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): January 27, 2011
GLOBE
SPECIALTY METALS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-34420
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20-2055624
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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One Penn
Plaza, 250 West 34th Street, Suite 4125
New York,
New York 10119
(Address
of principal executive offices and Zip Code)
(212)
798-8122
(Registrant’s
telephone number, including Area Code)
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:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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On
January 27, 2011, Globe Specialty Metals, Inc. (the “Company”) and Mr. Alan
Kestenbaum, the Company’s Executive Chairman, entered into an employment
agreement, following approval by the Compensation Committee of the Company’s
Board of Directors. In accordance with the agreement, Mr. Kestenbaum
will continue to serve as the Company’s Executive Chairman. The agreement also
provides that throughout the term of the agreement, the Company shall seek
election of Mr. Kestenbaum to the Company’s Board of Directors. The agreement
provides for a four-year term, effective as of November 13, 2010 (the
“Commencement Date”). At the end of the term, the term will
automatically be extended for successive one year periods, unless either the
Company or Mr. Kestenbaum has provided the other with at least 90 days prior
written notice of its or his intention to allow the agreement to
expire.
Mr.
Kestenbaum’s annual base salary shall be $995,000, subject to any increase as
determined by the Compensation Committee. Upon entering the agreement, the
Compensation Committee also awarded Mr. Kestenbaum 108,578 shares of restricted
common stock, which vest on the tenth anniversary of the Commencement Date if
Mr. Kestenbaum is then employed by the Company, subject to earlier vesting and
delivery in certain circumstances described below (the “Long Term Award”). Mr.
Kestenbaum is eligible for an annual bonus pursuant to the Company’s 2010 Annual
Executive Bonus Plan and other bonuses, stock options and/or other stock
benefits at the discretion of the Board (“Incentive Awards”). Furthermore, Mr.
Kestenbaum is entitled to certain insurance and leave benefits and is eligible
to participate in all other employee benefit plans and programs offered by the
Company to its senior executives generally, in accordance with the terms of
those plans and programs.
Under the
agreement, “good reason” means: (i) a material reduction of compensation, (ii)
the assignment of duties substantially inconsistent with, or a reduction of, Mr.
Kestenbaum’s responsibilities then in effect (including failing to be elected as
a member of the Board), (iii) the Company relocating its principal executive
offices or his place of employment outside of New York City, (iv) a requirement
that Mr. Kestenbaum report to anyone other than the Board or (v) a material
breach of the agreement, and “cause” means (i) the commission of a felony
causing material harm to the Company or any crime involving material fraud or
embezzlement with respect to the Company’s property or (ii) a breach of the
agreement after written notice and thirty days opportunity to cure.
If Mr.
Kestenbaum’s employment terminates by reason of his death or disability, he
would be entitled to (i) payment of accrued and unpaid base pay, (ii) payment of
all vested and unvested Incentive Awards, (iii) payment of pro rata Incentive
Awards for the then current plan year and (iv) full vesting of the Long Term
Award. If Mr. Kestenbaum’s employment is terminated without cause or if he
resigns for good reason, he would be entitled to receive the foregoing items
plus a lump sum severance payment comprised of (a) twice his base pay and (b)
the value of any Incentive Awards granted or vested during the last two calendar
years, with the value of any shares subject to such awards valued as of the date
of employment termination, and the pre-tax cost of two-years' COBRA coverage for
himself and his family under the Company’s health plans. Nonrenewal of the term
by the Company shall be treated as a termination without
cause. Receipt of the severance amounts is conditioned on Mr.
Kestenbaum’s execution of a release of claims against the Company. If
his employment is terminated for cause or he resigns without good reason, he
would be entitled to receive payment of accrued and unpaid base pay and payment
of vested Incentive Awards.
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In
addition, if Mr. Kestenbaum’s employment is terminated by the Company during the
six-month period before or the two-year period after a change of control of the
Company as defined in the agreement (the “Protection Period”) (other than for
cause, disability or as a result of his death), or if he terminates his
employment during the Protection Period for good reason, Mr. Kestenbaum shall be
entitled to the same payments as upon termination without cause or for good
reason, except that the lump sum severance payment shall be an amount equal to
one dollar less than three times the sum of his average base pay and his average
Incentive Awards for the past five years. If the payments to Mr. Kestenbaum upon
termination following a change of control would be subject to the excise tax
under Section 4999 of the Internal Revenue Code, a nationally recognized
certified public accounting firm selected by the Company shall determine whether
to reduce the payments so that the value shall not exceed the safe harbor amount
specified in Section 280G(b)(3) of the Code. The payments shall be
reduced if the accounting firm determines that Mr. Kestenbaum would receive a
greater net-after tax amount if the aggregate payments were so
reduced.
The
agreement provides Mr. Kestenbaum with rights to indemnification from the
Company with respect to claims arising from or relating to his performance of
his duties.
The
agreement requires Mr. Kestenbaum to protect the confidentiality of the
Company’s proprietary and confidential information and it further provides, if
he is terminated for cause, resigns without good reason or is terminated or
resigns in connection with a change of control, that for two years after
termination he will not (i) directly compete with the Company or its affiliates,
(ii) solicit, divert or take away the business of the Company’s or its
affiliates’ customers or prospective customers for similar products, (iii)
solicit the Company’s or its affiliates’ employees to terminate their
relationship with the Company or (iv) hire any person who was an employee of the
Company or its affiliate within six months prior to the time such person is
proposed to be hired.
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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.
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GLOBE
SPECIALTY METALS,
INC.
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Dated:
February 1, 2011
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By:
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/s/
Stephen Lebowitz
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Stephen
Lebowitz
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Chief
Legal Officer
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