UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 22, 2020 (September 21, 2020)
(Exact name of registrant as specified in its charter)
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Indicate by check mark whether the registrant is an emerging growth company as defined in 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 ☐
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of James F. Keppler as Executive Vice President, Operations
Cornerstone Building Brands, Inc. (the “Company”) today announced that its Board of Directors appointed James F. Keppler as Executive Vice President, Operations (“EVP Operations”), effective September 21, 2020. In this role, Mr. Keppler will primarily focus on the end-to-end supply chain of the products of the Company, and other duties reasonably associated with the position.
Mr. Keppler, age 53, was employed by Whirlpool Corporation (“Whirlpool”) from 2011 to 2020, where he served as Vice President, Integrated Supply Chain & Quality and was responsible for North American manufacturing, logistics, sales and operations planning, trade partner customer service, and quality functions. Prior to joining Whirlpool, Mr. Keppler served as Senior Vice President, North American Operations for International Automotive Components from 2007 to 2011, with responsibility for manufacturing operations of all facilities in the US, Canada, and Mexico. Mr. Keppler earned a master’s degree from GMI Engineering & Management Institute and a bachelor’s degree from Purdue University.
There are no family relationships between Mr. Keppler and any director or executive officer of the Company, and Mr. Keppler has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with the commencement of his employment as EVP Operations, Mr. Keppler entered into an employment agreement with the Company (the “Employment Agreement”) containing the material terms discussed below.
The term of the Employment Agreement runs for a period of one year from Mr. Keppler’s commencement of employment with the Company, subject to automatic one-year extensions thereafter, unless either party gives notice of non-renewal. The Employment Agreement provides Mr. Keppler with (i) an annual base salary of $510,000; (ii) a target annual bonus opportunity under the Company's cash annual incentive plan equal to 80% of his annual base salary, with a maximum payout of 160% of his annual base salary, based on performance goals to be established by the Compensation Committee of the Board of Directors of the Company (subject to a minimum payment of $112,899 for 2020, representing a pro rata portion of the target amount for the balance of the 2020 calendar year following his start date); (iii) initial long-term equity incentive awards, granted on September 21, 2020, having a total target grant date fair value equal to $1.7 million, comprised of stock options having a value of $450,000, restricted stock units having a value of $1,000,000 and performance share units having a value of $250,000 at “target” levels of achievement; (iv) eligibility for an annual grant of long-term incentive awards with a target value of $600,000 per year, beginning in 2021; (v) a one-time cash signing bonus equal to $250,000; and (vi) a right to participate in the Company’s employee benefit plans and perquisite programs on the same terms as other Company executives. The Employment Agreement also includes a perpetual confidentiality covenant, and customary restrictive covenants (non-competition, non-solicitation, non-disparagement, and non-interference) that apply during Mr. Keppler’s employment and for a period of one year thereafter. The initial long-term equity incentive awards granted to Mr. Keppler will generally have the same terms and conditions as apply to the same types of awards granted to the other members of senior management of the Company.
The Employment Agreement provides for severance payments and termination benefits upon a future termination of Mr. Keppler’s employment by the Company without “cause” or by Mr. Keppler for “good reason” (each, a “Qualifying Termination”). Upon a Qualifying Termination (other than within 24 months after a change in control of the Company or during the pendency of a change in control transaction), the Employment Agreement provides for: (i) payment of one times Mr. Keppler’s then-current base salary, payable in equal installments on regular payroll dates over the course of the one year period immediately following the date of termination; (ii) a pro-rated annual bonus based on actual performance in the year of termination, paid in a lump sum no later than March 15th following the year of termination; and (iii) up to twelve months of continued medical and dental COBRA coverage at active employee rates.
Upon a Qualifying Termination within 24 months following a change in control (or during the pendency of a change in control transaction), the Employment Agreement provides for: (i) the same cash severance payment due upon a qualifying termination prior to a change in control (except that, to the maximum extent practicable, such payment is to be made in a lump sum); (ii) an additional lump-sum cash severance payment in an amount equal to the sum of (x) one times the executive’s then-current base salary and (y) two times Mr. Keppler’s target annual bonus for the fiscal year in which the termination occurs; (iii) a pro-rated annual bonus payment based on actual performance in the year of termination, paid in a lump sum no later than March 15th following the year of termination; and (iv) up to eighteen months of continued medical and dental COBRA coverage at active employee rates.
In all cases, the severance payments are conditioned on Mr. Keppler executing a general release and waiver of claims.
If Mr. Keppler’s payments and benefits under the Employment Agreement are subject to the 20% excise tax under Section 4999 of the Internal Revenue Code, then he will either receive all such payments and benefits subject to the excise tax or such payments and benefits will be reduced so that the excise tax does not apply, depending on which of these two approaches yields the best after tax outcome for Mr. Keppler as determined by a third-party accounting firm.
Item 8.01. Other Events.
On September 22, 2020, the Company issued a press release to announce the appointment of Mr. Keppler as EVP Operations of the Company. A copy of the press release is attached as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |||||||
| 99.1 | ||||||||
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.
| CORNERSTONE BUILDING BRANDS, INC. | |||||||||||
| By: | /s/ Todd R. Moore | ||||||||||
| Name: | Todd R. Moore | ||||||||||
| Title: | Executive Vice President, Chief Legal, Risk & Compliance Officer, and Corporate Secretary | ||||||||||
Date: September 22, 2020
