Xerium Technologies, Inc. (NYSE: XRM) (“Xerium” or the “Company”), a leading global provider of industrial consumable products and services, has just announced the grant of a restricted stock unit award of up to 600,000 shares of common stock to Mr. Mark Staton under an Inducement Restricted Stock Unit Award Agreement. In addition, the Company filed with the SEC today a Form S-8 registering the shares underlying the award. The award was offered as an inducement to Mr. Staton in connection with his commencement of employment with the Company as its President and Chief Executive Officer. The award and the Inducement Restricted Stock Unit Award Agreement were approved by the Company’s Compensation Committee of the Board of Directors in reliance on the employment inducement award exception to New York Stock Exchange Listing Rule 303A.08, which requires the public announcement of such inducement awards.
The award will vest on October 28, 2020 (“vesting date”) provided Mr. Staton has remained continuously employed with the Company through that date. The number of shares that will vest and be payable to Mr. Staton will depend on the number of shares earned between Mr. Staton’s hire date, April 28, 2017, and the vesting date (the “opportunity period”). Shares will be earned under the award based on whether the Company’s volume weighted 20-day average stock price (“average stock price”) achieves certain pre-established levels within various time periods during the opportunity period and during which the corresponding 20-day average daily dollar trading volume of Xerium common stock on the NYSE equals or exceeds $2,800,000 (“volume minimum”). For a more complete understanding of the various average stock prices and the time periods within which Mr. Staton can earn shares under this award, please refer to the Special Incentive Matrix on Exhibit A to his employment agreement, which is filed as Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on May 1, 2017. Mr. Staton can earn the maximum number of shares subject to the award if the average stock price reaches $20.00 less than 18 months after his hire date.
If Xerium experiences a Change in Control (as defined in the Company’s 2010 Equity Incentive Plan), the number of shares of common stock earned under this award will be determined based upon the stock price paid or implied in such Change in Control transaction. Those shares would be issued to Mr. Staton immediately prior to the consummation of the transaction. If Mr. Staton ceases to be employed with the Company prior to the vesting date, the award will be forfeited, except that if Mr. Staton’s employment is terminated without Cause or Mr. Staton terminates his employment for Good Reason (as those terms are defined in his employment agreement), he will be entitled to those shares earned through the date of termination and for a period of six-months thereafter.
The award is being made outside the Company’s 2010 Equity Incentive Plan but will generally be construed and administered consistent with that Plan.
ABOUT XERIUM TECHNOLOGIES
Xerium Technologies, Inc. (XRM) is a leading global provider of industrial consumable products and services. Xerium, which operates around the world under a variety of brand names, utilizes a broad portfolio of patented and proprietary technologies to provide customers with tailored solutions and products integral to production, all designed to optimize performance and reduce operational costs. With 28 manufacturing facilities in 13 countries around the world, Xerium has approximately 2,950 employees.