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): October 25, 2016
Aerojet Rocketdyne Holdings, Inc. | ||
(Exact name of registrant as specified in its charter) | ||
Delaware | 1-01520 | 34-0244000 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
222 N. Sepulveda Blvd, Suite 500 El Segundo, California |
90245 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (310) 252-8100
2001 Aerojet Road Rancho Cordova, California 95742 |
(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. |
On October 25, 2016, Aerojet Rocketdyne Holdings, Inc. (the “Company”) announced the appointment of Paul R. Lundstrom as the Company’s Vice President of Finance and Chief Financial Officer, effective November 7, 2016. Kathleen E. Redd, the Company’s current Chief Financial Officer, will assist Mr. Lundstrom in this transition and continue to support the Company through the filing of its 2016 Annual Report.
Mr. Lundstrom, 41, joins the Company from United Technologies Corporation (“UTC”) where he most recently served as the vice president of Investor Relations. He joined UTC in 1997. In his prior positions, he was the vice president of finance for the Building & Industrial Systems and Climate, Controls & Security businesses in Asia and the vice president of finance for UTC’s Carrier commercial HVAC business in North America. Before moving to Carrier in 2006, Mr. Lundstrom worked in UTC’s aerospace and defense business, Hamilton Sundstrand. He received his Master of Business Administration from Columbia University, and his Bachelor of Science from Truman State University. Mr. Lundstrom is a Certified Public Accountant.
Mr. Lundstrom does not have any family relationships with any of the directors, executive officers, or any people nominated or chosen by the Company to become a director or executive officer. Mr. Lundstrom is not a party to any transactions listed in Item 404(a) of Regulation S-K.
Pursuant to the terms of Mr. Lundstrom’s offer letter, attached hereto as Exhibit 10.1, he will receive an annual base salary of $430,000 and will also be eligible to receive the following: (i) an annual target incentive opportunity of 65% of base salary, (ii) a long-term incentive target of 135% of base salary, (iii) relocation assistance, (iv) a cash sign on bonus of $100,000, and (v) three (3) weeks of paid time off per annum. Additionally, consistent with the terms of Mr. Lundstrom’s offer letter, Mr. Lundstrom will be granted 40,000 restricted shares of the Company’s common stock effective as of the date his employment begins. These shares will vest ratably in tranches of one-third on the anniversary of the grant date over three years.
The foregoing description of Mr. Lundstrom’s offer letter does not purport to be complete and is qualified in its entirety by reference to the offer letter, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 8.01 | Other Events. |
On October 25, 2016, the Company issued a press release announcing the appointment of Paul R. Lundstrom to serve as the Company’s Vice President of Finance and Chief Financial Officer beginning on November 7, 2016. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits | |
Exhibit No. | Exhibits | |
10.1 | Offer Letter between Aerojet Rocketdyne Holdings, Inc. and Paul R. Lundstrom, dated September 27, 2016. |
99.1 | Press Release, dated October 25, 2016. |
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.
October 25, 2016 | AEROJET ROCKETDYNE HOLDINGS, INC. | ||
By: |
/s/ Arjun L. Kampani | ||
Name: | Arjun L. Kampani | ||
Title: | Vice President, General Counsel and Secretary |
Exhibit 10.1
P O Box 13222
Sacramento CA 95813-6000
Tel: 916-355-4708
Email: Michael.Bunter@rocket.com
Mike Bunter
Senior Director, Human Resources
September 27, 2016
Paul Lundstrom
PMB 123
304 W. Main St.
Avon, CT 06001
Dear Paul:
Per our discussions, please accept our offer of employment to you.
Position and Base Salary
We are pleased to extend an offer of full-time employment as Chief Financial Officer for Aerojet Rocketdyne Holdings, Inc. (Aerojet Rocketdyne); this position is classified as Exempt. Your unique skills and experience will be an asset to Aerojet Rocketdyne, and we believe that our company offers you a challenging and rewarding opportunity. Your starting salary will be $16,538.46 paid bi-weekly ($430,000 annually) in accordance with the standard payroll practices of the Company and subject to all withholdings and deductions as required by law. You will report to Eileen Drake, Chief Executive Officer and President. Your work location will be our El Segundo, CA office. Your start date is scheduled for November 7, 2016.
Variable Compensation
As part of your annual total cash compensation, you will be eligible to participate in the Aerojet Rocketdyne Annual Incentive Plan (AIP). Your target annual incentive is 65% of your base salary. Incentive plan payments are contingent upon the financial performance of Aerojet Rocketdyne and Aerojet Rocketdyne Holdings Inc. and your incentive may vary above or below the target level. You will be eligible for a pro-rated bonus for fiscal year 2016 based on your date of hire. Your eligibility to participate in the program is at the discretion of management. Aerojet Rocketdyne may modify, change or cancel any of the AIP, and may adjust any individual payment during the performance period or at any time prior to the payment date.
You will also be eligible to participate in the long-term incentive program (LTIP) under the Amended and Restated 2009 Equity and Performance Incentive Plan as approved by the Board of Directors. Long term incentive grants are normally made during Aerojet Rocketdyne Holdings Inc.’s second fiscal quarter. Your long-term incentive target is 135% of your base salary. Your first grant under the LTIP will be in the March / April 2017 time frame with vesting scheduled for the first quarter of 2020.
Paul Lundstrom
September 27, 2016
Page 2
Sign on Equity Grant
You will be granted 40,000 restricted shares of Aerojet Rocketdyne stock effective as of the date your employment begins (the “grant date”). This equity grant will vest ratably in tranches of one-third on the anniversary of the grant date over three years. If you are terminated by Aerojet Rocketdyne for any reason, other than for cause, within the first twenty four (24) months of employment, any unvested shares from your sign on equity grant will be vested immediately upon your date of termination.
Cash Sign on Bonus
You will be advanced $100,000 (less required taxes and withholdings) as a one time hiring incentive, paid to you within thirty (30) days of your start date or as soon thereafter as is administratively practical.
If your employment is terminated by the Company for Cause or if you terminate your employment voluntarily prior to twelve (12) months of your start date, you agree to repay the full amount of the signing bonus within 30 days following your termination date.
Relocation Assistance
To assist you with your relocation to the Los Angeles, CA area, we are offering you the benefits outlined in the enclosed relocation summary. Following your written acceptance of our offer, a Brookfield Global Relocation Services representative will contact you to initiate your move. We will provide you with commuter benefits equivalent to a trip home every week until your family joins you in the Los Angeles area in December 2016.
Additionally, Aerojet Rocketdyne will provide a loss on sale and / or guaranteed buyout provision on the sale of your home in Connecticut with the following terms:
A loss on sale is defined as the difference between the documented original purchase price and final selling price as indicated on the legally executed settlement statements. This provision does not provide loss reimbursement of capital improvements. In order to be eligible to receive this reimbursement, you must actively market your home as noted above, and the sales price must reflect current market values for the area. This loss on sale benefit will be grossed up for federal and state income taxes in a manner consistent with IRS rulings to reasonably offset taxes paid by you. The tax assistance is intended to be an approximation of your tax liability and is not intended to be an exact calculation.
You should be aware that all payments for any and all costs associated with relocation shall be repaid to Aerojet Rocketdyne should you resign or be terminated for cause within eighteen (18) months of your start date.
Vacation Time
You will accrue paid vacation time at the rate of three weeks (120 hours) per year.
Paul Lundstrom
September 27, 2016
Page 3
Offer Terms and Conditions
Aerojet Rocketdyne reserves the right to revoke this offer at any time before employment begins. In addition, due to the nature of the work being performed at Aerojet Rocketdyne, we must maintain high levels of health, safety, and security. All offers of employment are contingent upon reference checks and a background investigation as well as upon your receiving appropriate security clearances (if required), submitting to a post-offer medical evaluation as determined by the position’s physical, safety and environmental requirements, and demonstrating your ability to satisfy the physical requirements of the job. Testing for substance abuse is part of our post-offer screening. Aerojet Rocketdyne will not hire individuals who test positive for use of illegal drugs or improperly used legal drugs.
A representative from Aerojet Rocketdyne will phone and/or email you regarding the specific date, time, and other details of your drug test and medical evaluation, which will be scheduled with a doctor or occupational health clinic in your area.
Your start date is presently scheduled for November 7, 2016 pending completion of all of our post-offer screening processes and reference checks. On your first day, please report to the main lobby of our El Segundo, CA facility at 222 N. Sepulveda Blvd, El Segundo, CA 90245.
As an employee of Aerojet Rocketdyne, it is necessary that you agree to conform to the rules and regulations of the Company. We also require you to acknowledge, by signing in the space provided below, that your employment with Aerojet Rocketdyne is at-will. This means your employment can be terminated, with or without cause, and with or without notice, at any time, at your option or at Aerojet Rocketdyne’s option. Although other terms and conditions of employment may change, this at-will employment will remain in effect throughout your employment with the Company, unless it is modified by an express written employment contract for a specified term which is signed by you and an officer of Aerojet Rocketdyne. Your signature further indicates that you agree that this letter incorporates all of the elements of our employment offer, and no agreement which is contrary to any of the matters stated in this offer letter shall be effective unless it is contained in a specific, express written contract which is signed by an authorized officer of the Company and you.
We also require you to sign the enclosed copy of our mutual agreement to arbitrate claims, which provides an expedited, impartial dispute resolution procedure for any claims that may arise during or following your employment with Aerojet Rocketdyne. By signing this offer and the mutual agreement to arbitrate claims, you are agreeing to have your claims ruled on by an impartial arbitrator and are waiving the right to a civil trial before a judge or jury.
Our offer is contingent upon your completing, signing and returning all of the enclosed documents. A checklist and a return envelope are included for your convenience.
Because the position you are being offered requires eligibility for a U.S. security clearance, you will be required to provide proof of U.S. citizenship on your first day of work. You may provide this proof in one of the following required forms (please bring your documents with you on your start date):
Paul Lundstrom
September 27, 2016
Page 4
Additionally, Aerojet Rocketdyne is required by Federal law to verify all new employees’ legal right to work in the United States. Our offer is conditioned upon your providing this proof. It is not necessary to provide proof now, but you must provide proof of your legal right to work in the United States on your first day of work. The documents described in the enclosed list are acceptable for this purpose. If you will have any difficulty providing this documentation on your start date, please notify us immediately.
Eileen Drake and I are pleased to welcome you to the Aerojet Rocketdyne team. If you have any questions, please feel free to contact me at (916) 355-4708. Aerojet Rocketdyne is an exciting place to work and an environment in which your contributions will be valued. We look forward to having you on our team.
Please respond to our offer no later than October 4, 2016
Sincerely,
Mike Bunter
Senior Director, Human Resources
Enclosures
OFFER ACCEPTANCE ______________________ DATE _________________________
Exhibit 99.1
Contact: Glenn Mahone, Aerojet Rocketdyne, 202-302-9941
Glenn.Mahone@Rocket.com
Lynn Machon, Aerojet Rocketdyne, 916-355-3587
Lynn.Machon@Rocket.com
News Release
Aerojet Rocketdyne Holdings, Inc. Welcomes New Chief Financial Officer
SACRAMENTO, Calif., Oct. 25, 2016 (GLOBE NEWSWIRE) -- Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) today announced that Paul R. Lundstrom will join the company as vice president of Finance and chief financial officer (CFO) on Nov. 7, 2016. Lundstrom will report directly to CEO and President Eileen Drake and will be based out of the corporate headquarters in El Segundo, California.
Lundstrom, 41, previously spent 19 years with United Technologies Corporation (UTC), most recently serving as vice president of Investor Relations. In prior positions with UTC, Lundstrom was vice president of finance and CFO for the Building & Industrial Systems and Climate, Controls & Security businesses in Asia. He also served as vice president of finance and CFO for Carrier’s commercial HVAC business in North America. Before moving to Carrier in 2006, Lundstrom served in a variety of finance leadership positions for UTC’s aerospace and defense business, Hamilton Sundstrand.
“Paul brings a wealth of expertise in corporate finance and a strong track record of driving profitable growth,” said Aerojet Rocketdyne CEO and President Eileen Drake. “With his in-depth knowledge and extensive experience in financial planning, investor relations, and government and financial accounting, along with a proven focus on delivering value for shareholders, Paul will be a significant asset to our company.”
Lundstrom holds a Bachelor of Science from Truman State University, a Master of Business Administration from Columbia University, and is a Certified Public Accountant. Lundstrom succeeds Kathy Redd, who will be leaving next spring after 14 years with the company.
“I want to thank Kathy for her leadership and significant contributions to Aerojet Rocketdyne,” said Drake. “She has helped to steward our company through many transformative milestones, including the acquisition and integration of Pratt & Whitney Rocketdyne. I look forward to Kathy and Paul working together to ensure a smooth transition for our company, and our shareholders.” According to Drake, Redd will remain with Aerojet Rocketdyne through the filing of the company’s 2016 Annual Report.
Aerojet Rocketdyne Holdings, Inc. is an innovative company delivering solutions that create value for its customers in the aerospace and defense markets. The company is a world-recognized aerospace and defense leader that provides propulsion and energetics to the space, missile defense and strategic systems, tactical systems and armaments areas, in support of domestic and international markets. Additional information about Aerojet Rocketdyne can be obtained by visiting our websites at www.AerojetRocketdyne.com and www.Rocket.com.
Paul Lundstrom joins Aerojet Rocketdyne as vice president of Finance and chief financial officer on Nov. 7, 2016.