sif-20240624FALSE000009016800000901682023-01-312023-01-31
UNITED STATES
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) – June 24, 2024
SIFCO Industries, Inc.
(Exact name of registrant as specified in its charter)
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Ohio | | 1-5978 | | 34-0553950 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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970 East 64th Street, Cleveland Ohio | | 44103 |
(Address of principal executive offices) | | (ZIP Code) |
Registrant’s telephone number, including area code: (216) 881-8600
N.A.
(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 (see General Instruction A.2. below):
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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)) |
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).
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Shares | | SIF | | NYSE American |
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Item 5.02 | Departure of Director or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Chief Executive Officer.
As reported on Form 8-K filed by SIFCO Industries, Inc., an Ohio corporation (the “Company”), with the Securities and Exchange Commission on May 14, 2024, Peter W. Knapper notified the board of directors (the “Board”) of the Company of his desire to retire to pursue other interests. Mr. Knapper intended to resign from his position as President and Chief Executive Officer of the Company effective as of December 31, 2024. In light of the notice delivered by Mr. Knapper, the Board commenced efforts to identify a successor to serve as Chief Executive Officer of the Company.
The Board authorized the Company to extend an offer of employment to Mr. George Scherff to succeed Mr. Knapper as Chief Executive Officer of the Company pursuant to the terms and subject to the conditions set forth in an offer letter delivered to Mr. Scherff on June 25, 2024 and accepted by Mr. Scherff on June 26, 2024 (the “Offer Letter”). Pursuant to the Offer Letter, Mr. Scherff will be appointed as the Chief Executive Officer of the Company effective as of July 8, 2024 (the “Start Date”). Commencing on the Start Date, Mr. Scherff’s annual base salary will be set at $300,000, and he will be eligible for an annual incentive cash bonus with a target amount of 35% of his base salary in accordance with the performance incentive plan of the Company. Mr. Scherff will be eligible to participate in the Company’s 401(k) plan and such other welfare benefit plans in which other Company employees are eligible to participate. Mr. Scherff will enter into a customary Non-Disclosure, Non-Solicitation and Non-Competition Agreement with the Company.
Mr. Scherff, 81, has successfully led middle-market organizations through periods of growth and transition and most recently served as a consultant, providing services to various companies with a focus on operational improvement. Mr. Scherff also served as CEO for Thermal Systems Manufacturing, Paradigm Packaging, Lund International, ABC Truck Body, and Hartzell Manufacturing following its merger with Continental Metal Specialties.
The foregoing summary of the material terms of the Offer Letter is qualified in its entirety by the terms of the Offer Letter, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Mr. Peter Knapper’s Retirement.
With Mr. Scherff stepping into the Chief Executive Officer role, Mr. Knapper will advance his retirement from his position as President and Chief Executive Officer of the Company to be effective as of July 8, 2024.
In connection with the foregoing, the Company entered into a Retirement Agreement and Release of Claims (the “Retirement Agreement”) with Mr. Knapper on June 24, 2024. Under the terms of the Retirement Agreement, the Company will continue to pay Mr. Knapper’s current Base Salary through December 31, 2024. Mr. Knapper will receive (i) a discretionary cash bonus in the amount of $125,000, which bonus shall be paid on or before November 30, 2024; and (ii) a lump sum cash payment in the amount of $45,100 paid on or before December 31, 2024. Mr. Knapper will receive no other compensation or bonus payments in connection with his employment. Mr. Knapper will continue to participate in current medical benefits through December 31, 2024 at the Company’s cost. Thereafter, he will be eligible to elect COBRA.
In consideration of Mr. Knapper’s years of service to the Company and the general release of claims and other covenants set forth in the Retirement Agreement, the Company has agreed to allow Mr. Knapper to vest in certain unvested retention share awards in accordance with the following: (i) 5,586 unvested retention shares issued during the 2022 fiscal year will vest on November 21, 2024; (ii) 3,335 unvested retention shares issued during the 2023 fiscal year will be accelerated and vest on December 31, 2024; and (iii) 3,330 unvested retention shares issued during the 2024 fiscal year will be accelerated and vest on December 31, 2024.
The foregoing summary of the material terms of the Retirement Agreement is qualified in its entirety by the terms of the Retirement Agreement, a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by reference.
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Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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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| | SIFCO Industries, Inc. |
| | (Registrant) |
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Date: June 28, 2024 | | |
| | /s/ Thomas R. Kubera |
| | Thomas R. Kubera |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
DocumentJune 24, 2024
George Scherff
13032 Sorrento Wy
Bradenton, FL 34211
Dear George:
I am pleased to extend this offer of employment as the Chief Executive Officer of SIFCO Industries, Inc. (“SIFCO”). This offer is fully supported by the Board of Directors and all of the Directors look forward to working with you at SIFCO. We feel you can make a decided and immediate contribution to our company. I would like to outline for you the following terms of this employment offer:
Title: Chief Executive Officer
Start Date: July 8, 2024
Terms of Compensation: See attached Exhibit A
I am enclosing a basic summary of benefits as offered to all salaried employees of SIFCO. If you have any questions, we can arrange for a discussion with an HR representative of the company.
You will be an eligible participant in the management incentive bonus program. Commencing with fiscal 2025, you will be eligible for a target bonus at the % level of your base salary set forth on Exhibit A. Metrics and goals for 2025 have not yet been established by the Compensation Committee but will be established in the ordinary course of establishing the Company’s 2025 budget. If earned, the bonus would be payable to you on or before December 31 of that year providing you are an employee in good standing on September 30 of the bonus year.
George Scherff
June 24, 2024
Page 2
The purpose of stating a salary in this letter is to establish a rate of compensation for pay and benefits, and should not be construed in any way as an employment contract or as establishing or guaranteeing terms or tenure of employment for any specific period. Your employment is at-will.
As a condition of this employment offer, you acknowledge that prior to accepting employment with SIFCO. you have had the opportunity to read and understand the Non-Disclosure, Non-Solicitation and Non-Competition Agreement and voluntarily agree to the terms of the Agreement.
Please feel free to call me if you have any other questions about the terms of this offer.
I would like to reiterate our enthusiasm to have you join the SIFCO team. We all look forward to your contributions to SIFCO!
Sincerely,
/s/Alayne Reitman
Alayne Reitman,
Chair of the Board of Directors
SIFCO Industries, Inc.
cc: Don Molten
Mark Silk
ACKNOWLEDGED, AGREED AND ACCEPTED:
/s/George Scherff June 26, 2024
Signature: George Scherff Date
This Term Sheet is confidential and may not be disclosed to any person or entity other than the parties’ respective officers, directors, employees and professional advisors.
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| Compensation Element | Amount |
| Base Salary | •$300,000 |
| Annual Bonus | •35% target (value at target of $105,000) |
| Retirement Benefits | •401(k) plan applicable to all employees |
| Other Benefits | •Welfare benefits applicable to all employees •Annual vacation of 4 weeks |
DocumentRETIREMENT AGREEMENT AND RELEASE OF CLAIMS
This Retirement Agreement and Release of Claims (this “Agreement”) is by and between SIFCO Industries, Inc., an Ohio corporation (the “Company”), and Peter Knapper (“Executive”) (each of Executive and the Company, a “Party,” and collectively, the “Parties”), as of the date that Executive signs this Agreement.
WHEREAS, Executive has been employed by the Company as its Chief Executive Officer;
WHEREAS, Executive and the Company are parties to the Change in Control and Severance Agreement dated June 29, 2022, (the “Severance Agreement”);
WHEREAS, Executive has advised the Company that he desires to retire as Chief Executive Officer of the Company;
WHEREAS, the Company has accepted, and Executive agrees not to revoke, Executive’s resignation, which will be effective July 8, 2024;
WHEREAS, both Executive and the Company desire to resolve any differences and disputes now pending, or which may arise in the future with respect to Executive’s employment, compensation therefor, and termination thereof, and to reaffirm Executive’s post-employment obligations to the Company.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and the Company hereby acknowledge and agree as follows:
1.Termination. Executive’s employment with the Company will terminate as the result of Employee’s decision to retire and resign without “Good Reason,” as that term is defined in Section 2(f) of the Severance Agreement, as of July 8, 2024.
2.Severance Benefits. Although Executive’s retirement does not make him entitled to severance pay or benefits pursuant to the Severance Agreement, in consideration for the terms herein, Executive shall be entitled to the following payments and benefits (together, the “Severance Benefits”):
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Severance
| The Company will continue to pay Executive’s current Base Salary through December 31, 2024 in accordance with normal payroll practices, including payment for vacation accrued and unused. |
Bonus
| Executive will receive a discretionary bonus of $125,000, to be paid on or before November 30, 2024. Executive agrees and acknowledges that he is entitled to no other bonus in connection with his employment, whether for work performed in 2024 or any other year.
The Company will pay Executive a lump sum equal to $45,100 on or before December 31, 2024. |
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Benefits
| Executive will continue to participate in current medical and dental benefits through December 31, 2024, at Company’s cost. Thereafter, Executive will be eligible to elect COBRA coverage.
Executive will retain his phone and the Company will release that phone number to Executive. Executive may also retain his laptop computer. Executive agrees to provide such devices to the Company on or before July 8, 2024 for the purpose of the Company cleansing them of any Company information. |
Expenses/Belongings
| Executive shall be entitled to reimbursement for all reasonable business expenses incurred through July 8, 2024.
Executive shall be entitled to keep the forged race bearing for the LEAP engine, two forged piston heads, and the Hammer picture currently in his office. |
Vesting | Executive’s current unvested retention share awards will vest as follows: • vesting of FY2022-24 retention shares 5,586 on November 21, 2024 • accelerated stock vesting of retention shares FY23 2/3rds 3,335 shares on December 31, 2024 and FY24 1/3rd 3,330 shares vest December 31, 2024 |
3.Executive’s Release of the Company. In consideration of the mutual agreements and covenants set forth herein, Executive, with the intention of binding himself and his heirs, executors, administrators and assigns, does hereby release, remise, acquit, and forever discharge the Company, and each of its and their subsidiaries and affiliates (the “Company Affiliated Group”), their present and former officers, directors, executives, shareholders, agents, attorneys, employees and employee benefit plans (and the fiduciaries thereof), and the successors, predecessors, and assigns of each of the foregoing (collectively, the “Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees, and liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise, and whether now known or unknown, suspected or unsuspected, which Executive, individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, arising on or prior to the date hereof, against any Company Released Party, including without limitation those that arise out of, or relate to, the Severance Agreement, Executive’s employment with the Company or any of its subsidiaries and affiliates, or any termination of such employment, including claims (i) for severance or vacation benefits, unpaid wages, salary or incentive payments, (ii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm, or other tort, (iii) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning unlawful and unfair labor and employment practices), and (iv) for employment discrimination under any applicable federal, state, or local statute, provision, order, or regulation, and including, without
limitation, any claim under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Civil Rights Act of 1988, the Fair Labor Standards Act, the Americans with Disabilities Act (the “ADA”), the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment Act (the “ADEA”), and any similar or analogous state statute, excepting only:
a.rights of Executive arising under, or preserved by, this Agreement;
b.the right of Executive to receive COBRA continuation coverage in accordance with applicable law;
c.claims for benefits under any health, disability, retirement, life insurance, or other similar employee benefit plan (within the meaning of Section 3(3) of ERISA) of the Company Affiliated Group;
d.rights to indemnification that Executive has or may have under the Articles of Incorporation, Code of Regulations or By-laws of any member of the Company Affiliated Group or as an insured under any director’s and officer’s liability insurance policy now or previously in force; and
e.any matters intended to survive Executive’s termination of employment and the execution of a release as set forth in the Severance Agreement.
4.Executive acknowledges and agrees that this Agreement is not to be construed in any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied.
5.The release in Paragraph 3 of this Agreement applies to any relief no matter how called, including, without limitation, salary, bonuses, vacation, back pay, front pay, compensatory damages, liquidated damages, punitive damages, damages for pain or suffering, costs, and attorneys’ fees and expenses.
6.Executive specifically acknowledges that his acceptance of the terms of this Agreement is, among other things, a specific waiver of his rights, claims, and causes of action under Title VII, the ADEA, the ADA, and any state or local law or regulation in respect of discrimination of any kind; provided, however, that nothing herein shall be deemed, nor does anything contained herein purport, to be a waiver of any right or claim or cause of action which by law Executive is not permitted to waive.
7.Executive will not initiate, assist, testify, or consult with respect to any lawsuit involving or related to the Company Released Parties, other than for a claim brought by Executive challenging the validity of this Agreement under the ADEA, unless compelled to do so by legal process. Furthermore, Executive will indemnify the Company for all expenses and costs, including reasonable attorneys’ fees, which the Company incurs as a consequence of Executive’s breach of the covenants in this paragraph.
8.Other than with respect to information required to be disclosed by applicable law, Executive agrees not to disclose the terms of this Agreement to any person; provided, however, Executive may disclose this Agreement and/or any of its terms to Executive’s immediate family, financial advisors, and attorneys, so long as Executive instructs them not to disclose the terms of this Agreement further. Any time after this Agreement is filed with the Securities and Exchange Commission or any other government agency by the Company and becomes a public record, this provision shall no longer apply.
9.Executive acknowledges that he is entitled to a period of 21 days to consider whether to execute this Agreement. If Executive accepts the terms hereof and executes this Agreement, he may thereafter, for a period of seven days following (and not including) the date of execution, revoke his acceptance of this Agreement. If no such revocation occurs, this Agreement shall become effective and irrevocable in its entirety, and binding and enforceable against Executive, on the day next following the day on which the foregoing seven-day period has elapsed. If such a revocation occurs, Executive shall irrevocably forfeit any right to payment of the Severance Benefits.
10.Executive acknowledges and agrees that he has not, with respect to any transaction or state of facts existing prior to the date hereof, filed any complaints, charges, or lawsuits against any Company Released Party with any governmental agency, court, or tribunal.
11.Nothing in this Agreement prevents or prohibits Executive from filing a claim or charge with a government agency that is responsible for enforcing a law or from cooperating, participating, or assisting in any government agency or regulatory entity investigation or proceeding. Notwithstanding the foregoing, Employee agrees and understands that Employee will not accept or be entitled to any further personal relief, recovery, or monetary damages from any source whatsoever with respect to any claim that has been released in Paragraph 3 of this Agreement and that this Agreement shall control and is the exclusive remedy as to any of the claims released herein.
12.Executive acknowledges that he has had the opportunity to seek the advice and assistance of an attorney with regard to this Agreement, and has been given a sufficient period within which to consider this Agreement.
13.Executive acknowledges that the release in Paragraph 3 of this Agreement relates only to claims that exist as of the date of this Agreement.
14.All amounts paid to Executive under this Agreement shall be subject to withholding and other employment taxes imposed by applicable law. Executive shall be solely responsible for the payment of all taxes imposed on him relating to the payment or provision of any amounts or benefits hereunder.
15.Executive acknowledges that the Severance Benefits, as set forth in Paragraph 2 of this Agreement, he is receiving in connection with this Agreement are in addition to anything of value to which Executive is otherwise entitled to receive from the Company.
16.In the event of the expiration or other termination of this Agreement or the Severance Agreement, the respective rights and obligations of the Parties, including, without limitation, with respect to Executive’s obligations set forth in the Severance Agreement and the Non-Compete Agreement between the Company and Executive dated July 1, 2016, shall survive such expiration or other termination to the extent necessary to carry out the intentions of the Parties under the Severance Agreement, the Non-Compete Agreement and this Agreement. Any breach of Executive’s post-employment obligations under the Severance Agreement will constitute a breach of this Agreement as well, and any such breach will cause any amounts paid to Executive under this Agreement or the Severance Agreement to be recoverable by the Company and any further payments under this Agreement or the Severance Agreement to Executive not required.
17.Each provision hereof is severable from this Agreement, and if one or more provisions of this Agreement are declared invalid, the remaining provisions shall nevertheless remain in full force and effect. If any provision of this Agreement is so broad, in scope, duration, or otherwise, as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.
18.This Agreement shall inure to the benefit of, and be binding on, the successors and assigns of each of the Parties, including, without limitation, Executive’s heirs and the personal representatives of Executive’s estate and any successor to all or substantially all of the business and/or assets of the Company.
19.The name assigned this Agreement and headings of the sections, paragraphs, subparagraphs, clauses and subclauses of this Agreement are for convenience of reference only and shall not in any way affect the meaning or interpretation of any of the provisions hereof. Words of inclusion shall not be construed as terms of limitation herein, so that references to “include,” “includes,” and “including” shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations.
20.Executive acknowledges that he has read and understands this Agreement in its entirety, that he is signing it knowingly and voluntarily, and that he intends to be bound by it.
21.This Agreement constitutes the complete agreement of the Parties in respect of the subject matter hereof and shall supersede all prior agreements between the Parties in respect of the subject matter hereof except to the extent set forth herein.
22.The failure to enforce at any time any of the provisions of this Agreement or to require at any time performance by the other Party of any of the provisions hereof shall in no way be construed to be a waiver of such provisions or to affect the validity of this Agreement, or any part hereof, or the right of any Party thereafter to enforce each and every such provision in accordance with the terms of this Agreement.
23.This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Signatures delivered by facsimile shall be deemed effective for all purposes.
24.Except for issues or matters as to which federal law is applicable, this Agreement shall be construed and enforced in accordance with the laws of the State of Ohio, without giving effect to the conflicts of law principles thereof.
25.The recitals set forth at the beginning of this Agreement are incorporated into this Agreement by reference.
26.A copy of the original or of a signature to the original shall have the same force and effect as the original, and the signature of any Party may be executed through the use of a facsimile transmission or by way of a PDF (Portable Document Format) as an attachment to an Email, in which case the signature (whether by facsimile or PDF) on this Agreement shall be as effective as if an original signature were affixed to this Agreement.
IN WITNESS WHEREOF, the parties have executed multiple copies of this Agreement, each of which shall constitute an original, but all of which, when taken together, will constitute the same document.
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EXECUTIVE
/s/Peter Knapper Peter Knapper
Date: June 24, 2024 | SIFCO Industries, Inc.
By: /s/Alayne Reitman
Printed Name: Alayne Reitman
Title: Chair of the Board of Directors
Date: June 24, 2024 |
DocumentSIFCO Industries, Inc. (“SIFCO”) Announces
Appointment of George Scherff as CEO
Cleveland, OH — SIFCO Industries, Inc. (NYSE American: SIF) The Board of Directors of SIFCO, a leading supplier of forged products to the aerospace, energy, and defense markets, today announced the appointment of George Scherff as the Company’s chief executive officer ("CEO"), effective July 8, 2024. Mr. Scherff replaces Peter Knapper, who served as President and CEO since 2016 and announced his intention to retire earlier this year.
“George Scherff has decades of successful experience leading middle-market organizations that have been in periods of growth and transition, which will serve us well as we transition into a new era for SIFCO,” said Alayne Reitman, Chair of SIFCO’s Board of Directors. “We thank Pete for his service to the Company. Pete saw us through uncertain times in our industry, including the global pandemic and the supply chain challenges that followed, and he leaves us well-positioned to move forward with confidence. We wish him all the best in retirement.”
Prior to joining SIFCO, Mr. Scherff served as CEO for Thermal Systems Manufacturing, Paradigm Packaging, Lund International, ABC Truck Body, and Hartzell Manufacturing following its merger with Continental Metal Specialties. He has a bachelor’s degree from The Ohio State University and a master’s degree in mechanical engineering from the University of Toledo.
Mr. Scherff joins SIFCO at a pivotal time for the company, as new opportunities present themselves in the markets we serve. “I am excited to join SIFCO as the Company furthers its long-term goals and embraces opportunities in our industries,” he said. “I am particularly looking forward to working alongside the strong leadership team. Their keen strategic insights will prove invaluable as we move into the next phase of the Company’s growth.”
SIFCO supplies flight-critical forged components and machined assemblies to the world’s leading aircraft and engine manufacturers. These components can be found on virtually all commercial and military fixed-wing aircraft, as well as helicopters and business jets. SIFCO products are also supplied to leading steam and gas turbine manufacturers and oil producers serving the energy sector.
