Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 6, 2020, CECO Environmental Corp. (the “Company”) announced that, effective July 5, 2020, Mr. Dennis Sadlowski ceased serving as Chief Executive Officer and a member of the Board of Directors of the Company (the “Board”), and, effective July 6, 2020, Mr. Todd Gleason commenced serving as Chief Executive Officer and a member of the Board.
Mr. Gleason, age 49, most recently served, from April 2015 to July 2020, as President and Chief Executive Officer of Scientific Analytics Inc., a predictive analytic technologies and services company. Prior to that position, Mr. Gleason served from June 2007 to March 2015 in a number of senior officer and executive positions for Pentair plc, a water treatment company. During his tenure with Pentair, Mr. Gleason served as Senior Vice President and Corporate Officer from January 2013 to March 2015, President, Integration and Standardization from January 2010 to January 2013, and Vice President, Global Growth and Investor Relations from June 2007 to January 2010. Before joining Pentair, Mr. Gleason served as Vice President, Strategy and Investor Relations for American Standard Companies Inc. (later renamed to Trane Inc. prior to its acquisition by Ingersoll-Rand Company Limited), a global, diversified manufacturing company, and in a number of different roles (including as Chief Financial Officer, Honeywell Process Solutions) at Honeywell International Inc., a diversified technology and manufacturing company. Mr. Gleason’s qualifications to sit on the Board include his financial and business background, as well as his extensive executive and leadership experience. As the Company’s new Chief Executive Officer, Mr. Gleason will provide the Board with insight on the day-to-day operations of the Company and the issues it faces.
On July 5, 2020, the Company entered into a separation and consulting agreement (“Separation Agreement”) with Mr. Sadlowski specifying that Mr. Sadlowski’s departure from the Company is a termination without “cause” for purposes of Mr. Sadlowski’s employment agreement with the Company. Under the Separation Agreement, Mr. Sadlowski is entitled to the benefits previously negotiated under his employment agreement with the Company for a termination without cause, except that Mr. Sadlowski will be entitled to (1) up to 18 months (rather than up to 12 months) of health and welfare premium reimbursements, (2) a pro-rata 2020 annual incentive payout based on achievement of 50% of the target award (rather than actual performance), and (3) payments equal to 4 weeks of vacation pay. The Company has also agreed to provide for the reasonable transition of Mr. Sadlowski’s Company-provided executive life insurance plan to Mr. Sadlowski, and to allow Mr. Sadlowski to retain his Company-provided laptop computer and mobile phone. Pursuant to the Separation Agreement, in order to facilitate an orderly transition of CEO duties, Mr. Sadlowski has agreed to provide consulting services to the Company through December 31, 2020 at the rate of $48,917 per month.
In connection with Mr. Gleason’s appointment as the Company’s Chief Executive Officer, the Company and Mr. Gleason entered into an employment agreement effective July 6, 2020 (the “Employment Agreement”). The Employment Period has an initial term of three years (the “Employment Period”), subject to annual extensions unless the Company timely terminates such extensions. Under the Employment Agreement, the Company expects to nominate Mr. Gleason annually for election to the Board. In general terms, the Employment Agreement also provides for the following:
