| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
As previously announced, the Board of Directors of Crane Holdings, Co. (the “Company”) has approved a plan to pursue a separation into two independent, publicly-traded companies (the “Separation”). Upon completion of the Separation, the Company’s Payment and Merchandising Technologies business will become Crane NXT, one of the independent, publicly-traded companies.
On October 5, 2022, Aaron Saak, 49 years old, was appointed to serve as Chief Executive Officer for the Crane NXT organization. In his most recent role, Mr. Saak has served as President and CEO of Mobility Solutions and President of Gilbarco Veeder-Root (GVR), a subsidiary of the Vontier Corporation (NYSE: VNT), with approximately $2 billion in revenue, 6,000 employees and sales in over 40 countries. GVR is the global technology leader serving the retail convenience market providing technologies that include point-of-sale systems, payment solutions, EV charging, digitally connected services, and field program management and repair services. Prior to leading GVR, Mr. Saak completed eight years of progressive growth with Tyco International. This included his tenure as Vice President and General Manager for the Tyco SimplexGrinnell division, a market leader in fire and security system installation and services. Additionally, Mr. Saak’s career included a ten-year tenure at General Electric with continuous expansion of roles, responsibilities, and experiences. Mr. Saak completed his B.S. in Ceramic Engineering from the University of Illinois at Urbana-Champaign, his M.S. in Industrial Engineering and Management Science from Northwestern University, and his Ph.D. in Material Science and Engineering from Northwestern University.
Mr. Saak will receive an annual base salary of $800,000, subject to annual adjustment by the Management Organization and Compensation Committee of the Board of Directors (the “Compensation Committee”), and a cash sign-on bonus of $700,000 payable in two installments and subject to Mr. Saak’s continued employment with Crane NXT. Beginning in 2023, Mr. Saak will be eligible to participate in the annual incentive plan applicable to executive officers of Crane NXT. At target performance, Mr. Saak will receive a cash payout under the annual incentive plan equal to 100% of his annual base salary. Mr. Saak’s annual incentive plan payout will be capped at 200% of target payout (or such other level as determined by the Compensation Committee).
To replace the equity compensation that will be forfeited when Mr. Saak terminates with his current employer to join Crane, Mr. Saak will receive restricted stock units having a grant date value of $2,200,000, with the restricted stock units vesting in four annual installments subject to Mr. Saak’s continued employment with Crane NXT. Mr. Saak also will be eligible for future annual equity grants under incentive compensation programs applicable to Crane NXT’s executive officers. The aggregate value of those awards will not be less than $4,000,000 for grants to be made in early 2023 as part of the 2023 long-term incentive compensation program, with amounts and forms of awards for future years to be determined by the Compensation Committee. Mr. Saak also will be eligible to participate in Crane NXT’s other benefit programs applicable to its executive officers.
If the Separation fails to close by the 18-month anniversary of Mr. Saak’s start date, the role of Chief Executive Officer Designate of Crane NXT will be eliminated, and Mr. Saak’s employment with the Company will be terminated. In that event, Mr. Saak would be eligible to receive (i) a cash severance benefit equal to two times the sum of (A) Mr. Saak’s annual base salary and (B) Mr. Saak’s target annual bonus, payable over the 24-month period following the termination of employment; (ii) a lump sum payment equal to twenty-four times the monthly cost of the Company-paid portion of certain group health insurance coverage applicable to Mr. Saak and his eligible dependents as of the date of the termination of employment; and (iii) full vesting of any Company equity awards, subject to actual performance results for the full performance periods for any awards with performance-based vesting requirements.
The foregoing is a discussion of certain terms of an offer letter entered into between the Company and Mr. Saak on October 5, 2022 (the “Offer Letter”) and is qualified in its entirety by reference to the full text of the Offer Letter, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for its fiscal year ending December 31, 2022.
On October 20, 2022, the Company issued a press release announcing, among other things, the Board’s appointment of Mr. Saak to lead the Crane NXT organization upon the effectiveness of the Company’s previously announced separation transaction. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
2
