submission of appropriate documentation incurred by Executive in the defense of any proceeding to which Executive is a party because Executive is or was a director or officer of the Company or a trustee or fiduciary of such employee benefit plan, including an advancement of such expenses to the extent permitted by applicable law, subject to Executives execution of any legally required repayment undertaking. The preceding indemnification right shall be in addition to, and not in lieu of, any rights to indemnification to which Executive may be entitled under the certificate of incorporation and bylaws of the Company in effect from time to time. The indemnification rights of Executive in this Section 4 are referred to below as the Indemnification Provisions. The rights of Executive under the Indemnification Provisions shall survive the cessation of Executives employment with the Company. The Company shall maintain a directors and officers liability insurance policy, or an equivalent errors and omissions liability insurance policy, covering Executive with scope, exclusions, amounts and deductibles no less favorable to the insured than those applicable to the Companys senior officers and directors on the Effective Date, or any more favorable as may be available to any other director or senior executive of the Company, while Executive is employed with the Company and thereafter until the sixth anniversary of Executives termination date.
5. Termination. Executives employment under this Agreement may be terminated by the Company or by Executive under the following circumstances:
(a) Death. Executives employment hereunder shall automatically terminate upon Executives death.
(b) Disability. If Executive becomes Disabled, the Company may terminate Executives employment. Disabled means Executives inability to perform the essential functions and duties of Executives position with the Company, with or without reasonable accommodation, as a result of any physical or mental impairment, as determined by the Board upon certification thereof by a qualified physician selected by the Board.
(c) Cause. The Company may terminate Executives employment hereunder for Cause. For purposes of this Agreement, Cause means (i) Executives willful and continued failure to attempt in good faith (other than as a result of incapacity due to mental or physical impairment) to substantially perform the duties of his position, and such failure is not remedied within thirty (30) days after receipt of written notice from the Board specifying such failure; (ii) Executives failure to attempt in good faith to carry out, or comply with, in any material respect any lawful and reasonable directive of the Board consistent with the duties of his position, which is not remedied within thirty (30) days after receipt of written notice from the Board specifying such failure; (iii) a material breach by Executive of the Companys code of ethics, which is not remedied within thirty (30) days after receipt of written notice from the Board or the Chief Executive specifying such failure; (iv) Executives conviction, plea of no contest or plea of nolo contendere, or imposition of unadjudicated probation for any felony (other than a traffic violation or arising purely as a result of Executives position with the Company); (v) Executives knowing unlawful use (including being under the influence) or possession of illegal drugs; or (vi) Executives commission of an act of fraud, embezzlement, misappropriation, willful misconduct, gross negligence, or breach of fiduciary duty, in each case against the Company.
(d) Without Cause. The Company may terminate Executives employment under this Agreement without Cause upon ninety (90) days advance notice to Executive.
(e) Resignation. Executive may resign his employment upon ninety (90) day advance notice to the Company. Upon receiving such notice, the Company is entitled to make such resignation effective at any time on or prior to the resignation date proposed by Executive and such action shall not be deemed a termination without Cause.
6. Compensation Upon Termination. Subject to Section 2(b), upon the termination of Executives employment, Executive (or his estate, heirs or beneficiaries, as applicable) shall be entitled to (a) payment of any earned, but unpaid Salary, (b) payment of any accrued but unused vacation or paid time off, and (c) other employee benefits to which Executive is entitled upon termination of employment in accordance with the terms of the applicable plans and programs of the Company. In addition, if within one year of the Effective Date of this Agreement the Company provides executive with notice that it is terminating Executives employment without Cause, Executive continues to comply with this Agreement, Executive continues to work until the end of the notice period and Executive signs within forty-five (45) days of receipt from the Company and does not revoke a release of claims against the Company, and its affiliates, as well as its respective present and former officers, directors, managers, owners, employees, agents, benefit
plans, successors, predecessors and assigns, in form and substance satisfactory to the Company (the Release), then the Company will pay Executive a lump sum amount equal to six months of Executives Salary to Executive (the Severance Payment). If the conditions described above are satisfied, the Severance Payment will be paid to Executive on the sixtieth (60th) day after the date on which his employment terminated. Executive shall not be entitled to any severance should the Company provide notice it intends to terminate Executives employment without Cause more than one year after the Effective Date of this Agreement.
7. Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed given when (a) delivered personally or by overnight courier to the following address of the other parties hereto (or such other address for such parties as shall be specified by notice given pursuant to this Section) or (b) sent by facsimile to the following facsimile number of the other parties hereto (or such other facsimile number for such parties as shall be specified by notice given pursuant to this Section), with the confirmatory copy delivered by overnight courier to the address of such parties pursuant to this Section 7.
If to the Company, to:
Horizon Lines, Inc.
4064 Colony Road, Suite 200
Charlotte, North Carolina 28211
Facsimile: (704) 973-7010
Attention: Board of Directors, Chairman
with a copy to:
Horizon Lines, Inc.
4064 Colony Road, Suite 200
Charlotte, North Carolina 28211
Facsimile: (704) 973-7010
Attention: General Counsel
If to Executive, to:
Last address in records of Company
or to such other address as may have been furnished by a party hereto to the other party hereto, by like notice.
8. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
9. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.
10. Successors and Assigns. This Agreement shall be enforceable by Executive and Executives heirs, executors, administrators and legal representatives, and by the Company and its successors and assigns. The Company shall have the right to assign or transfer this Agreement to any affiliated entity or any successor, and Executive irrevocably consents to any such assignment or transfer. Executive may not assign this Agreement and any such assignment shall be null and void.
11. Governing Law. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Delaware, without reference to principles of conflicts or choice of law under which the law of any other jurisdiction would apply.
12. Disputes. Any dispute or controversy arising under, out of, in connection with or in relation to this Agreement shall, at the election and upon written demand of any party to this Agreement, be finally determined and settled by arbitration in Charlotte, North Carolina, or any other location mutually agreed upon by the parties, in accordance with the rules and procedures of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof.
13. Section 409A of the Code. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), and shall be interpreted and construed consistently with such intent. The payments to Executive pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4). In the event the terms of this Agreement would subject Executive to taxes or penalties under Section 409A of the Code (409A Penalties), the Company and Executive shall cooperate diligently to amend the terms of the Agreement to avoid such 409A Penalties, to the extent possible. Any reimbursement or advancement payable to Executive pursuant to this Agreement shall be conditioned on the submission by Executive of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Executive within 30 days following receipt of such expense reports, but in no event later than the last day of the
calendar year following the calendar year in which Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this Agreement shall not be subject to liquidation or exchange for any other benefit.
14. Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.
15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
HORIZON LINES, INC. | ||
By: |
| |
Jeffrey A. Brodsky | ||
Chairman, Board of Directors | ||
EXECUTIVE | ||
| ||
Steven L. Rubin |