Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
As previously reported, on July 12, 2019, Tower International, Inc., a
Delaware corporation (the
Company
), entered into an Agreement and Plan of Merger (the
Merger Agreement
) with Autokiniton US Holdings, Inc., a Delaware corporation (
Parent
), and Tiger Merger
Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (
Merger Sub
). Pursuant to the terms of the Merger Agreement and the transactions contemplated thereby, subject to the satisfaction or waiver of
certain customary conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company surviving as a direct wholly owned subsidiary of Parent (the
Merger
).
Immediately prior to executing the Merger Agreement, on July 12, 2019, the Company entered into agreements with James C. Gouin, the
Companys President and Chief Executive Officer, Jeffrey Kersten, the Companys Executive Vice President and Chief Financial Officer, and Nanette Dudek, the Companys Vice President Legal Affairs and Compliance and Corporate
Secretary, that amend their respective employment agreements with the Company (each an
Amendatory Agreement
).
The
existing employment agreements between the Company and each of Messrs. Gouin and Kersten provide for payment of certain severance pay and benefits in the event that their employment with the Company is involuntarily terminated without
cause or if they resign for good reason within two years following a change in control (as defined in their respective employment agreements). The Amendatory Agreements clarify that Messrs. Gouin and Kersten will
have good reason to resign if, in connection with or following a change in control (such as the Merger), shares of common stock, par value $0.01 per share, of the Company (the
Shares
) cease to be publicly-traded on a
national securities exchange (unless they become (or continue as) the chief executive officer or chief financial officer, respectively, of the ultimate parent entity of, or successor to, the Company, and the common stock of such parent entity or
successor, as applicable, is publicly traded on a national securities exchange).
The Amendatory Agreements provide that in the event that
Mr. Gouin or Ms. Dudek incur an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the
Code
), in connection with payments and benefits payable to them in connection with a change in
control of the Company, the Company will provide each with a tax
gross-up
payment to the extent necessary to put them in the same
after-tax
position as they would have
been in had they not incurred an excise tax under Section 4999 of the Code. This tax
gross-up
will cease to apply if (i) the Merger Agreement terminates without consummation of the Merger, and
(ii) no other change in control (as defined in their respective employment agreements) occurs as a result of a definitive transaction agreement entered into by the Company on or before December 31, 2019.
The Amendatory Agreement to Ms. Dudeks employment agreement provides for Ms. Dudek to receive a lump sum retention payment
should she remain employed with the Company (or a successor) for one year following a change in control of the Company. The retention payment is equal to the amount of the severance pay she would be entitled to receive under her
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