UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): March 5, 2020

 

ART’S-WAY MANUFACTURING CO., INC.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

     

000-05131

 

42-0920725

(Commission File Number)

 

(IRS Employer

   

Identification No.)

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices) (Zip Code)

 

(712) 864-3131

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report.)

     

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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock $.01 par value

ARTW

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company     ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

Item 5.02       Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On March 5, 2020, Art’s-Way Manufacturing Co., Inc. (the “Company”) entered into an offer letter (the “Offer Letter”) with David King, pursuant to which Mr. King is expected to assume the role of Chief Executive Officer upon the anticipated resignation of Carrie Gunnerson as Chief Executive Officer of the Company in the third quarter of fiscal year 2020. Mr. King’s anticipated start date is March 23, 2020 and he will serve in an interim role prior to assuming the role of Chief Executive Officer. The Company intends to enter into a formal employment agreement with Mr. King prior to his start date.

 

Mr. King, age 48, has a proven executive management track record with over 25 years in the agricultural industry. He is currently the Executive Vice President of Sales and Marketing at VES Environmental Solutions, LLC, a designer and manufacturer of energy-efficient agricultural ventilation and lighting systems, a position he has held since November 2019. He was previously Vice President of Sales and Marketing at Salford Group from June 2013 to November 2019, and he held roles in operations, marketing and international business development at Ag Leader Technology from 1996 to June 2013. Mr. King holds a B.S. in Business Administration from Iowa State University and an M.B.A. from Drake University.

 

Mr. King was not appointed pursuant to any arrangement or understanding with any person, and Mr. King does not have any family relationships with any directors or executive officers of the Company. Mr. King has not had a direct or indirect material interest in any transaction with the Company since December 1, 2017, nor is any such transaction currently proposed, that would be reportable under Item 404(a) of Regulation S-K.

 

The Offer Letter provides for an annual base salary of $265,000. Mr. King will also be eligible to receive annual cash incentive compensation of up to 75% of his base salary based on the Company’s achievement of annual financial objectives and to receive annual equity awards, each as granted by the Board (or a committee authorized by the Board). Mr. King will be eligible to participate in any and all other employee benefit plans that are generally available to the Company’s employees.

 

The Company intends to grant Mr. King 80,000 shares of restricted stock on his start date, with the risks of forfeiture for 20,000 shares lapsing immediately and the risks of forfeiture for the remaining 60,000 shares lapsing in increments of 20,000 shares on each of the first three anniversaries of the grant date.

 

This foregoing summary does not purport to be complete and is qualified in its entirety by reference to the text of the Offer Letter, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. A copy of the Company’s press release issued March 11, 2020, announcing Mr. King’s appointment, is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01       Financial Statements and Exhibits.

 

(a)     Financial statements: None

 

(b)     Pro forma financial information: None

 

(c)     Shell Company Transactions: None

 

(d)     Exhibits:

 

10.1     Offer Letter between the Company and David King, dated March 5, 2020

 

99.1     Press Release of Art’s-Way Manufacturing Co., Inc., dated March 11, 2020

 

 

 

SIGNATURE

 

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.

 

Dated: March 11, 2020

 

 

ART’S-WAY MANUFACTURING CO., INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael W. Woods

 

 

 

Michael W. Woods

 

 

 

Chief Financial Officer

 

 

 

 

ex_176667.htm

Exhibit 10.1

BUILDING ON A TRADITION OF QUALITY

 

 

March 5, 2020

 

Attn: 

Mr. David King

  Ankeny, Iowa

    

On behalf of the board of directors of Art's Way Mfg. Co., Inc. I would like to thank you for your interest in the position of CEO. We thank you for the time you have spent in allowing us to get acquainted with you and exploring the possibility of working together. We believe that you would be an excellent choice to serve as our next CEO and would like to extend to you the following offer:

 

Chief Executive Officer

 

Base Salary: $265,000 per year

 

Bonus Plan Opportunity: maximum bonus opportunity provided in the existing bonus plan is 75% of base salary if company far exceeds financial objectives. Likely result is approximately 30% of salary (prorated from start date thru fiscal year end 11/30/20) if Bank Covenants met and target EBITDA met, per the company's existing bonus plan for key employees. Plan objectives reviewed annually.

 

Initial Stock Grant: 80,000 shares of ARTW with 20,000 vesting immediately and remainder of 60,000 vesting over 3 years, i.e. 20,000 on anniversary dates in 2021, 2022, and 2023.

 

Annual Stock Grants: quantity and vesting period determined annually by board compensation committee at each January board meeting based on performance and objectives.

 

Health Insurance Plan: opportunity to participate in the company's existing group health plan with company paying 80% of single coverage.

 

Other benefits: 401(k) 1% company match of 4% contribution, LT/ST disability plans, life insurance ($150k benefit), flex-spending account for medical expenses. Also, we offer group plans for AFLAC, dental, and vision that are employee-paid.

 

Vacation: 4 weeks per year

 

Auto: The company will furnish a company-owned vehicle of your choice of approximately $50,000 value and will cover all related expenses.

 

Relocation: $10,000 allowance upon your relocation.

 

Transition: We anticipate our current CEO remaining in place for a transition period that would extend into June 2020. During this time the expectation would be that you would spend this time learning the business and ultimately assuming all of her authorities upon her departure. We will need to explore how to manage titles during the interim overlap period, i.e. separating CEO and President titles, etc. This detail would ultimately be clarified in any press release, announcements, etc.

 

We believe that this is a great opportunity for the company and you personally and look forward to success working together in the future.

 

 

Best Regards,

 

   

Marc H. McConnell 

Chairman

Art's Way Mfg. Co., Inc.

 

Art’s-Way Manufacturing Co., Inc. P.O. Box 288 Armstrong, IA 50514-0288 Tel. 712-864-3131 Fax 712-864-3154

ex_176677.htm

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

March 11, 2020

 

ART’S WAY MANUFACTURING ANNOUNCES TRANSITION PLAN IN ANTICIPATION OF RETIREMENT BY CEO CARRIE GUNNERSON

 

ARMSTRONG, IOWA, March 11, 2020 – Art’s Way Manufacturing Co., Inc. (Nasdaq: ARTW) (the “Company”), a diversified manufacturer and distributor of equipment serving agricultural, research and steel cutting needs, announces today an anticipated Chief Executive Officer transition from Carrie Gunnerson to David King, to occur in the third quarter of 2020.

 

Carrie Gunnerson, the Company’s Chief Executive Officer since 2007, has expressed her desire to transition out of her role as Chief Executive Officer of the Company by mid-2020, pending the Company’s identification of a qualified successor.  Following an extensive search by the Board of Directors, on March 5, 2020, the Company entered into an offer letter (the “Offer Letter”) with David King, pursuant to which Mr. King is expected to assume the role of Chief Executive Officer upon the anticipated resignation of Ms. Gunnerson in the third quarter of fiscal year 2020. Mr. King’s anticipated start date is March 23, 2020 and he will serve in an interim role prior to assuming the role of Chief Executive Officer. The Company intends to enter into a formal employment agreement with Mr. King prior to his start date.

 

Mr. King has a proven executive management track record with over 25 years in the agricultural industry. He is currently the Executive Vice President of Sales and Marketing at VES Environmental Solutions, LLC, a designer and manufacturer of energy-efficient agricultural ventilation and lighting systems, a position he has held since November 2019. He was previously Vice President of Sales and Marketing at Salford Group from June 2013 to November 2019, and he held roles in operations, marketing and international business development at Ag Leader Technology from 1996 to June 2013. Mr. King holds a B.S. in Business Administration from Iowa State University and an M.B.A. from Drake University.

 

Chairman of the Art’s Way Board of Directors, Marc H. McConnell reports, “We would like to express our most sincere gratitude and appreciation for Carrie and her dedication and loyalty to Art’s Way since joining the team in 2004. She worked her way from senior accountant to CFO and eventually to CEO where she led the company through times of growth, acquisitions, and development as an organization. Through the difficult times in the ag economy and the more robust times, she led Art’s Way with a steady hand and was the ultimate stabilizing force that guided us to where we are today. The example that she set for others of work ethic, professionalism, and dedication has been second to none. During her time Carrie transformed our company in many ways and enhanced the culture of quality, customer service, innovation, and continuous improvement that are the hallmarks of a strong, enduring brand in the farm equipment industry. We cannot thank Carrie enough for what she brought to Art’s Way and the times that she put the needs of the company ahead of her own to ensure that the company would be a long term success.

 

 

 

We wish Carrie the very best in the next chapter of her life and career and also appreciate her role in allowing for us to conduct a thorough process in choosing her successor and a transition plan that will best serve the company.  We are pleased to announce that David King will be assuming the role of Chief Executive Officer upon Carrie’s resignation in the third quarter of 2020.  David brings an extensive skill set and wealth of leadership experience in our industry that we anticipate will provide for growth and long-term success for Art's Way.  We welcome David and are excited to work with him as we enter a new chapter at Art's Way.”

 

About Art’s Way Manufacturing Co., Inc.

 

Art’s Way manufactures and distributes farm machinery niche products including animal feed processing equipment, sugar beet defoliators and harvesters, land maintenance equipment, plows, hay and forage equipment, manure spreaders, reels for combines and swathers, and top and bottom drive augers, as well as modular animal confinement buildings and laboratories, and specialty tools and inserts. After-market service parts are also an important part of Art’s Way’s business. Art’s Way has three reporting segments: agricultural products; modular buildings; and tools.

 

For more information contact: Carrie Gunnerson, President and Chief Executive Officer

 

712-864-3131 

 

investorrelations@artsway-mfg.com

 

Or visit the Company's website at www.artsway-mfg.com/

 

Cautionary Statements

 

This release includes "forward-looking statements" within the meaning of the federal securities laws. Statements made in this release that are not strictly statements of historical facts, including our expectations regarding the timing of our Chief Executive Officer transition, are forward-looking statements. Statements of anticipated future results are based on current expectations and are subject to a number of risks and uncertainties, including those factors detailed from time to time in our Securities and Exchange Commission filings. Actual results may differ markedly from management's expectations. We caution readers not to place undue reliance upon any such forward-looking statements. We do not intend to update forward-looking statements other than as required by law.

 

 

 

-END-