Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
(b) Ampco-Pittsburgh Corporation (the
Corporation) previously announced on October 3, 2017, that John S. Stanik, the Corporations Chief Executive Officer, informed the Board of Directors of the Corporation (the Board) of his impending retirement
in 2018, at such a time when a successor is identified and appointed. Mr. Stanik has now confirmed the effective date of his retirement as June 30, 2018.
(c) On June 25, 2018, the Corporation announced that the Board has appointed J. Brett McBrayer as the
Corporations Chief Executive Officer, effective July 1, 2018. Mr. McBrayer, age 52, served as President and CEO of Airtex Products and ASC Industries, a global fuel and water pump manufacturer, from 2012 through
April of 2017, when he resigned. From 2011 to 2012, Mr. McBrayer served as Vice President & General Manager of the Alcan Cable business of Rio Tinto Alcan (RTA), the world leader in finding, mining, and
processing of mineral resources. Prior to RTA, Mr. McBrayer worked at Precision Castparts Corporation and Alcoa, Inc., in various capacities with increasing responsibility.
Mr. McBrayer also will serve as a member of the Board, effective July 1, 2018. Mr. McBrayer has been elected to the class of
directors having a term of office expiring in 2021. Mr. McBrayers experience in global industrial businesses and his broad leadership experience led the Board to conclude that he should serve as a director.
In connection with Mr. McBrayers appointment as the Corporations Chief Executive Officer, the Corporation and
Mr. McBrayer entered into an offer letter (the Offer Letter), setting forth the terms of Mr. McBrayers employment. Pursuant to the terms set forth in the Offer Letter, Mr. McBrayer will receive:
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annual base salary of $550,000;
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participation in the Corporations short- and long-term incentive compensation programs, subject to such terms and conditions as the Compensation Committee of the Board shall determine from time to time;
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a
one-time
signing cash bonus of $100,000 and a grant of 12,000 restricted stock units that vest ratably over two years; and
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participation in benefit plans and programs generally offered by the Corporation to salaried employees.
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In the event of a termination of Mr. McBrayers employment by the Corporation other than for cause (as such term is
defined in the Offer Letter), Mr. McBrayer will be entitled to receive severance pay in the amount equal to either 18 months of base salary, if the termination occurs within 18 months of July 1, 2018, or 12 months of base
salary, if the termination occurs after such initial
18-month
period.
In accordance with the Corporations policy for director compensation, as an employee of the
Corporation, Mr. McBrayer will not receive separate compensation in connection with his service as a member of the Board.
The
foregoing description of the material terms of the Offer Letter is not intended to be a complete description thereof and is qualified in its entirety by reference to the full text of the Offer Letter, which is filed as Exhibit 10.1 hereto and
incorporated by reference herein.
In connection with Mr. McBrayers employment, the Board has also approved a Change in Control
Agreement between Mr. McBrayer and the Corporation, to become effective as of July 1, 2018. The agreement provides, among other things, that, subject to the terms and conditions set forth in the agreement, in the event of a change in
control of the Corporation (as such term is defined in the agreement), followed by a termination of Mr. McBrayers employment with the Corporation within 24 months of the change in control, Mr. McBrayer will be entitled to
receive a severance payment in the amount equal to the sum of (i) three times the annual base salary either at the time of the change in control or at termination, whichever is higher, and (ii) three times the bonus paid for the prior
year, in addition to certain other benefits.
The foregoing description of the material terms of the Change in Control Agreement is not
intended to be a complete description thereof and is qualified in its entirety by reference to the full text of the Change in Control Agreement, which will be filed as an exhibit to the Corporations Quarterly Report on
Form 10-Q
for the quarter ending on June 30, 2018.
On June 25, 2018, the Corporation
issued a press release announcing Mr. Staniks retirement and the appointment of Mr. McBrayer as the Corporations Chief Executive Officer. A copy of the press release is filed as Exhibit 99.1 to this report. The information
in the press release shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be
incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
(e) On June 21, 2018, upon the recommendation of the Compensation Committee, the Board adopted the
Ampco-Pittsburgh Corporation Executive Severance Plan (the Executive Severance Plan), effective June 21, 2018, for key executive officers of the Corporation, other than its Chief Executive Officer. The Executive Severance Plan does
not provide any severance benefits to the Chief Executive Officer of the Corporation, as such benefits are provided to him under the Offer Letter, described in Item 5.02(b) of this Current Report.
In the event of a termination by the Corporation without cause or by a participant for good reason, the participant,
upon execution of a general release of liability against the Corporation and subject to compliance with applicable post-termination restrictive covenants and other obligations, will generally be eligible to receive:
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an amount equal to the sum of his or her then-current annual base salary and the average annual cash incentive bonus paid to the participant for the three fiscal years immediately preceding the termination date;
provided that (i) if the participant has been employed for fewer than three years, the average will be based on the applicable number of years (one or two), and (ii) if the termination occurs in the first year of employment, no bonus
amount shall be included; and
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payment by the Corporation of the participants COBRA premiums, less the amount that the participant would be required to contribute for such healthcare coverage if the participant were an active employee for a
period ending upon the earlier of (x) 12 months and (y) the date on which the participant becomes entitled to comparable welfare benefits from another employer subject to the Participants proper election to continue healthcare
coverage under COBRA.
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The above description is a summary of the terms of the Executive Severance Plan and is subject to and
qualified in its entirety by the terms of the Executive Severance Plan, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.