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): December 16,
2009
CPI AEROSTRUCTURES,
INC.
(Exact
Name of Registrant as Specified in Charter)
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New
York
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1-11398
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11-2520310
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(State
or Other Jurisdiction
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(Commission
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(IRS
Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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60 Heartland Blvd.,Edgewood,
New York
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11717
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(631)
586-5200
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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 (see General Instruction A.2. below):
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))
Item
5.02 — Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
December 16, 2009, the Company entered into an amended and restated employment
agreement with Edward J. Fred, pursuant to which Mr. Fred will continue to be
employed as the Company’s President and Chief Executive Officer until December
31, 2012. Mr. Fred’s amended employment agreement provides that he
will receive a base salary (“Base Salary”) at the annual rate of: (i) $318,000
from December 16, 2009 until December 31, 2009; (ii) $337,000 from January 1,
2010 until December 31, 2010; (iii) $350,000 from January 1, 2011 until December
31, 2011; and (iv) $364,000 from January 1, 2012 until December 31, 2012. For
the years ending December 31, 2009, 2010, 2011, and 2012, Mr. Fred is eligible
to receive an annual bonus based on changes in the Company’s revenues and EBITDA
from the prior year. Twenty-five percent of the bonus amount is
determined by revenues and 75% by EBITDA. The manner in which the
bonus is calculated has not changed from Mr. Fred’s prior employment
agreement. The employment agreement also provides that Mr. Fred will
not compete with the Company during the employment term and for a period of two
years from the date of his termination.
If Mr.
Fred’s employment is terminated by the Company without Cause or by Mr. Fred with
Good Reason, then the Company will pay Mr. Fred (i) his Base Salary from the
date of termination through the end of of the Term (“Post-Termination Period”),
provided that, if the Post-Termination Period exceeds two years, the Company
shall pay Mr. Fred the aggregate amount due during such period over a period of
two years; (ii) all earned and previously approved but unpaid Bonuses; (iii) all
valid expense reimbursements; (iv) all accrued but unused vacation pay and (v)
the same medical insurance covering Mr. Fred as of the date of termination
through June 30, 2014. However, if a Change of Control of the Company
occurs prior to a termination of Mr. Fred’s employment, then at the option of
Mr. Fred, in lieu of the above compensation and benefits, the Company shall pay
Mr. Fred an amount equal to 2.99 times the lesser of (a) the total compensation
(including salary and bonus) earned by Mr. Fred during the last full calendar
year of his employment, or (b) the average present value of Mr. Fred’s total
compensation (including salary and bonus) for the five (5) calendar years ending
before the change of control (the “Change of Control Payment”). The
Change of Control Payment will be paid in two installments as follows: (i) the
first installment will be paid on the date Mr. Fred’s employment with the
Company is terminated, in an amount equal to two times the lesser of: (a) the
sum of Mr. Fred’s total compensation (including salary and bonus) for the
calendar year preceding the year in which Mr. Fred’s employment with the Company
is terminated, or (b) the maximum amount that may be taken into account under a
qualified plan under Internal Revenue Code section 401(a)(17) for the year in
which Mr. Fred’s employment with the Company is terminated; and (ii) the second
installment will be paid on the first business day following the day that is six
(6) months after the date Mr. Fred’s employment with the Company is terminated,
in an amount equal to the balance of the Change of Control Payment. Capitalized
terms used but not defined in the foregoing paragraphs have the meanings
ascribed to them in Mr. Fred’s amended and restated employment
agreement.
On
December 16, 2009, the Company entered into an employment agreement with Vincent
Palazzolo, effective January 1, 2010. Mr. Palazzolo is currently
party to an amended and restated Employment Agreement, dated December 1, 2006
which expires by its terms on December 31, 2009. Pursuant to the new
agreement, Mr. Palazzolo will continue to be employed as the Company’s Chief
Financial Officer until December 31, 2012. Mr. Palazzolo’s new
employment agreement provides that he will receive a base salary of (i) $225,000
from January 1, 2010 until December 31, 2010, (ii) $234,000 from January 1, 2011
until December 31, 2011 and (iii) $243,300 from January 1, 2012 to December 31,
2012. For the years ending December 31, 2010, 2011 and 2012, Mr. Palazzolo is
eligible to receive an annual bonus based on changes in the Company’s revenues
and EBITDA from the prior year. Twenty-five percent of the bonus
amount is determined by revenues and 75% by EBITDA. The manner in
which the bonus is calculated has not changed from Mr. Palazzolo’s prior
employment agreement. The employment agreement also provides that Mr.
Palazzolo will not compete with the Company during the employment term and for a
period of two years from the date of his termination. If Mr. Palazzolo’s
employment is terminated by the Company without Cause or by Mr. Palazzolo with
Good Reason, then the Company will pay Mr. Palazzolo (i) his Base Salary through
the end of of the Term; (ii) all earned and previously approved but unpaid
Bonuses; (iii) all valid expense reimbursements; and (iv) all accrued but unused
vacation pay. Capitalized terms used but not defined in this
paragraph have the meanings ascribed to them in Mr. Palazzolo’s new employment
agreement.
On
December 16, 2009, the Company entered into an employment agreement with Douglas
McCrosson, effective January 1, 2010. Mr. McCrosson currently serves
as the Company’s Senior Vice President, Operations pursuant to an amended and
restated Employment Agreement, dated December 1, 2006, as amended on November
19, 2008, which expires by its terms on December 31, 2009. Pursuant
to the new employment agreement, Mr. McCrosson will be employed as the Company’s
Chief Operating Officer until December 31, 2012. Mr. McCrosson’s new
employment agreement provides that he will receive a base salary of (i) $190,000
from January 1, 2010 until December 31, 2010; (ii) $220,000 from January 1, 2011
to December 31, 2011; and (iii) $240,000 from January 1, 2012 until December 31,
2012. For the years ending December 31, 2010, 2011 and 2012, Mr. McCrosson is
eligible to receive an annual bonus based on changes in the Company’s revenues
and EBITDA from the prior year. Twenty-five percent of the bonus
amount is determined by revenues and 75% by EBITDA. The employment
agreement also provides that Mr. McCrosson will not compete with the Company
during the employment term and for a period of two years from the date of his
termination. If Mr. McCrosson’s employment is terminated by the
Company without Cause or by Mr. McCrosson with Good Reason, then the Company
will pay Mr. McCrosson (i) his Base Salary through the end of of the Term; (ii)
all earned and previously approved but unpaid Bonuses; (iii) all valid expense
reimbursements; and (iv) all accrued but unused vacation
pay. Capitalized terms used but not defined in this paragraph have
the meanings ascribed to them in Mr. McCrosson’s new employment
agreement.
The
foregoing descriptions of Mr. Fred’s amended and restated employment agreement,
Mr. Palazzolo’s new employment agreement and Mr. McCrosson’s new employment
agreement are qualified in their entirety by reference to the full text of the
agreements, which are attached hereto as Exhibit 10.1, 10.2 and 10.3,
respectively.
Item
9.01 — Financial Statements and Exhibits
(d) Exhibits
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10.1
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Amended
and Restated Employment Agreement between the Company and Edward J. Fred,
dated as of December 16, 2009
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10.2
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Employment
Agreement between the Company and Vincent Palazzolo, dated as of December
16, 2009
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10.3
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Amended
and Restated Employment Agreement between the Company and Douglas
McCrosson, dated as of December 16,
2009
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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.
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Dated:
December 21, 2009
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CPI
AEROSTRUCTURES, INC
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By:
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/s/ Edward J. Fred
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Edward
J. Fred
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Chief
Executive Officer
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