CECO Environmental Announces Inducement Grants For Its New CEO Under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

CECO Environmental Corp. (Nasdaq: CECE) announced inducement grants for its new CEO, Todd Gleason, as disclosed in its Form 8-K on July 6, 2020. The grants include a premium priced nonqualified stock option for 898,204 shares at $12.72 per share, a nonqualified stock option for 316,902 shares at $6.36 per share, and 94,340 restricted stock units. These awards, effective from Gleason's start date on July 6, 2020, were offered outside CECO's 2017 Equity and Incentive Compensation Plan to facilitate his employment acceptance.

Positive

• Inducement grants may lead to strong leadership direction with the new CEO.
• Equity awards align CEO's interests with shareholder value.

Negative

• Premium options may dilute shares if exercised.
• Concerns about continuity and experience gap with new leadership.

DALLAS, July 10, 2020 /PRNewswire/ -- CECO Environmental Corp. ("CECO", Nasdaq: CECE), a leading global air quality and fluid handling technology company, today announced that, as previously disclosed in its Form 8-K filed with the Securities and Exchange Commission on July 6, 2020, CECO made inducement grants to Todd Gleason, the newly-appointed Chief Executive Officer of CECO.

CECO's Board of Directors and Compensation Committee approved, pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market Listing Rules, grants of inducement equity awards to Mr. Gleason consisting of a premium priced nonqualified stock option to purchase 898,204 shares of CECO's common stock (the "Premium Option Award") at an exercise price of $12.72 per share, a nonqualified stock option to purchase 316,902 shares of CECO's common stock (the "Standard Option Award") at an exercise price of $6.36 per share, and restricted stock units covering 94,340 shares of CECO's common stock (plus cash-based dividend equivalents) (the "RSU Award"). These awards were granted outside of CECO's 2017 Equity and Incentive Compensation Plan as inducements material to Mr. Gleason's acceptance of employment with CECO.  The grant date for the awards is July 6, 2020 (the "Grant Date"), Mr. Gleason's first day of employment with CECO.

The Standard Option Award has an exercise price equal to the closing price of CECO's common stock on July 2, 2020, the last trading day preceding the Grant Date, and the Premium Option Award has an exercise price equal to two times the closing price of CECO's common stock on July 2, 2020, the last trading day preceding the Grant Date.  Both the Standard Option Award and the Premium Option Award generally expire on the seventh anniversary of the Grant Date.

The Standard Option Award, the Premium Option Award, and the RSU Award each generally vest, subject to continued employment or other specified events, in substantially equal installments on each of the first four anniversaries of the Grant Date.

About CECO:

CECO Environmental is a global leader in air quality and fluid handling serving the energy, industrial and other niche markets.  Providing innovative technology and application expertise, CECO helps companies grow their business with safe, clean and more efficient solutions that help protect our shared environment. In regions around the world, CECO works to improve air quality, optimize the energy value chain and provide custom engineered solutions for applications including oil and gas, power generation, water and wastewater, battery production, poly silicon fabrication, chemical and petrochemical processing along with a range of others. CECO is listed on Nasdaq under the ticker symbol "CECE".  For more information, please visit www.cecoenviro.com.

For Investors: Matthew Eckl, CFO (888) 990-6670 investor.relations@onececo.com

 

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SOURCE CECO Environmental Corp.

FAQ

What inducement grants did CECO offer to its new CEO Todd Gleason?

CECO offered Todd Gleason a premium priced stock option for 898,204 shares at $12.72, another option for 316,902 shares at $6.36, and 94,340 restricted stock units.

When did Todd Gleason start as CEO of CECO Environmental?

Todd Gleason began his role as CEO on July 6, 2020.

How do the inducement grants impact CECO's shareholders?

While inducement grants may enhance leadership alignment with shareholder interests, they could also result in share dilution if options are exercised.

What is the significance of the Nasdaq listing rule 5635(c)(4) in CECO's inducement grants?

The grants were made under Nasdaq listing rule 5635(c)(4), which allows for inducement equity awards to attract key executives.

What are the vesting terms for Todd Gleason's stock options and RSUs?

The options and RSUs generally vest in equal installments over four years, subject to employment conditions.