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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 13, 2006
PERFORMANCE TECHNOLOGIES, INCORPORATED
Commission file number 0-27460
Incorporated pursuant to the Laws of the State of Delaware
Internal Revenue Service - Employer Identification No. 16-1158413
205 Indigo Creek Drive, Rochester, New York 14626
(585)256-0200
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))
Item 1.02 Termination of Material Definitive Agreement
On October 13, 2006, in connection with the resignation of Michael P.
Skarzynski as president and chief executive officer of Performance Technologies,
Incorporated (the "Registrant"), as discussed below under Item 5.02 of this
Report, the employment agreement between the Registrant and Mr. Skarzynski dated
November 3, 2005 (the "Employment Agreement") was terminated. The Registrant has
no further obligations to Mr. Skarzynski under the Employment Agreement other
than the payment of accrued but unpaid base salary and vacation benefits and the
reimbursement of sundry business expenses.
As previously disclosed by the Registrant in its Current Report on Form
8-K filed with the Securities and Exchange Commission on November 9, 2005, the
terms and conditions of the Employment Agreement that were material to the
Registrant are as follows:
o Mr. Skarzynski received a base salary of $300,000 per year and he was
eligible to receive an annual performance bonus. No performance bonus was paid
to Mr. Skarzynski.
o If Mr. Skarzynski had remained employed as the Registrant's president
and chief executive officer between November 3, 2005 and December 31, 2006, his
operating bonus for fiscal year 2006 would have been not less than $150,000.
o Mr. Skarzynski received a non-qualified stock option to purchase
225,000 shares of the Registrant's common stock under its 2003 Omnibus Incentive
Plan. None of the shares subject to the option ever vested and the option has
lapsed.
o In exchange for using his best efforts to permanently relocate from
New Jersey to the Rochester, New York area by July 31, 2006, Mr. Skarzynski
received certain relocation benefits. These benefits could have included up to
an aggregate of $150,000 in relocation and moving expenses actually incurred by
him, as well as additional reimbursements for temporary housing and travel
expenses. The amount of relocation benefits actually paid to Mr. Skarzynski was
immaterial in amount and significance. The Registrant has waived its right under
the Employment Agreement to seek reimbursement from Mr. Skarzynski for
relocation expenses paid to him by the Registrant.
o If Mr. Skarzynski resigned from his employment with the Registrant,
without good reason, at any time within the first year of the Employment
Agreement, he was required to reimburse the Registrant for the value of all
relocation benefits that he has received. As discussed above, the Registrant has
waived this right.
o The Employment Agreement contained customary confidentiality,
non-competition and non-solicitation obligations.
o The Employment Agreement continued in existence until it was
terminated in accordance with its terms.
o If Mr. Skarzynski's employment was terminated without cause, if he
resigned for good reason, or if the Registrant experienced a change of control
and Mr. Skarzynski no longer continued as its president and chief executive
officer, subject to certain conditions, Mr. Skarzynski would: (i) continue to
receive his base salary for 12 months, (ii) continue to receive health and
medical insurance benefits for 12 months, (iii) receive a pro rata portion of
his operating bonus actually earned (including, if applicable, a pro rata
portion of the minimum operating bonus guaranteed for 2006), and (iv) be
eligible to immediately exercise that portion of his option that would have been
vested and exercisable had he continued in his employment with the Registrant
for a further 12 months (during the first year of the Employment Agreement, up
to an aggregate of 75,000 shares were subject to such accelerated vesting).
o The Registrant maintained a directors' and officers' liability
insurance policy covering liabilities that might be incurred by Mr. Skarzynski
in his capacity as a director and officer of the Registrant, and the Registrant
agreed to indemnify Mr. Skarzynski, to the fullest extent permitted by law, if
he was made a party to any threatened, pending or contemplated lawsuit by reason
of his service as a director and officer of the Registrant and incurred any
costs, losses, damages, judgments, liabilities and expenses (including
reasonable attorneys' fees), unless Mr. Skarzynski was adjudged to have been
guilty of fraud or bad faith or breached the terms of the Employment Agreement.
o The board of directors of the Registrant (the "Board of Directors")
agreed to appoint Mr. Skarzynski to serve as a member of the Board of Directors
until the next annual meeting of the stockholders and to nominate him to be
elected at the next annual meeting of the stockholders to continue to serve as a
member of the Board of Directors. As discussed below under Item 5.02 of this
Report, Mr. Skarzynski has resigned from his position as a member of the Board
of Directors.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
A. Resignation of Michael P. Skarzynski as Director, President and Chief
Executive Officer
On October 13, 2006, Michael P. Skarzynski resigned as president and
chief executive officer of the Registrant. Mr. Skarzynski also resigned from the
Board of Directors effective as of October 13, 2006. Mr. Skarzynski advised the
Registrant that he was tendering his resignation from all positions he held with
the Registrant, including his position as a director of the Registrant, for
personal reasons and not because of any disagreement with the Registrant. The
Board of Directors accepted Mr. Skarzynski's resignation from each of the
aforementioned positions effective as of October 13, 2006.
The Board of Directors and Mr. Skarzynski are engaged in discussions
regarding entry into a short-term consulting agreement by which Mr. Skarzynski
would provide the Registrant with certain transition services for the purpose of
facilitating the transfer of Mr. Skarzynski's former responsibilities as
president and chief executive officer of the Registrant to the interim president
and chief executive officer of the Registrant (as discussed below). At this
time, the parties have not entered into any such consulting agreement.
B. Appointment of John M. Slusser as Interim President and Chief Executive
Officer
On October 13, 2006, the Board of Directors appointed John M. Slusser
to serve as the interim president and chief executive officer of the Registrant
until a permanent successor for Mr. Skarzynski can be hired. During his tenure
as interim president and chief executive officer, Mr. Slusser will continue to
serve as chairman of the board. Mr. Slusser will receive a base salary of
$300,000 per year in consideration for serving as interim president and chief
executive officer. In accordance with the Registrant's compensation policies,
while he serves as interim president and chief executive officer, Mr. Slusser
will not receive compensation as a director.
Mr. Slusser, age 53, is a founder of the Registrant. He has served as
the chairman of the board since June 2001, as a director since the Registrant's
formation in 1981 and as the Registrant's chief strategic officer from January
2003 to May 2005. From 1981 through 1995, Mr. Slusser held various positions
within the Registrant, including president and chief executive officer. From
1995 until 2000, Mr. Slusser served as chairman of the board of InformationView
Solutions Corporation and from 1995 to 1999 he served as that company's chief
executive officer. Since 2000, Mr. Slusser has served as president of Radio Daze
LLC.
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.
PERFORMANCE TECHNOLOGIES, INCORPORATED
October 19, 2006 By /s/ Dorrance W. Lamb
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Dorrance W. Lamb
Chief Financial Officer and
Senior Vice President of Finance