This Compensation Discussion and Analysis explains the
philosophy and objectives of our executive compensation program. The Board of Directors has determined that for fiscal year 2016, the following executives are the Companys Named Executive Officers (referred to as our executives or
executive officers throughout this section):
The compensation and benefits provided to our executive officers in 2016 are set forth in detail in the Summary Compensation
Table and other tables that follow this Compensation Discussion and Analysis, and in the footnotes and narrative to such tables.
This compensation program recognizes
that executives with the most senior leadership positions within our Company have the greatest ability to influence our performance. As a result, the annual and long-term incentive awards as a percentage of total compensation for our executives are
greater than that of our other employees.
The Compensation Committee evaluates both performance and compensation annually to ensure that the program continues to meet these objectives. Overall, we have
designed our executive compensation program to:
We believe that each element of our executive compensation program (described starting on page 14 of this
Amendment) helps us to achieve one or more of our compensation objectives.
Our executive compensation program is comprised of elements that support our compensation objectives. A brief description of each element is highlighted in the
table below. For more details, review Elements of Our Executive Compensation Program starting on page 14 of this Amendment.
In addition to the key elements highlighted in the table above, our compensation program is designed to
incorporate the following features that we believe are beneficial to our stockholders:
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Executive
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|
Base Salary
|
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|
Annual Cash
Incentive
Awards
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Long-Term
Equity
Awards
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Total Direct
Compensation
|
|
Robert L. Antin,
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|
|
|
|
|
|
|
|
|
|
|
|
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Chief Executive Officer
|
|
$
|
1,072,988
|
|
|
$
|
2,742,375
|
|
|
$
|
4,324,950
|
|
|
$
|
8,140,313
|
|
|
|
|
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|
Arthur J. Antin,
|
|
|
|
|
|
|
|
|
|
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|
|
|
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Chief Operating Officer
|
|
$
|
669,988
|
|
|
$
|
684,950
|
|
|
$
|
960,027
|
|
|
$
|
2,314,965
|
|
|
|
|
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|
Tomas W. Fuller,
|
|
|
|
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|
|
|
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|
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Chief Financial Officer
|
|
$
|
458,413
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|
|
$
|
468,650
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|
|
$
|
830,031
|
|
|
$
|
1,757,094
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|
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Neil Tauber,
|
|
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|
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|
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|
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Sr. VP of Development
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|
$
|
458,413
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|
|
$
|
468,650
|
|
|
$
|
765,020
|
|
|
$
|
1,692,083
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|
|
|
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Josh Drake,
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|
|
|
|
|
|
|
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Pres. of Antech Diagnostics
|
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$
|
418,312
|
|
|
$
|
295,610
|
|
|
$
|
815,024
|
|
|
$
|
1,528,946
|
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|
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We require executives to own a minimum amount of Company stock
We prohibit any form of hedging activities in Company stock
We have adopted a clawback policy that allows us to recover incentive compensation in certain instances
|
|
Since our executives are required to hold Company stock, this serves as further incentive for our executives to increase the value of our
stock. The Companys stock ownership guidelines require our directors and executives to maintain the following levels of ownership of our stock:
Directors At least 4 times his/her annual cash retainer
Chief Executive Officer At least 4 times his/her base
salary
Other Named Executive Officers At least 2 times his/her base
salary
All of our directors and executives currently meet our stock ownership
guidelines.
We prohibit any form of hedging activities in Company stock by our
executives and our directors including engaging in short sales, dealing in puts and calls of Company stock, or other transactions designed to minimize the risk inherent in owning Company stock.
Our equity incentive plan allows the Company to withhold or clawback awards
from current and former employees if the employee breaches his/her employment obligations or participates in illegal activities, such as a breach of confidentiality or other agreements with the Company, theft, embezzlement, or certain other cause
events. In addition, our Board of Directors has adopted a policy that permits us to recover performance based awards (including any performance based annual incentive awards and long-term incentive, equity-based awards) received by an executive
officer in certain circumstances if our financial results are restated.
|
11
|
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|
PROGRAM
FEATURE
|
|
WHAT IT MEANS FOR OUR STOCKHOLDERS
|
We limit new employment agreements
|
|
Our Chief Executive Officer and our Chief Operating Officer have employment agreements that were entered into in 2001 (and not materially amended since that date) that provide for automatic renewal features, severance arrangements
on a change-in-control based on a single trigger and a gross up for taxes. These are contractual rights held by these executives and cannot be unilaterally altered by the Company. The Compensation Committee has adopted a policy that it
will not authorize any new employment agreement that includes automatic renewal features, or any new employment agreements or severance arrangements with executive officers that provide for a single trigger or excise tax gross up upon a
change in control of the Company. This means that if there is a change in the Companys ownership, any executive with a new employment agreement would not receive change in control benefits immediately. He/she must be terminated in order to
receive benefits upon a change in control of the Company. Furthermore, the executive would not receive a gross up, which is designed to cover the cost of taxes on change in control benefits.
|
|
|
Our Compensation Committee is comprised entirely of independent directors
|
|
The Compensation Committee makes executive compensation decisions that are unbiased and independent from management influence.
|
|
|
Our Compensation Committee conducts an annual review and assessment of potential compensation-related risks in our programs
|
|
We concluded that our compensation programs
do not
encourage behaviors that would create risks reasonably likely to have an adverse effect on the Company.
|
R
ESPONSE
TO
2016
S
AY
-O
N
-P
AY
V
OTE
At our 2016 annual meeting of stockholders our
advisory vote on our executive compensation passed, with 98% of those stockholders voting on the matter voting for our executive compensation program. Our Board of Directors, our Compensation Committee, and our senior management were
strongly encouraged that an over-whelming majority of our stockholders approved of our executive compensation program. Our Board of Directors and our management team review our compensation program on an annual basis to determine ways in which we
can improve our compensation practices. As part of that annual process, in the weeks and months that followed our 2016 annual meeting of stockholders, we engaged in multiple conversations with many of our largest stockholders to discuss their views
regarding our compensation program and practices. Through those conversations, we confirmed that many of our stockholders would like our compensation program to:
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ensure management is rewarded for cumulative performance that is aligned with stockholder interests;
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use both absolute and relative performance measures; and
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|
|
use different metrics for our annual cash incentives and long-term equity incentives.
|
12
Actions Taken By Our Compensation Committee In Response To Stockholder Feedback
The Compensation Committee carefully considers the feedback received from our stockholders as part of its ongoing evaluation of all elements of the
Companys executive compensation program. In response to the feedback it has received from our stockholders, the Compensation Committee has taken the actions listed below over the past several years.
Responded to stockholder feedback and reduced the use of Adjusted EBITDA as a performance metric
Over the past several years some of our stockholders expressed concerns about the use of Adjusted EBITDA as a performance metric for both our short-term and
long term incentive awards. These stockholders expressed the preference that we use different metrics or objectives in our long-term equity program and our annual cash incentive program. Our Compensation Committee believes that Adjusted EBITDA
1
is an important performance metric for our senior management because it is a measure used by the Board of Directors, management, stockholders, and the investment community to measure the
Companys financial success and overall performance. Consequently, we have continued to use Adjusted EBITDA as a performance metric in our long-term equity incentive awards but as of 2015 we have discontinued the use of Adjusted EBITDA as a
performance metric for our annual cash incentive awards.
Further strengthened senior managements alignment with stockholders through use of
absolute and relative performance metrics for our long-term equity awards, which are distinct from the performance metrics used in our cash incentive program.
Our 2016 long-term equity incentive awards focused on two performance metrics: Adjusted EBITDA, our historical preferred absolute performance metric, and a
relative performance metric that compares the Companys stock price at the end of each of these fiscal years versus the cumulative performance of the Russell 3000
®
Index.
Selection of Performance Metrics for our Annual Cash Incentive Awards.
In the past some of our principal institutional stockholders have suggested that the Company utilize multiple performance metrics for its short-term and
long-term incentive programs. In response to these suggestions the Compensation Committee expanded the performance metrics it uses in determining the annual cash incentive awards for our executives to include the following metrics and other
important factors:
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laboratory operating income;
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adjusted hospital gross profit;
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hospital same-store growth;
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adjusted hospital gross profit margin;
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adjusted diluted earnings per share;
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market and industry leadership;
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strength of our balance sheet which provides opportunities for growth or stock repurchases.
|
1
|
Adjusted EBITDA is based on our Consolidated Adjusted EBITDA (as defined in our principal bank agreement), as further adjusted by (a) adding (1) amortization or
write-off
of
debt discount, (2) integration costs incurred in connection with business combinations, (3) extraordinary, unusual or
non-recurring
losses or expenses (including, without limitation, impairment
charges, severance expenses,
non-recurring
retention bonuses, inducement payments to newly hired employees and restructuring costs), (4) charges resulting from foreign exchange losses and (5) reasonable
expenses related to equity offerings or acquisitions, recapitalizations, divestitures or asset sales and (b) deducting income resulting from foreign exchange gains. The Compensation Committee uses Adjusted EBITDA, rather than EBITDA, because it
excludes the effect of significant items that the Compensation Committee believes are not representative of our core operations for the period presented.
|
13
Long Term Equity Awards Earned over Multiple Years.
The full value of our long-term equity awards granted in 2016 are designed to be earned by our executives over a three year period with a maximum of 50% of the
award eligible to be earned based on our 2016 performance. The remainder of the awards may be earned at the end of fiscal 2017 and 2018 based on performance during those years. We believe this multi-year approach provides incentives to our
executives to perform over both the short- and long-term and rewards our executives for exemplary performance.
Stock Ownership Guidelines.
We have adopted stock ownership guidelines under which our directors are expected to maintain stock ownership of at least 4x their annual cash
retainer, our Chief Executive Officer is expected to maintain stock ownership of at least 4x base salary and our other executive officers are expected to maintain stock ownership of at least 2x base salary.
Anti-Hedging Policy
.
Our policies
provide that any form of hedging activities in Company stock by our executives and our directors, including any transactions designed to minimize the risk inherent in owning the Companys common stock, is expressly prohibited.
E
LEMENTS
OF
O
UR
E
XECUTIVE
C
OMPENSATION
P
ROGRAM
Our executive
compensation program consists of base salary, annual cash incentive awards, equity compensation, and perquisites and other executive benefits. A description of each element is set forth below.
Base Salary
Our executives are paid a fixed base
salary based on the responsibilities of their positions, the skills and experience required for the job, business performance, labor market conditions and by reference to market median salary levels. Our executive officers salaries are
reviewed annually and salary increases typically take effect in October of each year, unless business circumstances require otherwise.
Annual Cash
Incentive Awards
Our annual cash incentive awards are intended to reward our executive officers for performance over our fiscal year. They also
align our executives interests with those of our stockholders and help us attract, motivate and retain executives. Our Compensation Committee has designed our annual cash incentive awards to give the Compensation Committee greater flexibility
to consider all aspects of performance and other factors the Compensation Committee considers relevant without affecting the availability of the Companys tax deduction for qualified performance based compensation under Section 162(m) of the
Internal Revenue Code. The Compensation Committee approves
pre-established
objective quantitative and qualitative performance metrics in accordance with our cash incentive plan. Under this plan, each
participant is eligible to receive a predetermined maximum annual award if the maximum objective performance levels have been satisfied. The Compensation Committee retains the ability to grant additional bonuses where it deems circumstances,
including the financial performance of the Company, or other performance measures, warrant it.
Long-Term Equity Incentive Awards
The Companys equity compensation is an important element of our overall compensation program, and is designed to reward participants the way stockholders
are rewarded: through growth in the value of our common stock. At the end of 2016, approximately 184 employees held equity awards under the Companys 2006 Equity Incentive Plan and 2015 Equity Incentive Plan, including our executive officers.
The purpose of the grants is to align employees interests with the interests of our stockholders, reward employees for enhancing stockholder value, encourage retention and provide a means to increase ownership of our common stock. We also
grant equity awards on a selective basis as part of new hire agreements, to encourage retention or to reward extraordinary results.
14
The level of long-term equity incentive compensation is determined based on an evaluation of competitive factors
in conjunction with total direct compensation provided to our executive officers and the overall goals of the compensation program described herein.
We do not have, nor do we intend to have, a program, plan or practice to select the grant dates
of equity awards for our executives in coordination with the release of material
non-public
information.
Our
Compensation Committee granted equity awards to our executives in 2016, 2015, and 2014. The equity awards granted to our executives are equity performance awards which are tied to achieving
pre-established
objective performance goals established pursuant to our equity incentive plan. Under this plan, each participant is eligible to receive a predetermined maximum annual award if the maximum objective performance levels have been satisfied. Lower
awards are set for target performance and minimum threshold performance.
The purpose of the equity performance awards is to reward our executives for
performance over an extended period of time, align our executives interests with those of our stockholders and help us attract, motivate and retain executives by ensuring that our compensation programs are competitive with our peer companies.
The Compensation Committees goal is that, on average over any three year period, the equity awards granted to our executives be reasonably comparable to the aggregate equity awards granted by our peer companies to their named executive
officers over the same period.
Perquisites and Other Executive Benefits
In order to better enable us to attract and retain highly skilled executive and other officers and to round out a competitive compensation package for our
executive and other officers,
we provide our executive officers with perquisites and other personal benefits that we believe are reasonable and consistent with our overall compensation philosophy and objectives.
The Compensation Committee
periodically reviews the levels of perquisites and other personal benefits provided to our executives.
The executives officers, among other things, are
provided use of automobiles and are eligible for executive medical excess claims insurance coverage.
H
OW
W
E
D
ETERMINE
E
XECUTIVE
C
OMPENSATION
The Compensation Committee oversees our executive compensation and benefit plans and practices, while establishing management compensation policies and
procedures to be reflected in the compensation program offered to our executive officers. The Compensation Committee operates under the written charter approved by the entire Board of Directors, a copy of which is available at http://www.vca.com.
When necessary, the Compensation Committee recommends amendments to its charter to the Board of Directors for approval.
In connection with its
responsibilities, the Compensation Committee has the authority to retain independent counsel or other consultants, as it deems necessary, at the Companys expense.
The Compensation Committee may request that any of our directors, officers or employees, or other persons attend its meetings to provide advice, counsel or
pertinent information as the Compensation Committee requests.
Our Chief Executive Officer is involved in the design and implementation of our executive
compensation programs. He typically provides his input through consultation with the Chairman of the Compensation Committee and typically is not present at Compensation Committee meetings at which the Compensation Committee makes compensation
determinations. Our Chief Executive Officer annually reviews the performance of each executive officer (other than the Chief Executive Officer whose performance is reviewed by the Compensation Committee) and presents his conclusions and
recommendations regarding base salary and incentive award amounts for each executive officer (other than himself) to the Compensation Committee for its consideration.
In setting compensation for our executive officers, the Compensation Committee reviews our performance over the prior three years, focusing in particular on
enterprise-wide criteria driving our performance, each executives individual circumstances, including cash and equity-based compensation paid to each executive in the past three years and prior periods, as well as the accumulated value of all
cash and equity-based compensation awarded to each executive. The Compensation Committee also reviews the conclusions and recommendations regarding base salary
15
and incentive award amounts for each executive officer presented by our Chief Executive Officer (other than himself) and conducts discussions with our Chief Executive Officer regarding the
performance of our other executives, and meets in executive sessions to discuss the performance of the Chief Executive Officer (our Chief Executive Officer is not present for these separate executive sessions). Those discussions, together with the
Compensation Committees review of each executive officers historical compensation and accumulated long-term incentive pay, allow the Compensation Committee to make compensation decisions in light of each executive officers
achievement and other circumstances. The Compensation Committee exercises its discretion in accepting, rejecting and/or modifying any executive compensation recommendations provided by our Chief Executive Officer.
2016 E
XECUTIVE
C
OMPENSATION
Base Salaries
The Compensation Committee typically reviews and adjusts base salaries annually. Effective October 1, 2016, the Compensation Committee raised base
salaries for our executives by approximately 3%, as follows:
|
|
|
|
|
Executive Officer
|
|
Base Salary
|
|
Robert L. Antin,
Chief Executive Officer
|
|
$
|
1,096,950
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
$
|
684,950
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
$
|
468,650
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
$
|
468,650
|
|
|
|
Josh Drake,
Pres. of Antech Diagnostics
|
|
$
|
422,300
|
|
Annual Cash Incentive Awards
The Compensation Committee has adopted a
two-step
approach for purposes of the annual cash incentive awards that
provides it greater flexibility to consider all aspects of the Companys and individual Named Executive Officers performance as well as other factors that the Compensation Committee considers relevant. Under this
two-step
approach, the Compensation Committee establishes maximum cash incentive award opportunities for each of our executives based upon the achievement of quantitative performance goals, then exercises its
discretion based on its subjective assessment of qualitative performance metrics in determining the actual cash payouts.
For 2016, the Compensation
Committee established maximum individual cash incentive award opportunities for each of our executives based upon the achievement of quantitative performance goals consisting of a Company-wide performance metric, Adjusted Diluted Earnings Per Share
(Adjusted Diluted EPS
2
), and various operating unit performance goals including laboratory operating income, laboratory same-store growth, adjusted hospital gross profit, hospital same-store
growth, adjusted hospital gross profit margin.
2
|
Adjusted Diluted EPS is based on our consolidated net income, on a fully-diluted share basis, adjusted to exclude the
after-tax
impact of: (1) consolidated acquisition
related amortization expense,
(2) non-cash
stock based compensation expense, (3) integration costs incurred in connection with acquisitions, (4) other
non-cash
items, including write-offs of assets, reducing consolidated net income, and (5) extraordinary, unusual or
non-recurring
losses or expense (including,
without limitation, costs and expenses related to the abandonment of real property, severance expenses,
non-recurring
retention bonuses, inducement payments to newly hired employees and restructuring costs).
The Compensation Committee uses Adjusted Diluted Earnings Per Share, rather than Diluted Earnings Per Share, because it excludes the effect of significant items that the Compensation Committee believes are not representative of our core operations
for the period presented.
|
16
The charts below set out the quantitative performance metrics/goals and the relative weighting assigned for
purposes of determining the 2016 annual cash incentive awards granted under the 2015 Cash Incentive Plan for each of our Named Executive Officers, as well as the actual results:
Robert L. Antin Chief Executive Officer
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Weighting
|
|
|
Performance Goal
|
|
|
Actual Results
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
Laboratory Operating Income
|
|
|
20
|
%
|
|
$
|
175.0m
|
|
|
$
|
178.0m
|
|
|
$
|
180.0m
|
|
|
$
|
181.2m
|
|
Laboratory Same-Store Growth
|
|
|
15
|
%
|
|
|
6.0
|
%
|
|
|
6.3
|
%
|
|
|
6.9
|
%
|
|
|
6.3
|
%
|
Adjusted Hosp. Gross Profit (excl. Depr. & Amort.)
|
|
|
15
|
%
|
|
$
|
382.0m
|
|
|
$
|
388.0m
|
|
|
$
|
392.0m
|
|
|
$
|
424.4m
|
|
Hosp. Same-Store Growth
|
|
|
15
|
%
|
|
|
5.2
|
%
|
|
|
5.4
|
%
|
|
|
5.8
|
%
|
|
|
6.1
|
%
|
Adjusted Diluted EPS (excl. Amort. & Share-based Comp)
|
|
|
35
|
%
|
|
$
|
2.88
|
|
|
$
|
2.93
|
|
|
$
|
2.98
|
|
|
$
|
3.03
|
|
Arthur J. Antin Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Weighting
|
|
|
Performance Goal
|
|
|
Actual Results
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
Laboratory Operating Income
|
|
|
15
|
%
|
|
$
|
175.0m
|
|
|
$
|
178.0m
|
|
|
$
|
180.0m
|
|
|
$
|
181.2m
|
|
Adjusted Hosp. Gross Profit (excl. Depr. & Amort.)
|
|
|
10
|
%
|
|
$
|
382.0m
|
|
|
$
|
388.0m
|
|
|
$
|
392.0m
|
|
|
$
|
424.4m
|
|
Hosp. Same-Store Growth
|
|
|
20
|
%
|
|
|
5.2
|
%
|
|
|
5.4
|
%
|
|
|
5.8
|
%
|
|
|
6.1
|
%
|
Adjusted Hosp. Gross Profit Margin (excl. Depr. & Amort.)
|
|
|
15
|
%
|
|
|
19.7
|
%
|
|
|
19.9
|
%
|
|
|
20.2
|
%
|
|
|
20.3
|
%
|
Adjusted Diluted EPS (excl. Amort. & Share-based Comp)
|
|
|
30
|
%
|
|
$
|
2.88
|
|
|
$
|
2.93
|
|
|
$
|
2.98
|
|
|
$
|
3.03
|
|
Incremental Profitability of U.S. Same Store Hospitals
|
|
|
10
|
%
|
|
|
40.0
|
%
|
|
|
45.0
|
%
|
|
|
47.0
|
%
|
|
|
32.0
|
%
|
Tomas W. Fuller Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Weighting
|
|
|
Performance Goal
|
|
|
Actual Results
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
Laboratory Operating Income
|
|
|
20
|
%
|
|
$
|
175.0m
|
|
|
$
|
178.0m
|
|
|
$
|
180.0m
|
|
|
$
|
181.2m
|
|
Adjusted Hosp. Gross Profit (excl. Depr. & Amort.)
|
|
|
10
|
%
|
|
$
|
382.0m
|
|
|
$
|
388.0m
|
|
|
$
|
392.0m
|
|
|
$
|
424.4m
|
|
Hosp. Same-Store Growth
|
|
|
10
|
%
|
|
|
5.2
|
%
|
|
|
5.4
|
%
|
|
|
5.8
|
%
|
|
|
6.1
|
%
|
Adjusted Hosp. Gross Profit Margin (excl. Depr. & Amort.)
|
|
|
15
|
%
|
|
|
19.7
|
%
|
|
|
19.9
|
%
|
|
|
20.2
|
%
|
|
|
20.3
|
%
|
Company-Wide Hosp. Acquisitions (Acquired Revenue)
|
|
|
10
|
%
|
|
$
|
130.0m
|
|
|
$
|
135.0m
|
|
|
$
|
145.0m
|
|
|
$
|
218.7m
|
|
Adjusted Diluted EPS (excl. Amort. & Share-based Comp)
|
|
|
35
|
%
|
|
$
|
2.88
|
|
|
$
|
2.93
|
|
|
$
|
2.98
|
|
|
$
|
3.03
|
|
17
Neil Tauber Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Weighting
|
|
|
Performance Goal
|
|
|
Actual Results
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
Laboratory Operating Income
|
|
|
15
|
%
|
|
$
|
175.0m
|
|
|
$
|
178.0m
|
|
|
$
|
180.0m
|
|
|
$
|
181.2m
|
|
Adjusted Hosp. Gross Profit (excl. Depr. & Amort.)
|
|
|
10
|
%
|
|
$
|
382.0m
|
|
|
$
|
388.0m
|
|
|
$
|
392.0m
|
|
|
$
|
424.4m
|
|
Adjusted Hosp. Gross Profit Margin (excl. Depr. & Amort.)
|
|
|
10
|
%
|
|
|
19.7
|
%
|
|
|
19.9
|
%
|
|
|
20.2
|
%
|
|
|
20.3
|
%
|
U.S. Hosp. Acquisitions (Acquired Revenue)
|
|
|
25
|
%
|
|
$
|
115.0m
|
|
|
$
|
120.0m
|
|
|
$
|
130.0m
|
|
|
$
|
190.5m
|
|
Company-Wide Hosp. Acquisitions (Acquired Revenue)
|
|
|
15
|
%
|
|
$
|
130.0m
|
|
|
$
|
135.0m
|
|
|
$
|
145.0m
|
|
|
$
|
218.7m
|
|
Adjusted Diluted EPS (excl. Amort. & Share-based Comp)
|
|
|
25
|
%
|
|
$
|
2.88
|
|
|
$
|
2.93
|
|
|
$
|
2.98
|
|
|
$
|
3.03
|
|
Josh Drake President, Antech Diagnostics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Weighting
|
|
|
Performance Goal
|
|
|
Actual Results
|
|
|
|
|
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
Laboratory Operating Income
|
|
|
30
|
%
|
|
$
|
175.0m
|
|
|
$
|
178.0m
|
|
|
$
|
180.0m
|
|
|
$
|
181.2m
|
|
Adjusted Laboratory Gross Profit Margin (excl. Depr. & Amort.)
|
|
|
20
|
%
|
|
|
54.4
|
%
|
|
|
55.0
|
%
|
|
|
55.1
|
%
|
|
|
55.0
|
%
|
Laboratory Same-Store Growth
|
|
|
20
|
%
|
|
|
6.0
|
%
|
|
|
6.3
|
%
|
|
|
6.9
|
%
|
|
|
6.3
|
%
|
Adjusted Diluted EPS (excl. Amort. & Share-based Comp)
|
|
|
30
|
%
|
|
$
|
2.88
|
|
|
$
|
2.93
|
|
|
$
|
2.98
|
|
|
$
|
3.03
|
|
Following the end of the year, a maximum payout factor is calculated using the
year-end
results against the target for the applicable quantitative performance metric. Each quantitative performance metric is assessed independently of each other and scaled above or below its respective
target using the formula set forth below. The annual cash incentive award opportunity is
pro-rated
between each performance level based upon actual performance. The percentages in the table below refer to the
percentage of base salary payable as an annual cash incentive award at each of the indicated performance levels.
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantitative Performance
Criteria Weighting
|
|
×
|
|
Annual Cash Incentive
Award Opportunity
|
|
×
|
|
Base
Salary
|
|
=
|
|
Maximum Annual Cash
Incentive Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Incentive Award Opportunity
|
|
Executive Officer
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
75
|
%
|
|
|
100
|
%
|
|
|
250
|
%
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
45
|
%
|
|
|
90
|
%
|
|
|
100
|
%
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
35
|
%
|
|
|
70
|
%
|
|
|
100
|
%
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
35
|
%
|
|
|
70
|
%
|
|
|
100
|
%
|
|
|
|
|
Josh Drake,
Pres. of Antech Diagnostics
|
|
|
35
|
%
|
|
|
50
|
%
|
|
|
70
|
%
|
18
As reflected above, the overall strong performance of the Company in 2016 resulted in our executive officers
achieving, and in many instances exceeding, the relevant quantitative performance metrics. The Compensation Committee, based in part on the recommendation of our Chief Executive Officer (for all executive officers other than himself) and taking into
account the overall strong performance of the Company, the Compensation Committees assessment of each executive officers performance on qualitative measures during 2016, and the overall compensation earned by our executive officers in
2016, determined to award our executive officers annual cash incentive awards in amounts, as set forth below.
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
% of 2016
Base Salary
|
|
|
2016
Annual Cash
Incentive Awards
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
250
|
%
|
|
$
|
2,742,375
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
100
|
%
|
|
$
|
684,950
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
100
|
%
|
|
$
|
468,650
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
100
|
%
|
|
$
|
468,650
|
|
Josh Drake,
Pres. of Antech Diagnostics
|
|
|
70
|
%
|
|
$
|
295,610
|
|
Long-Term Equity Incentive Awards Granted in 2015
In 2015, the Compensation Committee granted our executives three-year performance-contingent restricted stock units representing the right to receive shares of
Company common stock (the
2015
Equity
Award
or the
2015
RSUs
).
A maximum of 50% of the 2015
RSUs were eligible to be earned with respect to performance in 2015. The remainder of the 2015 RSUs may be earned by our executives based upon performance in 2016 and 2017, with the potential of the full award being earned at the end of the second
year of the performance period if performance significantly exceeds the target performance established by the Compensation Committee.
The 2015 RSUs may
be earned by our executives based on achieving
pre-established
levels of Adjusted EBITDA and the performance of our stock compared against the performance of the Russell 3000
®
Index.
3
100% of the target award may be earned by our executives if in 2016 or 2017 the target performance goal for either Adjusted
3
|
Adjusted EBITDA is a
non-GAAP
financial measure of performance and should
not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. Although Adjusted EBITDA is a relatively standard financial term, numerous methods exist for calculating this financial
measure. As a result, the method used by the Companys management may differ from the methods other companies use to calculate Adjusted EBITDA and we urge you to understand the methods used by other companies to calculate Adjusted EBITDA before
comparing our results to that of such other companies. Please see
Appendix A
for a reconciliation of this
non-GAAP
financial measure to the applicable GAAP financial measure.
|
19
EBITDA or the performance of our stock compared against the performance of the Russell 3000
®
Index is achieved, regardless of whether the
minimum performance goals are achieved for the other performance metrics. 2015 RSUs above the target award may only be earned if performance above the target goal is achieved in 2016 or 2017.
Please see our 2016 Proxy Statement filed with the SEC on Schedule 14A for a more complete discussion of the 2015 Equity Award and the 2015 RSUs earned in
2015.
The chart below sets out the Adjusted EBITDA and Russell 3000
®
Index performance goals
established in connection with the 2015 Equity Awards for the 2016 performance period:
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Minimum
|
|
Target
|
|
Maximum
|
|
Actual Results
|
Adjusted EBITDA
|
|
$430.0m
|
|
$440.0m
|
|
$448.0m
|
|
$506.0m
|
Russell 3000
®
Index
|
|
92.0 96.0%
|
|
96.0 103.0%
|
|
>103.0%
|
|
124.6%
|
In February 2017, the Compensation Committee certified that with respect to the 2016 performance period for the 2015 Equity
Award the maximum performance levels were achieved with respect to the Adjusted EBITDA and Russell 3000
®
Index performance metrics. As a result, each of our executive officers earned that
number of 2015 RSUs set forth below for performance in 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
Number of
2015 RSUs
Earned In 2016
|
|
|
Implied Value
(1)
|
|
|
Aggregate
2015 RSUs
Earned To Date
|
|
|
Implied Value
(1)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
52,717
|
|
|
$
|
2,899,962
|
|
|
|
105,435
|
|
|
$
|
5,799,979
|
|
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
10,907
|
|
|
$
|
599,994
|
|
|
|
21,814
|
|
|
$
|
1,199,988
|
|
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
9,998
|
|
|
$
|
549,990
|
|
|
|
19,996
|
|
|
$
|
1,099,980
|
|
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
9,089
|
|
|
$
|
499,986
|
|
|
|
18,179
|
|
|
$
|
1,000,027
|
|
|
|
|
|
|
Josh Drake,
Pres. of Antech Diagnostics
|
|
|
9,998
|
|
|
$
|
549,990
|
|
|
|
19,996
|
|
|
$
|
1,099,980
|
|
(1)
|
Implied values are based on the market value of the Companys common stock on the date of grant.
|
The
2015 RSUs earned in 2016 will vest in four installments, 25% (rounded up to the nearest whole share) on October 7, 2016, 2017, 2018 and 2019, provided the executive continues to be employed by us as an executive officer as of such date. The
earned portion of any executive officers equity performance award will cease to vest on such date as such executive officer ceases to be employed by us as an executive officer and shall not continue to vest during the pendency of any
non-senior
executive employment with, or consultancy arrangement with, us. As a consequence, the ultimate value of the awards will depend on the performance of the Companys stock over this four-year period.
Long-Term Equity Incentive Awards Granted in 2016
In 2016, the Compensation Committee granted our executives two separate awards of performance-contingent restricted stock units representing the right to
receive shares of Company common stock (the
2016
Equity
Awards
or the
2016
RSUs
), with each award having different performance criteria. The 2016 RSUs are paid in common stock based upon
attainment of specific business objectives over the relevant performance periods. The RSUs are subject to both performance-based and time-based vesting.
In determining the number of RSUs subject to the 2016 Equity Awards, the Compensation Committee considered our Chief Executive Officers recommendations
for all of our executive officers (other than himself).
20
The total annual long-term incentive opportunity for each of our executives is established by the Compensation
Committee in terms of dollars. For each award, a market competitive grant is determined by dividing the value of each equity award by the market value of the Companys common stock for RSUs, as of the date of grant.
For the first 2016 Equity Award the Compensation Committee selected the absolute performance metric of Adjusted EBITDA. While for the second 2016 Equity Award
the Compensation Committee selected a relative performance metric which looks at the performance of our stock against the performance of the Russell 3000
®
Index. The Compensation Committee
selected these performance metrics because they indicate the level of success of the Companys strategy to sustain strong operating cash flows and profitability and the level of increase in stockholder value. The Compensation Committee used
Adjusted EBITDA, rather than EBITDA, because it excludes the effect of significant items that the Compensation Committee believes are not representative of our core operations for the period presented.
Adjusted EBITDA is a
non-GAAP
financial measure of performance. Adjusted EBITDA should not be reviewed in isolation or
considered as substitutes for our financial results as reported in accordance with GAAP. Although Adjusted EBITDA is a relatively standard financial term, numerous methods exist for calculating these financial measures. As a result, the method used
by the Companys management may differ from the methods other companies use to calculate Adjusted EBITDA and we urge you to understand the methods used by other companies to calculate Adjusted EBITDA before comparing our results to that of such
other companies. Please see
Appendix A
for a reconciliation of these
non-GAAP
financial measures to the applicable GAAP financial measures.
Adjusted EBITDA 2016 Equity Award
The Compensation
Committee established minimum, target and maximum performance levels for the Adjusted EBITDA 2016 Equity Award. The performance levels are the same for each of our executives. The 2016 RSUs allocated to the
Adjusted EBITDA 2016 Equity Award are earned upon achievement of this performance metric at each of the specified levels of performance. For achievement between the minimum and target performance goals and the target and maximum performance goals,
the number of 2016 RSUs earned is determined on an interpolated basis.
Up to 50% of the maximum number of Adjusted EBITDA 2016 RSUs awarded can be earned
by satisfying the performance goals with respect to performance in 2016. The remaining Adjusted EBITDA 2016 Equity Award 2016 RSUs (including any 2016 Adjusted EBITDA RSUs not earned in 2016) can be earned by satisfying the performance metrics with
respect to performance in either 2017 or 2018, which looks at Adjusted EBITDA for the
12-month
periods ending December 31, 2017 and 2018. The Adjusted EBITDA targets for 2017 and 2018 were established at
the time of grant and represent cumulative targeted growth in our operations.
The Adjusted EBITDA 2016 RSUs which may be earned upon achievement of the
pre-established
Adjusted EBITDA performance goal for the 2016 performance period are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum
Performance Goal
|
|
|
Target
Performance Goal
|
|
|
Maximum
Performance Goal
|
|
Executive Officer
|
|
RSUs
|
|
|
Implied
Value
(1)
|
|
|
RSUs
|
|
|
Implied
Value
(1)
|
|
|
RSUs
|
|
|
Implied
Value
(1)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
21,790
|
|
|
$
|
1,500,000
|
|
|
|
30,506
|
|
|
$
|
2,100,000
|
|
|
|
41,400
|
|
|
$
|
2,850,000
|
|
|
|
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
6,900
|
|
|
$
|
475,000
|
|
|
|
7,990
|
|
|
$
|
550,000
|
|
|
|
10,459
|
|
|
$
|
720,000
|
|
|
|
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
5,811
|
|
|
$
|
400,000
|
|
|
|
6,900
|
|
|
$
|
475,000
|
|
|
|
8,135
|
|
|
$
|
560,000
|
|
|
|
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
5,811
|
|
|
$
|
400,000
|
|
|
|
6,900
|
|
|
$
|
475,000
|
|
|
|
7,699
|
|
|
$
|
530,000
|
|
|
|
|
|
|
|
|
Josh Drake,
Pres. of Antech
|
|
|
5,811
|
|
|
$
|
400,000
|
|
|
|
6,900
|
|
|
$
|
475,000
|
|
|
|
7,699
|
|
|
$
|
530,000
|
|
(1)
|
Implied values are based on the market value of the Companys common stock on the date of grant.
|
21
The Compensation Committee believed that the performance required to earn an award at the minimum performance
goal was reasonably attainable, but that the performance required to earn an award at the target performance goal and maximum performance goal was more challenging.
The chart below sets out the Adjusted EBITDA established in connection with the 2016 Equity Awards for the 2016 performance period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Metric
|
|
Minimum
|
|
|
Target
|
|
|
Maximum
|
|
|
Actual Results
|
|
Adjusted EBITDA
|
|
$
|
477.0m
|
|
|
$
|
484.0m
|
|
|
$
|
490.0m
|
|
|
$
|
506.0m
|
|
In February 2017, the Compensation Committee certified that with respect to the 2016 performance period for the Adjusted
EBITDA 2016 Equity Award the maximum performance level was achieved. As a result, each of our executive officers earned that number of Adjusted EBITDA 2016 RSUs set forth below for performance in 2016.
|
|
|
|
|
|
|
|
|
Executive Officer
|
|
Number of
2016 RSUs Earned
|
|
|
Implied Value
(1)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
20,700
|
|
|
$
|
1,424,988
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
5,230
|
|
|
$
|
360,033
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
4,068
|
|
|
$
|
280,041
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
3,850
|
|
|
$
|
265,034
|
|
Josh Drake,
Pres. of Antech
|
|
|
3,850
|
|
|
$
|
265,034
|
|
(1)
|
Implied values are based on the market value of the Companys common stock on the date of grant.
|
The
Adjusted EBITDA 2016 RSUs earned will vest in four installments, 25% (rounded up to the nearest whole share) on September 9, 2017, 2018, 2019 and 2020, provided the executive continues to be employed by us as an executive officer as of such
date. The earned portion of any executive officers equity performance award will cease to vest on such date as such executive officer ceases to be employed by us as an executive officer and shall not continue to vest during the pendency of any
non-senior
executive employment with, or consultancy arrangement with, us. As a consequence, the ultimate value of the awards will depend on the performance of the Companys stock over this four-year
period.
Russell 3000
®
2016 Equity Award
For the Russell 3000
®
2016 Equity Award, 100% of the RSUs granted will be earned if the growth in the
closing price of our common stock over either the
2-year
or
3-year
periods following the grant of the award equals or exceeds the growth in the closing price of the
Russell 3000
®
Index over the same period.
|
|
|
|
|
|
|
|
|
|
|
Performance Goal
|
|
Executive Officer
|
|
RSUs
|
|
|
Implied Value
(1)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
63,190
|
|
|
$
|
4,350,000
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
15,543
|
|
|
$
|
1,070,000
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
12,347
|
|
|
$
|
850,000
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
11,621
|
|
|
$
|
800,000
|
|
Josh Drake,
Pres. of Antech
|
|
|
11,621
|
|
|
$
|
800,000
|
|
(1)
|
Implied values are based on the market value of the Companys common stock on the date of grant.
|
22
The Compensation Committee believed that the performance required to earn an award at the performance goal was
reasonably attainable. As the initial performance period for the Russell 3000
®
2016 Equity Award does not end until September 2018 no Russell
3000
®
2016 RSUs were earned in 2016.
Potential Payments upon Change in Control in
Connection with the Merger
As detailed under Employment Agreements; Post-Retirement Medical Benefits Coverage Agreements; Post-Termination
Consulting Agreements; SERP Agreements; Payments Upon Termination and Change in Control starting on page 32 of this Amendment, certain of our executive officers will be entitled to payments under their existing employment agreements and
vesting of unvested equity awards related to the Change in Control of the Company if the Merger (as defined in the
Merger Agreement
section in the Original Form
10-K)
closes. The Merger Agreement (as
defined in the
Merger Agreement
section in the Original Form
10-K)
and the Merger are described in greater detail in the Companys Definitive Proxy Statement for the special meeting filed on
February 15, 2017 with the SEC, and other materials and documents filed with the SEC, all of which are available on the SECs website at www.sec.gov. Completion of the Merger is subject to customary closing conditions contained in the
Merger Agreement, including receipt of the remaining outstanding required regulatory approvals.
A
DDITIONAL
C
OMPENSATION
M
ATTERS
Use of Market Data
In establishing the 2016 annual
compensation for our executives, the Compensation Committee did not engage in any formal benchmarking analysis. However, the Compensation Committee did take into account changes in compensation levels for similar positions within the Companys
Comparison Group (as further described below) in setting 2016 base salaries, annual cash incentive awards and/or cash bonuses and equity awards for our executives.
In 2012, the Compensation Committees former compensation consultant, Mercer, assisted the Compensation Committee in updating the Companys
Comparison Group. Mercer selected and proposed companies for inclusion in the Comparison Group that, at that time, had similar revenues, revenue growth, business focus and operating models as compared to the Company. The Compensation Committee
reviewed Mercers proposals and selected the following Comparison Group:
|
|
|
|
|
C.R. Bard, Inc.
|
|
Chipotle Mexican Grill, Inc.
|
|
Chicos FAS, Inc.
|
GNC Holdings, Inc.
|
|
Guess?, Inc.
|
|
HealthSouth Corporation
|
Hologic, Inc.
|
|
Idexx Laboratories, Inc.
|
|
The Cheesecake Factory Incorporated
|
Magellan Health, Inc.
|
|
Mednax, Inc.
|
|
|
Our Comparison Group, which was not updated in 2016, includes 11 companies (named above) that, at the time the Comparison
Group was established, had similar revenues, revenue growth, business focus and operating models as the Company. There are only a small number of animal health care companies that are public, so the Compensation Committee included in the Comparison
Group companies in the healthcare industry and growth companies in other industries that require multiple locations and a large employee base, such as retail, restaurants, leisure facilities and specialty stores, with a focus on companies with a
revenue base of between $600 million and $3.0 billion.
23
In addition to taking into account compensation levels for similar positions within the Companys Comparison
Group, the Compensation Committee reviews each executives historical compensation, the executives compensation in relation to other executive officers and corporate performance. The Compensation Committee also takes into account internal
equity considerations in making its executive compensation decisions.
Supplemental Executive Retirement Programs
We have entered into SERPs with our four most senior executive officers in recognition of their more than 20 years of service to the Company and to provide
continued incentives to retain their services. Prior to 2010, the Company had not provided any deferred compensation or other retirement benefit for the applicable executives, other than continuation of medical coverage. The SERPs were structured so
that full payment benefits vested over periods ranging from
3-5
years, which provided an additional retention incentive for our four most senior executives. The SERPs are now fully vested for each of our four
most senior executives. Details of the SERP benefits and the amounts accrued by each applicable executive officer are found under the heading Pension Benefits starting on page 31 of this Amendment.
Post-Termination Consulting Agreements
We have
entered into agreements with our Chief Executive Officer and Chief Operating Officer for the provision of consulting services following the termination of their service to the Company. Each of the Chief Executive Officer and the Chief Operating
Officer has been employed by the Company since it was founded. These agreements are intended to effect a smooth and orderly transition of the duties and leadership to their successors, to allow the Company to take advantage of their special
knowledge of the industry, the Company and our customers and to protect trade secret information obtained by the officers during the course of their employment during the term of their consulting agreements and thereafter. Each agreement was
reviewed and approved by the Compensation Committee and subsequently by the full Board of Directors. Details of the consulting agreements are described under Employment Agreements; Post-Retirement Medical Benefits Coverage Agreements;
Post-Termination Consulting Agreements; SERP Agreements; Payments Upon Termination and Change in Control starting on page 32 of this Amendment.
Termination and Change in Control Payments
We
have entered into employment agreements with three of our executive officers and into severance agreements with our other two executive officers. These agreements, which are designed to promote stability and continuity of senior management, provide
for termination and Change in Control payments. We also have entered into post-retirement medical benefits coverage agreements with our four most senior executive officers as recognition of each officers extended service to the Company. A
summary of these severance payments and post-termination benefits is set forth under the heading Employment Agreements; Post-Retirement Medical Benefits Coverage Agreements; Post-Termination Consulting Agreements; SERP Agreements; Payments
Upon Termination and Change in Control starting on page 32 of this Amendment.
Policy on Recovering Performance-Based Compensation in the
Event of a Restatement
We may, to the extent permitted by applicable law, cancel or require reimbursement of any performance-based compensation
arrangements (including any performance based annual bonus awards and long-term incentive, equity-based awards) received by an executive officer if and to the extent that:
|
|
|
the amount of the award was based on the achievement of specified performance metrics or financial results, and we subsequently restate those financial results; and
|
|
|
|
in the Compensation Committees judgment, the executive officer engaged in gross negligence, fraud or misconduct that directly caused or contributed to the need for the restatement; and
|
|
|
|
the executive officers award would have been lower if the financial results in question had been properly reported. In such a case, we will seek to recover from the executive officer the amount by which the actual
award paid or earned for the relevant period exceeded the amount that would have been paid or earned based on the restated financial results.
|
24
The policy provides that we will not seek to recover compensation paid more than three years prior to the date
the applicable restatement is disclosed.
Further, under Section 304 of the Sarbanes-Oxley Act, if we were required to restate our financial results
due to material noncompliance with any financial reporting requirements as a result of misconduct, the Chief Executive Officer and Chief Financial Officer could be required to reimburse the Company for:
|
|
|
any bonus or other incentive-based or equity-based compensation received during the twelve months following the first public issuance or filing with the SEC of the
non-complying
document; and
|
|
|
|
any profits realized from the sale of securities of the Company during those twelve months.
|
Stock
Ownership
Our Board of Directors believes that our executive officers and directors should have a meaningful stake in our Company, which
encourages a focus on our long-term success and aligns their interests with the interests of our stockholders. Therefore, we have adopted formal stock ownership and retention guidelines for our executive officers and
non-employee
directors:
|
|
|
Position
|
|
Minimum Ownership Guidelines
(Dollar Value of Shares)
|
Directors
|
|
4x Annual Cash Retainer
|
Chief Executive Officer
|
|
4x Base Salary
|
Other Named Executive Officers
|
|
2x Base Salary
|
Shares owned outright, unvested restricted stock and vested options are counted towards these guidelines. Unearned performance
shares are not counted toward these guidelines.
Any executive officer who is not in compliance with the applicable stock ownership guideline must retain
50% of the net shares of our common stock acquired via the exercise of options or the vesting of restricted stock granted under the Companys equity incentive programs, until the guideline has been met.
As of December 31, 2016, all of our directors and executive officers complied with our stock ownership guidelines.
25
Tax Implications
The Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which
provides that the Company may not deduct
non-performance
based compensation of more than $1,000,000 that is paid to certain executive officers. However, in order to maintain flexibility in compensating our
executives in a manner designed to promote varying corporate goals, we have not adopted a policy that all compensation must be deductible.
S
UMMARY
C
OMPENSATION
T
ABLE
The following table sets forth all compensation paid or earned by Named Executive Officers for services rendered to us for the years ended December 31,
2016, 2015, and 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan
Compensation
|
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
|
|
|
Robert L. Antin
,
Chairman of the Board, Chief Executive Officer and President
|
|
|
2016
|
|
|
$
|
1,072,988
|
|
|
|
|
|
|
$
|
6,450,033
|
(6)
|
|
|
|
|
|
$
|
2,742,375
|
|
|
|
|
|
|
$
|
141,072
|
|
|
$
|
10,406,468
|
|
|
|
2015
|
|
|
$
|
1,031,391
|
|
|
|
|
|
|
$
|
4,300,022
|
(6)
|
|
|
|
|
|
$
|
2,535,000
|
|
|
$
|
274,402
|
|
|
$
|
91,397
|
|
|
$
|
8,232,212
|
|
|
|
2014
|
|
|
$
|
999,735
|
|
|
|
|
|
|
$
|
3,800,034
|
(6)
|
|
|
|
|
|
$
|
1,800,000
|
|
|
$
|
219,151
|
|
|
$
|
87,831
|
|
|
$
|
6,906,751
|
|
|
|
|
|
|
|
|
|
|
|
Arthur J. Antin
,
Chief Operating Officer and Senior Vice President
|
|
|
2016
|
|
|
$
|
669,988
|
|
|
|
|
|
|
$
|
1,620,012
|
(7)
|
|
|
|
|
|
$
|
684,950
|
|
|
|
|
|
|
$
|
144,344
|
|
|
$
|
3,119,294
|
|
|
|
2015
|
|
|
$
|
653,645
|
|
|
|
|
|
|
$
|
1,000,027
|
(7)
|
|
|
|
|
|
$
|
591,850
|
|
|
$
|
(159,834
|
)
|
|
$
|
91,478
|
|
|
$
|
2,177,166
|
|
|
|
2014
|
|
|
$
|
636,652
|
|
|
|
|
|
|
$
|
1,000,031
|
(7)
|
|
|
|
|
|
$
|
620,000
|
|
|
$
|
(149,802
|
)
|
|
$
|
86,836
|
|
|
$
|
2,193,717
|
|
|
|
|
|
|
|
|
|
|
|
Tomas W. Fuller
,
Chief Financial Officer, Vice President and Secretary
|
|
|
2016
|
|
|
$
|
458,413
|
|
|
|
|
|
|
$
|
1,324,963
|
(8)
|
|
|
|
|
|
$
|
468,650
|
|
|
$
|
81,900
|
|
|
$
|
87,023
|
|
|
$
|
2,420,949
|
|
|
|
2015
|
|
|
$
|
442,689
|
|
|
$
|
29,575
|
|
|
$
|
874,989
|
(8)
|
|
|
|
|
|
$
|
425,425
|
|
|
$
|
138,816
|
|
|
$
|
31,075
|
|
|
$
|
1,942,569
|
|
|
|
2014
|
|
|
$
|
429,464
|
|
|
|
|
|
|
$
|
825,009
|
(8)
|
|
|
|
|
|
$
|
396,000
|
|
|
$
|
363,748
|
|
|
$
|
76,677
|
|
|
$
|
2,090,898
|
|
|
|
|
|
|
|
|
|
|
|
Neil Tauber
,
Senior Vice President of Development
|
|
|
2016
|
|
|
$
|
458,413
|
|
|
|
|
|
|
$
|
1,274,986
|
(9)
|
|
|
|
|
|
$
|
468,650
|
|
|
$
|
81,900
|
|
|
$
|
118,136
|
|
|
$
|
2,402,085
|
|
|
|
2015
|
|
|
$
|
442,689
|
|
|
$
|
29,575
|
|
|
$
|
874,989
|
(9)
|
|
|
|
|
|
$
|
425,425
|
|
|
$
|
165,905
|
|
|
$
|
116,929
|
|
|
$
|
2,055,512
|
|
|
|
2014
|
|
|
$
|
429,464
|
|
|
|
|
|
|
$
|
825,009
|
(9)
|
|
|
|
|
|
$
|
396,000
|
|
|
$
|
434,732
|
|
|
$
|
113,210
|
|
|
$
|
2,198,415
|
|
|
|
|
|
|
|
|
|
|
|
Josh Drake
,
President, Antech Diagnostics
|
|
|
2016
|
|
|
$
|
418,312
|
|
|
|
|
|
|
$
|
1,274,986
|
(10)
|
|
|
|
|
|
$
|
295,610
|
|
|
|
|
|
|
$
|
61,643
|
|
|
$
|
2,050,551
|
|
|
|
2015
|
|
|
$
|
409,000
|
|
|
$
|
29,575
|
|
|
$
|
874,989
|
(10)
|
|
|
|
|
|
$
|
246,000
|
|
|
|
|
|
|
$
|
60,440
|
|
|
$
|
1,620,004
|
|
|
|
2014
|
|
|
$
|
377,885
|
|
|
$
|
82,875
|
|
|
$
|
825,009
|
(10)
|
|
|
|
|
|
$
|
190,125
|
|
|
|
|
|
|
$
|
34,073
|
|
|
$
|
1,509,967
|
|
(1)
|
In accordance with SEC requirements, these amounts reflect the aggregate grant date fair value computed in accordance with the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic 718 related to awards to executive officers in 2016, 2015, and 2014. No estimate of forfeitures has been included in such calculations. For the assumptions used in the calculation of these amounts see Note 10 to the Companys
audited financial statements in the Companys Original Form
10-K.
|
(2)
|
The amounts in this column represent the cash awards paid for the applicable year to the Named Executive Officers under the Companys annual cash incentive plans. The Companys annual cash incentive plans are
discussed in further detail on starting on page 14 and page 16 of this Amendment. For complete discussion of the VCA Inc. 2007 Annual Cash Incentive Plan, please see our 2015 Proxy Statement.
|
(3)
|
The amounts in this column represent the aggregate change in the actuarial present value of each Named Executive Officers accumulated benefit under his SERP. Additionally, the amounts in this column for
Mr. Tauber and Mr. Fuller reflect an increase in the vested percentage under each of their SERPs. Details of the SERP benefits and the amounts accrued by each applicable Named Executive Officer are found under the heading Pension
Benefits starting on page 31 of this Amendment.
|
26
(4)
|
All Other Compensation for the year ended December 31, 2016, consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert L. Antin
|
|
|
Arthur J. Antin
|
|
|
Tomas W. Fuller
|
|
|
Neil Tauber
|
|
|
Josh Drake
|
|
Automobile, auto insurance and auto maintenance (a)
|
|
$
|
63,046
|
|
|
$
|
54,692
|
|
|
$
|
48,964
|
|
|
$
|
49,124
|
|
|
$
|
39,517
|
|
Medical insurance premiums
|
|
$
|
59,246
|
|
|
$
|
75,532
|
|
|
$
|
36,779
|
|
|
$
|
67,732
|
|
|
$
|
22,126
|
|
401(k) Company contribution
|
|
$
|
1,280
|
|
|
$
|
1,280
|
|
|
$
|
1,280
|
|
|
$
|
1,280
|
|
|
|
|
|
Club membership
|
|
$
|
17,500
|
|
|
$
|
12,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
141,072
|
|
|
$
|
144,344
|
|
|
$
|
87,023
|
|
|
$
|
118,136
|
|
|
$
|
61,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For disclosure purposes, the incremental annual cost of the Company owned automobile was determined based on the purchase price of the vehicle divided by the useful life of the vehicle. Approximately ten percent of the
incremental annual cost of the Company owned automobile relates to personal use and is considered compensation of the Named Executive Officers.
|
(5)
|
These amounts reflect the grant date fair values based upon achievement of the target performance goal for 2016, 2015 and 2014 performance awards. The amounts reported do not reflect compensation actually received by
Mr. R. Antin. If the highest level of performance were to be assumed the grant date values of the performance awards would be $7,199,976, $5,799,979 and $5,100,008 for the 2016, 2015 and 2014, performance periods, respectively. The grant date
fair values of the performance awards actually earned as of December 31, 2016 were $1,424,988, $5,799,979 and $5,100,008 for 2016, 2015 and 2014, respectively.
|
(6)
|
These amounts reflect the grant date fair values based upon achievement of the target performance goal for 2016, 2015 and 2014 performance awards. The amounts reported do not reflect compensation actually received by
Mr. A. Antin. If the highest level of performance were to be assumed the grant date values of the performance awards would be $1,789,978, $1,199,988 and $1,100,039 for the 2016, 2015 and 2014, performance periods, respectively. The grant date
fair values of the performance awards actually earned as of December 31, 2016 were $360,033, $1,199,988 and $1,100,039 for 2016, 2015 and 2014, respectively.
|
(7)
|
These amounts reflect the grant date fair values based upon achievement of the target performance goal for 2016, 2015 and 2014 performance awards. The amounts reported do not reflect compensation actually received by
Mr. Fuller. If the highest level of performance were to be assumed the grant date values of the performance awards would be $1,409,980, $1,099,980 and $900,024 for the 2016, 2015 and 2014, performance periods, respectively. The grant date fair
values of the performance awards actually earned as of December 31, 2016 were $280,041, $1,099,980 and $900,024 for 2016, 2015 and 2014, respectively.
|
(8)
|
These amounts reflect the grant date fair values based upon achievement of the target performance goal for 2016, 2015 and 2014 performance awards. The amounts reported do not reflect compensation actually received by
Mr. Tauber. If the highest level of performance were to be assumed the grant date values of the performance awards would be $1,329,989, $1,000,027 and $900,024 for the 2016, 2015 and 2014, performance periods, respectively. The grant date fair
values of the performance awards actually earned as of December 31, 2016 were $265,034, $1,000,027, and $900,024, for 2016, 2015 and 2014, respectively.
|
(9)
|
These amounts reflect the grant date fair values based upon achievement of the target performance goal for 2016, 2015 and 2014 performance awards. The amounts reported do not reflect compensation actually received by
Mr. Drake. If the highest level of performance were to be assumed the grant date values of the performance awards would be $1,329,989, $1,099,980 and $1,000,031 for the 2016, 2015 and 2014, performance periods, respectively. The grant date fair
values of the performance awards actually earned as of December 31, 2016 were $265,034, $1,099,980, and $1,000,031, for 2016, 2015 and 2014, respectively.
|
27
G
RANTS
OF
P
LAN
-B
ASED
A
WARDS
IN
F
ISCAL
2016
All equity grants to Named Executive Officers prior to 2015 were made under the VCA Inc. 2006 Equity Incentive Plan. All equity grants to Named Executive
Officers beginning in 2015 were made under the VCA Inc. 2015 Equity Incentive Plan. The following table sets forth certain information regarding the grant of plan-based equity awards made during the year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
|
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
|
|
|
Exercise
or Base
Price of
Option
Awards
|
|
|
Grant Date
Fair Value of
2016 Equity
Awards (3)
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Minimum
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
Robert L. Antin
|
|
|
9/9/16
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,790
|
|
|
|
30,506
|
|
|
|
41,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,100,000
|
|
|
|
9/9/16
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,350,000
|
|
Arthur J. Antin
|
|
|
9/9/16
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,900
|
|
|
|
7,990
|
|
|
|
10,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
550,000
|
|
|
|
9/9/16
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,070,000
|
|
Tomas W. Fuller
|
|
|
9/9/16
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,811
|
|
|
|
6,900
|
|
|
|
8,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
475,000
|
|
|
|
9/9/16
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
850,000
|
|
Neil Tauber
|
|
|
9/9/16
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,811
|
|
|
|
6,900
|
|
|
|
7,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
475,000
|
|
|
|
9/9/16
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
800,000
|
|
Josh Drake
|
|
|
9/9/16
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,811
|
|
|
|
6,900
|
|
|
|
7,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
475,000
|
|
|
|
9/9/16
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
800,000
|
|
(1)
|
The amounts shown in these rows reflect the total number of restricted stock units which may be earned at the minimum, target and maximum performance levels with respect to the Adjusted EBITDA performance-based
restricted stock unit awards granted to the Named Executive Officers in 2016. As described in greater detail starting on page 20 of this Amendment, the minimum represents the number of restricted stock units which may be earned upon achievement of
the low performance goal; the target represents the number of restricted stock units which may be earned upon achievement of the target performance goal; and the maximum represents the number of restricted stock units which may be earned
upon achievement of the high performance goal. Up to 50% of the maximum number of RSUs awarded can be earned by satisfying the performance goals in 2016. The restricted stock unit awards will vest in four installments: 25% (rounded up to
the nearest whole share) on September 9, 2017; 25% (rounded up to the nearest whole share) on September 9, 2018; 25% (rounded up to the nearest whole share) on September 9, 2019; and the remainder on September 9, 2020.
|
(2)
|
The amounts shown in these rows reflect the total number of restricted stock units which may be earned at the maximum performance levels with respect to the Russell
3000
®
performance-based restricted stock unit awards granted to the Named Executive Officers in 2016. As described in great detail starting on page 22 of this Amendment, 100% of the RSUs
granted will be earned if the growth in the closing price of our common stock over the
2-year
or
3-year
periods following the grant of the award equal or exceeds the
growth in the closing price of the Russell
3000
®
Index over the same period.
|
(3)
|
In accordance with SEC requirements, with respect to the restricted stock units, these amounts reflect the aggregate grant date fair value based upon achievement of the target performance goal, excluding the effect of
estimated forfeitures. The amounts reported do not reflect compensation actually received by the Named Executive Officers.
|
28
O
UTSTANDING
E
QUITY
A
WARDS
AT
2016 F
ISCAL
Y
EAR
-E
ND
The following table sets forth the number of securities underlying outstanding plan awards for each Named Executive Officer as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Grant
Date
|
|
|
Number of
Securities Underlying
Unexercised Options
|
|
|
Option
Exercise
Price
|
|
|
Option
Expiration
Date
|
|
|
Number of Shares or
Units of Stock That
Have Not Vested
|
|
|
Market Value of
Shares or Units of
Stock That
Have Not Vested
|
|
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
|
|
|
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have
Not
Vested
|
|
|
|
(#)
Exercisable
|
|
|
(#)
Unexercisable
|
|
|
($)
|
|
|
|
|
|
(#)
|
|
|
($)(1)
|
|
|
(#)
|
|
|
($)(1)
|
|
Robert L. Antin,
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,700
|
(2)
|
|
$
|
1,421,055
|
|
|
|
20,700
|
(6)
|
|
$
|
1,421,055
|
|
Chief Executive Officer
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
63,190
|
(7)
|
|
$
|
4,337,994
|
|
|
|
|
10/7/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79,075
|
(3)
|
|
$
|
5,428,499
|
|
|
|
|
|
|
|
|
|
|
|
|
10/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,299
|
(4)
|
|
$
|
4,482,776
|
|
|
|
|
|
|
|
|
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,888
|
(5)
|
|
$
|
3,356,161
|
|
|
|
|
|
|
|
|
|
|
|
|
8/27/2012
|
|
|
|
232,435
|
|
|
|
|
|
|
$
|
18.94
|
|
|
|
8/27/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arthur J. Antin,
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,230
|
(2)
|
|
$
|
359,040
|
|
|
|
5,229
|
(6)
|
|
$
|
358,971
|
|
Chief Operating Officer
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,543
|
(7)
|
|
$
|
1,067,027
|
|
|
|
|
10/7/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,360
|
(3)
|
|
$
|
1,123,114
|
|
|
|
|
|
|
|
|
|
|
|
|
10/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,086
|
(4)
|
|
$
|
967,004
|
|
|
|
|
|
|
|
|
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,828
|
(5)
|
|
$
|
811,992
|
|
|
|
|
|
|
|
|
|
|
|
|
8/27/2012
|
|
|
|
45,239
|
|
|
|
|
|
|
$
|
18.94
|
|
|
|
8/27/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tomas W. Fuller,
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,068
|
(2)
|
|
$
|
279,268
|
|
|
|
4,067
|
(6)
|
|
$
|
279,200
|
|
Chief Financial Officer
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,347
|
(7)
|
|
$
|
847,622
|
|
|
|
|
10/7/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,996
|
(3)
|
|
$
|
1,029,475
|
|
|
|
|
|
|
|
|
|
|
|
|
10/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,524
|
(4)
|
|
$
|
791,123
|
|
|
|
|
|
|
|
|
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,107
|
(5)
|
|
$
|
556,546
|
|
|
|
|
|
|
|
|
|
Neil Tauber,
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,850
|
(2)
|
|
$
|
264,303
|
|
|
|
3,849
|
(6)
|
|
$
|
264,234
|
|
Sr. VP of Development
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,621
|
(7)
|
|
$
|
797,782
|
|
|
|
|
10/7/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,633
|
(3)
|
|
$
|
935,905
|
|
|
|
|
|
|
|
|
|
|
|
|
10/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,524
|
(4)
|
|
$
|
791,123
|
|
|
|
|
|
|
|
|
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,322
|
(5)
|
|
$
|
502,655
|
|
|
|
|
|
|
|
|
|
Josh Drake,
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,850
|
(2)
|
|
$
|
264,303
|
|
|
|
3,849
|
(6)
|
|
$
|
264,234
|
|
Pres. of Antech Diagnostics
|
|
|
9/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,621
|
(7)
|
|
$
|
797,782
|
|
|
|
|
10/7/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,996
|
(3)
|
|
$
|
1,029,475
|
|
|
|
|
|
|
|
|
|
|
|
|
10/7/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,803
|
(4)
|
|
$
|
878,926
|
|
|
|
|
|
|
|
|
|
|
|
|
9/24/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,322
|
(5)
|
|
$
|
502,655
|
|
|
|
|
|
|
|
|
|
(1)
|
Calculated based on the closing price of the Companys common stock at the end of the year ended December 31, 2016.
|
29
(2)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2016 and which were earned upon satisfaction of the maximum performance criteria in 2016. The shares of
restricted stock reflected on the table (rounded up to the nearest whole share) will vest equally on September 9, 2017, September 9, 2018, September 9, 2019 and September 9, 2020.
|
(3)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2015 and which were earned upon satisfaction of the maximum performance criteria in 2015 and 2016. The shares
of restricted stock reflected on the table (rounded up to the nearest whole share) will vest equally on October 7, 2017, October 7, 2018 and October 7, 2019.
|
(4)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2014 and which were earned upon satisfaction of the applicable performance criteria in 2014, 2015 and 2016. The
shares of restricted stock reflected on the table (rounded up to the nearest whole share) will vest equally on October 7, 2017 and October 7, 2018.
|
(5)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2013 and which were earned upon satisfaction of the applicable performance criteria in 2013, 2014 and 2015. All
of the shares of restricted stock reflected on the table will vest in full on September 24, 2017.
|
(6)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2016 and which may be earned upon satisfaction of the maximum performance criteria in 2017 and 2018. If the
performance criteria are satisfied, these shares of restricted stock will vest in full no later than September 9, 2020.
|
(7)
|
This amount reflects shares underlying the restricted stock units granted to the Named Executive Officer in 2016 and which may be earned upon satisfaction of the maximum performance criteria in 2018 and 2019. If the
performance criteria are satisfied, these shares of restricted stock will vest in full no later than September 9, 2020.
|
Options
Exercised and Stock Vested in 2016
The
following table sets forth information regarding the stock option awards that were exercised by each of our Named Executive Officers and restricted stock awards that vested during the year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Named Executive Officer
|
|
Number of Shares
Acquired on Exercise
|
|
|
Value Realized
on Exercise
|
|
|
Number of Shares
Acquired on Vesting
|
|
|
Value
Realized on Vesting
|
|
|
|
(#)
|
|
|
($) (1)
|
|
|
(#)
|
|
|
($) ( 2)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
159,003
|
|
|
$
|
10,781,752
|
|
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
|
34,000
|
|
|
$
|
1,702,720
|
|
|
|
40,297
|
|
|
$
|
2,748,177
|
|
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
|
47,544
|
|
|
$
|
2,455,605
|
|
|
|
28,489
|
|
|
$
|
1,934,150
|
|
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
|
36,978
|
|
|
$
|
1,894,383
|
|
|
|
25,718
|
|
|
$
|
1,739,834
|
|
|
|
|
|
|
Josh Drake,
Pres. of Antech Diagnostics
|
|
|
8,584
|
|
|
$
|
455,574
|
|
|
|
26,137
|
|
|
$
|
1,762,218
|
|
(1)
|
The dollar amount represents the difference between the aggregate market price of the shares of common stock underlying the options at exercise and the aggregate exercise price of the options.
|
(2)
|
The dollar amount represents the aggregate market price of the shares of common stock on the vesting date.
|
30
P
ENSION
B
ENEFITS
The table below reflects benefits accrued under the
SERP for each of Robert L. Antin, Arthur J. Antin, Neil Tauber and Tomas W. Fuller as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named
Executive Officer
|
|
Name of Plan
|
|
Number of Years
of Credited
Service
|
|
|
Present Value of
Accumulated
Benefit
|
|
|
Payments
During
Last Year
|
|
|
|
(#)
|
|
|
($) (2)
|
|
|
($)
|
|
Robert L. Antin,
Chief Executive Officer
|
|
SERP for Robert L. Antin
|
|
|
(1
|
)
|
|
$
|
4,800,130
|
|
|
$
|
399,375
|
|
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
SERP for Arthur J. Antin
|
|
|
(1
|
)
|
|
$
|
2,424,806
|
|
|
$
|
316,500
|
|
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
SERP for Tomas W. Fuller
|
|
|
(1
|
)
|
|
$
|
1,926,338
|
|
|
$
|
0
|
|
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
SERP for Neil Tauber
|
|
|
(1
|
)
|
|
$
|
2,206,726
|
|
|
$
|
0
|
|
(1)
|
All participants have five or more years of credited service and are fully vested. Years of service is only used when determining vesting, and is not used for benefit accrual purposes after a participant is fully
vested.
|
(2)
|
For purposes of calculating the present value of the accumulated benefit for the SERP Beneficiaries, we used Final Salary as of December 31, 2016.
|
On June 30, 2010, the Company executed a SERP agreement with each of the following Named Executive Officers of the Company: Robert L. Antin, Arthur J.
Antin, Neil Tauber and Tomas W. Fuller (each, a SERP Beneficiary). Pursuant to each SERP agreement, each SERP Beneficiary will be entitled to monthly benefit payments when he reaches a specified age identified in the chart below (the
Benefit Commencement Date). The annual amount of the benefit payments to each SERP Beneficiary will be equal to the vested percentage, up to a maximum of 50%, of Final Salary as of the date his employment terminates. Final
Salary is equal to the greater of (i) annual base compensation paid in cash pursuant to the SERP Beneficiarys employment agreement or other employment arrangement with the Company immediately prior to the Benefit Commencement Date,
or (ii) the average annual base compensation paid in cash pursuant to the SERP Beneficiarys employment agreement for the three highest years during the ten year period ending on December 31st immediately preceding the Benefit Commencement
Date.
The vested percentage on the date each SERP Beneficiarys employment terminates is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP
Beneficiary
|
|
Benefit
Commencement
Date (1)
|
|
Vested
Percentage on
Effective Date
of SERP
|
|
|
Vested
Percentage
on 12/31/10
|
|
|
Vested
Percentage
on 12/31/11
|
|
|
Vested
Percentage
on 12/31/12
|
|
|
Vested
Percentage
on 12/31/13
|
|
|
Vested
Percentage
on 12/31/14
|
|
Robert L. Antin,
Chief Executive Officer
|
|
Age 66
|
|
|
20
|
%
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
Arthur J. Antin,
Chief Operating Officer
|
|
Age 67
|
|
|
20
|
%
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
Tomas W. Fuller,
Chief Financial Officer
|
|
Age 62
|
|
|
|
|
|
|
10
|
%
|
|
|
20
|
%
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
Neil Tauber,
Sr. VP of Development
|
|
Age 66
|
|
|
|
|
|
|
10
|
%
|
|
|
20
|
%
|
|
|
30
|
%
|
|
|
40
|
%
|
|
|
50
|
%
|
(1)
|
The Benefit Commencement Date is the first day of the calendar month following the month during which the SERP Beneficiary attains the age set forth in this column.
|
31
The payments to which each SERP Beneficiary is entitled will extend for 12 years following the Benefit
Commencement Date. Mr. A. Antin began receiving payments under his SERP agreement in 2014 and Mr. R. Antin began receiving payments under his SERP agreement in 2016. As of December 31, 2016, none of the other SERP Beneficiaries were
eligible for retirement under the SERP, because they had not reached the age that would trigger the Benefit Commencement Date. For further discussion regarding each SERP agreement, see Employment Agreements; Post-Retirement Medical Benefits
Coverage Agreements; Post-Termination Consulting Agreements; SERP Agreements; Payments Upon Termination and Change in Control below.
E
MPLOYMENT
A
GREEMENTS
; P
OST
-R
ETIREMENT
M
EDICAL
B
ENEFITS
C
OVERAGE
A
GREEMENTS
; P
OST
-T
ERMINATION
C
ONSULTING
A
GREEMENTS
; SERP A
GREEMENTS
; P
AYMENTS
U
PON
T
ERMINATION
AND
C
HANGE
IN
C
ONTROL
We have employment agreements with Robert L. Antin,
Arthur J. Antin and Tomas W. Fuller, and severance agreements with Neil Tauber and Josh Drake. Each of these agreements provide for certain payments upon termination of employment or a Change in Control. For purposes of this Amendment, a
Change in Control shall be deemed to have occurred if (a) there shall be consummated (x) any consolidation or merger of the Company into or with another person (as such term is used in Sections 13(d)(3) and 14(d)(2)
of Exchange Act) pursuant to which shares of the Companys common stock would be converted into cash, securities or other property, other than any consolidation or merger of the Company in which the persons who were stockholders of the Company
immediately prior to the consummation of such consolidation or merger are the beneficial owners (within the meaning of Rule
13d-3
under the Exchange Act), immediately following the consummation of such
consolidation or merger, of 62.5% or more of the combined voting power of the then outstanding voting securities of the person surviving or resulting from such consolidation or merger, or (y) any sale, lease or other transfer (in one
transaction or a series of related transactions) of all or substantially all of the assets of the Company, or (b) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company, or (c) any
person shall become the beneficial owner of 25% or more of the Companys outstanding common stock, or (d) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors
cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Companys stockholders, of each new director was approved by a vote of at least
two-thirds
of the directors then still in office who were directors at the beginning of the period.
If the proposed Merger is completed, it will constitute a
Change in Control of the Company, and certain of our executive officers will be entitled to payments under their existing employment or severance agreements, as applicable, related to the Change in Control of the Company. The Merger
Agreement and the Merger are described in greater detail in the Companys Definitive Proxy Statement for the special meeting filed on February 15, 2017 with the SEC, and other materials and documents filed with the SEC, all of which are
available on the SECs website at www.sec.gov. Completion of the Merger is subject to customary closing conditions contained in the Merger Agreement, including receipt of any remaining required regulatory approvals.
32
In addition, we have award agreements governing the equity awards made to our Named Executive Officers, and
post-retirement medical benefits coverage agreements, post-termination consulting agreements and SERP agreements with certain of our Named Executive Officers, as follows:
Robert L. Antin
Employment Agreement
Mr. R. Antins employment agreement, dated as of November 27, 2001, as amended, provides for Mr. R. Antin to serve as our Chairman of the
Board, Chief Executive Officer and President for a term of five years from any given date, such that there shall always be a minimum of at least five years remaining under his employment agreement. The employment agreement provides for Mr. R.
Antin to receive an annual base salary of $520,000, subject to annual increase based on comparable compensation packages provided to executives in similarly situated companies, and to participate in a bonus plan based on annual performance standards
to be established by the Compensation Committee. Mr. R. Antin also is entitled to specified perquisites.
If Mr. R. Antins employment is
terminated due to his death, the employment agreement provides that we will pay Mr. R. Antins estate his accrued and unpaid salary, his accrued and unused vacation and sick pay, his base salary during the scheduled term of the employment
agreement, continue to provide family medical benefits and accelerate the vesting of his equity awards that would have vested during the 24 months following the date of termination. If Mr. R. Antins employment is terminated due to his
disability, the employment agreement provides that we will pay Mr. R. Antin his accrued and unpaid salary, his accrued and unused vacation and sick pay, his remaining base salary during the remaining scheduled term of the employment agreement
(reduced by any amounts paid under long-term disability insurance policy maintained by us for the benefit of Mr. R. Antin), continue to provide specified benefits and perquisites and accelerate the vesting of his equity awards that would have
vested during the 24 months following the date of termination. In the case of termination due to death or disability, any options that accelerate on the date of termination will remain exercisable for the full term.
If Mr. R. Antin terminates the employment agreement for good reason, if we terminate the employment agreement without cause or in the event
of a Change in Control, in which event the employment of Mr. R. Antin terminates automatically, we will pay Mr. R. Antin a lump sum payment equal to the sum of (i) his accrued and unpaid salary, his accrued and unused vacation and
sick pay, (ii) his remaining base salary during the remaining scheduled term of the employment agreement and (iii) an amount equal to five times the greater of Mr. R. Antins last annual bonus or the average of all bonuses paid
or payable to Mr. R. Antin under the employment agreement. In addition, we will accelerate the vesting of his equity awards and continue to provide specified benefits and perquisites. In these circumstances, Mr. R. Antin may exercise his
options, which are accelerated on the date of termination, immediately upon termination and thereafter during the term of the option. For purposes hereof, good reason means as the result of (x) a willful breach of any of the
material obligations of the Company to Mr. R. Antin under his employment agreement, consulting agreement or SERP agreement, as applicable, or (y) the office where Mr. R. Antin is required to perform his duties to the Company is
relocated to a location outside of Los Angeles County, California; provided, however, that in either case Mr. R. Antin delivered written notice to the Company within 90 days of the conditions initial existence and the Company failed to
cure the condition within 30 days.
If Mr. R. Antin terminates the employment agreement without good reason or we terminate the employment agreement
for cause, Mr. R. Antin is entitled to receive all accrued and unpaid salary and other compensation and all accrued and unused vacation and sick pay. For purposes of this paragraph, for cause means for a conviction
(including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise, or (y) any crime of moral turpitude.
If any of the payments due Mr. R. Antin upon termination qualify as excess parachute payments under the Internal Revenue Code, Mr. R.
Antin also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
In the event of a Change in
Control and at our request, Mr. R. Antin is obligated to continue to serve under the same terms and conditions of his employment agreement for a period of up to 180 days following the termination date at his then-current base salary.
33
Post-Retirement Medical Benefits Coverage Agreement
Mr. R. Antins post-retirement medical benefits coverage agreement, effective as of December 27, 2007, and amended in January 2017, provides
that Mr. R. Antin and his family will continue to receive medical benefits coverage from the date employment is terminated until the last to occur of Mr. R. Antins death, the death of Mr. R. Antins spouse, or the end of
the month in which each of Mr. R. Antins children has a 30
th
birthday. The medical benefits coverage afforded to Mr. R. Antin and his family after the termination of his employment
will be at least as favorable as the most favorable level, type and basis of medical coverage provided to Mr. R. Antin and his family at any time during the five years prior to termination. Upon Mr. R. Antins eligibility for Medicare
or a similar program, Mr. R. Antin will have the option to enroll in Medicare or such similar program. If Mr. R. Antin or any eligible family member elects to enroll in such program, the Companys obligation under the post-retirement
medical benefits coverage agreement will be limited to providing Medicare supplementary coverage and Executive Medical Excess Claims Insurance or a substantially similar policy. If the continuation of medical benefits coverage is subject to taxation
under Section 409A(a)(1) of the Internal Revenue Code as a result of the failure of the post-retirement medical benefits coverage agreement to comply with Section 409A, the Company will make a payment to Mr. R. Antin equal to all
federal, state and local taxes incurred by Mr. R. Antin as a result thereof. In addition to the medical benefits coverage, Mr. R. Antin will for a period of seven years from the date employment is terminated continue to be eligible for pet
care benefits (currently, in the form of an employee discount) on the same terms as provided from time to time by the Company to its executive officers.
Post-Termination Consulting Agreement
Mr. R.
Antins consulting agreement, dated as of June 28, 2010, provides that Mr. R. Antin will provide business consulting and advice to the Company following his full-time employment with the Company. The term of Mr. R. Antins
consulting agreement commences on the date of Mr. R. Antins voluntary termination, i.e., resignation as Chief Executive Officer other than for good reason, following a Change in Control or resulting from Mr. R. Antins
disability, and continues for the next five years. Mr. R. Antin will receive annual compensation equal to 100% of his Final Compensation for the first and second years of the term of his consulting agreement, and 75% of his Final Compensation
during the third, fourth and fifth years of the term of his consulting agreement. Final Compensation is the greater of (i) Mr. R. Antins annual base compensation paid in cash immediately prior to Mr. R. Antins
voluntary termination, plus the highest bonus earned by Mr. R. Antin with respect to services rendered during the four preceding full calendar years before Mr. R. Antins voluntary termination, or (ii) the average of Mr. R.
Antins annual base compensation paid in cash plus any bonus earned with respect to services rendered during the two highest compensation years during the five-year period ending on December 31st immediately preceding Mr. R. Antins
voluntary termination. During the term of his consulting agreement, Mr. R. Antin also will be entitled to insurance and welfare benefits and certain other perquisites detailed in his consulting agreement.
If the consulting agreement is terminated as a result of his death or disability, or by the Company without cause, by Mr. R. Antin for good reason, or
upon a Change in Control, Mr. R. Antin will be entitled to a lump sum payment equal to the amount he would have earned over the remaining term of his consulting agreement. In addition, in such event, vesting will accelerate on all outstanding
stock options and other equity awards held by Mr. R. Antin (except that in the case of Mr. R. Antins death or disability only those awards that would otherwise have vested and become exercisable during the 24 months immediately
following the date of his death or disability, respectively, will accelerate). If any of the payments or benefits due Mr. R. Antin under his consulting agreement or any other plan, agreement or arrangement qualify as excess parachute
payments under the Internal Revenue Code, Mr. R. Antin also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
Furthermore, Mr. R. Antins consulting agreement provides that, during the period commencing on the date of his voluntary termination and continuing
in perpetuity, Mr. R. Antin is restricted from, directly or indirectly, divulging, disclosing or communicating any confidential information of any kind, nature or description regarding any matter affecting or relating to the business of the
Company, except in the ordinary course of the Companys business.
If Mr. R. Antin terminates his consulting agreement without good
reason or the Company terminates his consulting agreement with cause, Mr. R. Antin would not be entitled to any payments under his consulting agreement.
34
SERP Agreement
Mr. R. Antins SERP agreement, dated as of June 28, 2010, provides that Mr. R. Antin became entitled to monthly benefit payments when he
reached the age of 66 (i.e., the Benefit Commencement Date). Commencing on the Benefit Commencement Date, Mr. R. Antin is entitled to 144 monthly payments in an amount equal to 1/12
th
of the
applicable vested percentage of his Final Salary. However, if before or coincident with his separation from service (as defined Section
1.409A-1(h)(1)
of the Treasury Regulations) there occurs a
Change in Control, an involuntary termination by the Company without cause, a voluntary termination by Mr. R. Antin for good reason, or Mr. R. Antins death or disability, the applicable percentage will be fully vested at 50%. If
before the Benefit Commencement Date, there is a Change in Control that qualifies as a change in control event within the meaning of Treasury Regulation section
1.409A-3(i)(5)
or Mr. R. Antin
dies or becomes disabled, then the actuarial equivalent of the monthly benefits owing to Mr. R. Antin must be paid in a lump sum on the date of such event. In addition, if a Change in Control that is also a change in control event
occurs after the Benefit Commencement Date, then the SERP agreement terminates and the actuarial equivalent of any remaining monthly benefits owing to Mr. R. Antin must be paid in a lump sum on the date of such change in control event. For
further discussion regarding Mr. R. Antins SERP agreement, see Pension Benefits starting on page 31 of this Amendment.
The
following table describes the potential payments to Mr. Robert L. Antin upon termination or Change in Control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments & Benefits Upon
Termination (1)
|
|
Death
|
|
|
Disability
|
|
|
By Officer for
Good Reason
|
|
|
By Officer
Without
Good Reason
|
|
|
By Company
Without
Cause
|
|
|
By
Company
for Cause
|
|
|
Change in
Control
|
|
Accrued & Unpaid Salary (2)
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
|
$
|
42,190
|
|
Cash Severance (3)
|
|
$
|
5,484,750
|
|
|
$
|
5,482,670
|
|
|
$
|
17,962,555
|
|
|
|
|
|
|
$
|
17,962,555
|
|
|
|
|
|
|
$
|
17,962,555
|
|
Acceleration of Equity Awards (4)
|
|
$
|
21,352,347
|
|
|
$
|
21,352,347
|
|
|
$
|
21,352,347
|
|
|
|
|
|
|
$
|
21,352,347
|
|
|
|
|
|
|
$
|
21,352,347
|
|
Automobile
|
|
|
|
|
|
$
|
365,785
|
|
|
$
|
365,785
|
|
|
|
|
|
|
$
|
365,785
|
|
|
|
|
|
|
$
|
365,785
|
|
Club Membership
|
|
|
|
|
|
$
|
217,110
|
|
|
$
|
217,110
|
|
|
|
|
|
|
$
|
217,110
|
|
|
|
|
|
|
$
|
217,110
|
|
Group Life and Other Company Insurance Plans (5)
|
|
$
|
2,480
|
|
|
$
|
4,685
|
|
|
$
|
4,685
|
|
|
|
|
|
|
$
|
4,685
|
|
|
|
|
|
|
$
|
4,685
|
|
Post-Retirement Medical Benefits (6)
|
|
$
|
1,000,711
|
|
|
$
|
1,465,297
|
|
|
$
|
1,465,297
|
|
|
$
|
1,465,297
|
|
|
$
|
1,465,297
|
|
|
$
|
1,465,297
|
|
|
$
|
1,465,297
|
|
SERP Agreement
|
|
$
|
5,990,625
|
|
|
$
|
5,990,625
|
|
|
$
|
5,990,625
|
|
|
|
|
|
|
$
|
5,990,625
|
|
|
|
|
|
|
$
|
5,990,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
33,873,103
|
|
|
$
|
34,920,709
|
|
|
$
|
47,400,594
|
|
|
$
|
1,507,487
|
|
|
$
|
47,400,594
|
|
|
$
|
1,507,487
|
|
|
$
|
47,400,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Upon the termination of Mr. R. Antins employment or a Change in Control, Mr. R. Antin will receive a
lump-sum
payment consisting of (a) accrued and unpaid
salary, (b) accrued and unpaid vacation, (c) cash severance and (d) an additional amount to cover the tax consequences associated with excess parachute payments under the Internal Revenue Code, if any. All other payments
set forth above, other than those set forth in the Acceleration of Equity Awards and Post-Retirement Medical Benefits rows, will be paid over a five-year period. For example, during such five-year period, Mr. R. Antin
will receive an average annual payment of $73,157 towards the cost of an automobile.
|
(2)
|
Reflects Mr. R. Antins accrued and unpaid salary as of December 31, 2016.
|
(3)
|
For purposes of calculating the cash severance payable to Mr. R. Antin, we used Mr. R. Antins annual base salary as of December 31, 2016 ($1,096,950) and, by action of the Compensation Committee,
the annual bonus Mr. R. Antin was eligible to receive based on achievement of the performance goals established by the Compensation Committee for 2016 ($2,495,561).
|
(4)
|
As of December 31, 2016, 227,142 restricted stock units held by Mr. R. Antin were earned but unvested, and 83,890 restricted stock units held by Mr. R. Antin were unearned and unvested. Pursuant to the
terms of the applicable award agreements, upon the termination of Mr. R. Antins employment due to death, disability, by the Company without cause, by Mr. R. Antin for good reason, or upon a Change in Control,
all of the unvested equity awards held by Mr. R. Antin will accelerate.
|
(5)
|
Consists of payment of vision, death, disability and long-term disability insurance premiums for Mr. R. Antin.
|
(6)
|
Consists of projected future costs of medical and dental insurance premiums to be paid on behalf of Mr. R. Antin or his spouse (assuming a life expectancy for his spouse of 22 years as of December 31, 2016),
including projected annual costs for (a) executive medical excess claims insurance coverage for the period commencing on January 1, 2017 and ending on December 31, 2021 and (b) Medicare and Medicare supplement premiums for the
period commencing on January 1, 2022 and ending on December 31, 2038.
|
35
Arthur J. Antin
Employment Agreement
Mr. A. Antins employment
agreement, dated as of November 27, 2001, as amended, provides for Mr. A. Antin to serve as our Chief Operating Officer, Senior Vice President and Secretary for a term equal to three years from any given date, such that there shall always
be a minimum of at least three years remaining under his employment agreement. (Mr. A. Antin no longer serves as the Companys Secretary.) The employment agreement provides for Mr. A. Antin to receive an annual base salary of
$416,000, subject to annual increase based on comparable compensation packages provided to executives in similarly situated companies, and to participate in a bonus plan based on annual performance standards to be established by our Compensation
Committee. Mr. A. Antin also is entitled to specified perquisites.
If Mr. A. Antins employment is terminated due to his death, the
employment agreement provides that we will pay Mr. A. Antins estate his accrued and unpaid salary, his accrued and unused vacation and sick pay, his base salary during the scheduled term of the employment agreement, continue to provide
family medical benefits and accelerate the vesting of his equity awards that would have vested during the 24 months following the date of termination. If Mr. A. Antins employment is terminated due to his disability, the employment
agreement provides that we will pay Mr. A. Antin his accrued and unpaid salary, his accrued and unused vacation and sick pay, his remaining base salary during the remaining scheduled term of the employment agreement (reduced by any amounts paid
under long-term disability insurance policy maintained by us for the benefit of Mr. A. Antin), continue to provide specified benefits and perquisites and accelerate the vesting of his equity awards that would have vested during the 24 months
following the date of termination. In the case of termination due to death or disability, any option that is accelerated on the date of termination will remain exercisable for the full term.
If Mr. A. Antin terminates the employment agreement for good reason, if we terminate the employment agreement without cause or in
the event of a Change in Control, in which event the employment of Mr. A. Antin terminates automatically, we will pay Mr. A. Antin a lump sum payment equal to the sum of (i) his accrued and unpaid salary, his accrued and unused
vacation and sick pay, (ii) his remaining base salary during the remaining scheduled term of the employment agreement and (iii) an amount equal to three times the greater of Mr. A. Antins last annual bonus or the average of all
bonuses paid or payable to Mr. A. Antin under the employment agreement. In addition, we will accelerate the vesting of his equity awards and continue to provide specified benefits and perquisites. In these circumstances, Mr. A. Antin may
exercise his options that are accelerated on the date of termination during the full term of the option. For purposes hereof, good reason means as the result of (x) a willful breach of any of the material obligations of the Company
to Mr. A. Antin under his employment agreement, consulting agreement or SERP agreement, as applicable, or (y) the office where Mr. A. Antin is required to perform his duties to the Company is relocated to a location outside of Los
Angeles County, California; provided, however, that in either case Mr. A. Antin delivered written notice to the Company within 90 days of the conditions initial existence and the Company failed to cure the condition within 30 days.
If Mr. A. Antin terminates the employment agreement without good reason or we terminate the employment agreement for cause, Mr. A. Antin is entitled
to receive all accrued and unpaid salary and other compensation and all accrued and unused vacation and sick pay. For purposes of this paragraph, for cause means for a conviction (including any plea of guilty or no contest) of
(x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise, or (y) any crime of moral turpitude.
If any of the payments due Mr. A. Antin upon termination qualify as excess parachute payments under the Internal Revenue Code, Mr. A.
Antin also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
In the event of a Change in
Control and at our request, Mr. A. Antin is obligated to continue to serve under the same terms and conditions of his employment agreement for a period of up to 180 days following the termination date at his then-current base salary.
36
Post-Retirement Medical Benefits Coverage Agreement
Mr. A. Antins post-retirement medical benefits coverage agreement, effective as of December 27, 2007 and amended in January 2017, provides that
Mr. A. Antin and his family will continue to receive medical benefits coverage commencing on or after the date that Mr. A. Antin attains age 60 until the last to occur of Mr. A. Antins death, the death of Mr. A.
Antins spouse, or the end of the month in which each of Mr. A. Antins children has a 30
th
birthday. The medical benefits coverage afforded to Mr. A. Antin and his family
after the termination of his employment will be at least as favorable as the most favorable level, type and basis of medical coverage provided to Mr. A. Antin and his family at any time during the five years prior to termination. Upon
Mr. A. Antins eligibility for Medicare or a similar program, Mr. A. Antin will have the option to enroll in Medicare or such similar program. If Mr. A. Antin or any eligible family member elects to enroll in such program, the
Companys obligation under the post-retirement medical benefits coverage agreement will be limited to providing Medicare supplementary coverage and Executive Medical Excess Claims Insurance or a substantially similar policy. The coverage
provided by the Company is secondary to any employers group medical plan in which Mr. A. Antin or an eligible family member participates as an active employee, any employers group medical plan in which Mr. A. Antin is covered
as the spouse or dependent or an active employee, any individual medical benefits coverage under which Mr. A. Antin or an eligible family member is covered, or Medicare coverage. If the continuation of medical benefits coverage is subject to
taxation under Section 409A(a)(1) of the Internal Revenue Code as a result of the failure of the post-retirement medical benefits coverage agreement to comply with Section 409A, the Company will make a payment to Mr. A. Antin equal to
all federal, state and local taxes incurred by Mr. A. Antin as a result thereof. Furthermore, the Companys obligation to provide post-retirement medical benefits coverage to Mr. A. Antin will cease if he causes any person or entity
controlled by him to induce or attempt to induce (a) any employee of the Company or any of its affiliates to leave the Company or any of its affiliates or (b) any customer, supplier, vendor, licensee, distributor, contractor or other
business relation of the Company or any of its affiliates to cease doing business with, or knowingly adversely alter its business relationship with, the Company or any of its affiliates. In addition to the medical benefits coverage, Mr. A.
Antin will for a period of seven years from the date employment is terminated continue to be eligible for pet care benefits (currently, in the form of an employee discount) on the same terms as provided from time to time by the Company to its
executive officers.
Post-Termination Consulting Agreement
Mr. A. Antins consulting agreement, dated as of June 28, 2010, provides that Mr. A. Antin will provide business consulting and advice to
the Company following his full-time employment with the Company. The term of the Mr. A. Antins consulting agreement commences on the date of Mr. A. Antins voluntary termination, i.e., his resignation as Chief Operating Officer
and Senior Vice President other than for good reason, following a Change in Control or resulting from Mr. A. Antins disability, and continues for the next four years. Mr. A. Antin will receive annual compensation equal to 100% of his
Final Compensation for the first year of the term of his consulting agreement, 75% of his Final Compensation during the second year of the term, 50% of his Final Compensation during the third year of the term and 25% of his Final Compensation during
the fourth year of the term. Final Compensation is the greater of (i) Mr. A. Antins annual base compensation paid in cash immediately prior to Mr. A. Antins voluntary termination, plus the highest bonus earned
by Mr. A. Antin with respect to services rendered during the four preceding full calendar years before Mr. A. Antins voluntary termination or (ii) the average of Mr. A. Antins annual base compensation paid in cash
plus any bonus earned with respect to services rendered during the two highest compensation years during the five-year period ending on December 31st immediately preceding Mr. A. Antins voluntary termination. During the term of his
consulting agreement, Mr. A. Antin also will be entitled to insurance and welfare benefits and certain other perquisites detailed in his consulting agreement.
If the consulting agreement is terminated as a result of his death or disability, or by the Company without cause, by Mr. A. Antin for good reason, or
upon a Change in Control, Mr. A. Antin will be entitled to a lump sum payment equal to the amount he would have earned over the remaining term of the consulting agreement. In addition, in such event, vesting will accelerate on all outstanding
stock options and other equity awards held by Mr. A. Antin (except that in the case of Mr. A. Antins death or disability only those awards that would otherwise have vested and become exercisable during the 24 months immediately
following the date of his death or disability, respectively, will accelerate). If any of the payments or benefits due Mr. A. Antin under his consulting agreement or any other plan, agreement or arrangement qualify as excess parachute
payments under the Internal Revenue Code, Mr. A. Antin also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
37
Furthermore, Mr. A. Antins consulting agreement provides that, during the period commencing on the
date of his voluntary termination and continuing in perpetuity, Mr. A. Antin is restricted from, directly or indirectly, divulging, disclosing or communicating any confidential information of any kind, nature or description regarding any matter
affecting or relating to the business of the Company, except in the ordinary course of the Companys business.
If Mr. A. Antin terminates his
consulting agreement without good reason or the Company terminates his consulting agreement with cause, Mr. A. Antin would not be entitled to any payments under his consulting agreement.
SERP Agreement
Mr. A. Antins SERP agreement,
dated as of June 28, 2010, provides that Mr. A. Antin became entitled to monthly benefit payments when he reached the age of 67 (i.e., the Benefit Commencement Date). Commencing on the Benefit Commencement Date, Mr. A. Antin is
entitled to 144 monthly payments in an amount equal to 1/12
th
of the applicable vested percentage of his Final Salary. However, if before or coincident with his separation from service
(as defined Section
1.409A-1(h)(1)
of the Treasury Regulations) there occurs a Change in Control, an involuntary termination by the Company without cause, a voluntary termination by Mr. A. Antin for good
reason, or Mr. A. Antins death or disability, the applicable percentage will be fully vested at 50%. If before the Benefit Commencement Date, there is a Change in Control that qualifies as a change in control event within the
meaning of Treasury Regulation section
1.409A-3(i)(5)
or Mr. A. Antin dies or becomes disabled, then the actuarial equivalent of the monthly benefits owing to Mr. A. Antin must be paid in a lump sum
on the date of such event. In addition, if a Change in Control that is also a change in control event occurs after the Benefit Commencement Date, then the SERP agreement terminates and the actuarial equivalent of any remaining monthly
benefits owing to Mr. A. Antin must be paid in a lump sum on the date of such change in control event. For further discussion regarding Mr. A. Antins SERP agreement, see Pension Benefits starting on page 31 of this
Amendment.
The following table describes the potential payments to Mr. Arthur J. Antin upon termination or Change in Control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments & Benefits Upon
Termination (1)
|
|
Death
|
|
|
Disability
|
|
|
By Officer
for Good
Reason
|
|
|
By Officer
Without
Good Reason
|
|
|
By
Company
Without
Cause
|
|
|
By
Company
for Cause
|
|
|
Change in
Control
|
|
Accrued & Unpaid Salary (2)
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
|
$
|
26,344
|
|
Cash Severance (3)
|
|
$
|
2,054,850
|
|
|
$
|
2,053,602
|
|
|
$
|
3,904,215
|
|
|
|
|
|
|
$
|
3,904,215
|
|
|
|
|
|
|
$
|
3,904,215
|
|
Acceleration of Equity Awards (4)
|
|
$
|
4,874,356
|
|
|
$
|
4,874,356
|
|
|
$
|
4,874,356
|
|
|
|
|
|
|
$
|
4,874,356
|
|
|
|
|
|
|
$
|
4,874,356
|
|
Automobile
|
|
|
|
|
|
$
|
181,038
|
|
|
$
|
181,038
|
|
|
|
|
|
|
$
|
181,038
|
|
|
|
|
|
|
$
|
181,038
|
|
Club Membership
|
|
|
|
|
|
$
|
82,580
|
|
|
$
|
82,580
|
|
|
|
|
|
|
$
|
82,580
|
|
|
|
|
|
|
$
|
82,580
|
|
Group Life and Other Company Insurance Plans (5)
|
|
$
|
1,488
|
|
|
$
|
2,811
|
|
|
$
|
2,811
|
|
|
|
|
|
|
$
|
2,811
|
|
|
|
|
|
|
$
|
2,811
|
|
Post-Retirement Medical Benefits (6)
|
|
$
|
921,970
|
|
|
$
|
1,220,077
|
|
|
$
|
1,220,077
|
|
|
$
|
1,220,077
|
|
|
$
|
1,220,077
|
|
|
$
|
1,220,077
|
|
|
$
|
1,220,077
|
|
SERP Agreement
|
|
$
|
2,848,500
|
|
|
$
|
2,848,500
|
|
|
$
|
2,848,500
|
|
|
|
|
|
|
$
|
2,848,500
|
|
|
|
|
|
|
$
|
2,848,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
10,727,508
|
|
|
$
|
11,289,308
|
|
|
$
|
13,139,921
|
|
|
$
|
1,246,421
|
|
|
$
|
13,139,921
|
|
|
$
|
1,246,421
|
|
|
$
|
13,139,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Upon the termination of Mr. A. Antins employment or a Change in Control, Mr. A. Antin will receive a
lump-sum
payment consisting of (a) accrued and unpaid
salary, (b) accrued and unpaid vacation, (c) cash severance and (d) an additional amount to cover the tax consequences associated with excess parachute payments under the Internal Revenue Code, if any. All other payments
set forth above, other than those set forth in the Acceleration of Equity Awards and Post-Retirement Medical Benefits rows, will be paid over a three-year period. For example, during such three-year period, Mr. A. Antin
will receive an average annual payment of $60,346 towards the cost of an automobile.
|
(2)
|
Reflects Mr. A. Antins accrued and unpaid salary as of December 31, 2016.
|
(3)
|
For purposes of calculating the cash severance payable to Mr. A. Antin, we used Mr. A. Antins annual base salary as of December 31, 2016 ($684,950) and, by action of the Compensation Committee, the
annual bonus Mr. A. Antin was eligible to receive based on achievement of the performance goals established by the Compensation Committee for 2016 ($616,455).
|
(4)
|
As of December 31, 2016, 50,231 restricted stock units held by Mr. A. Antin were earned but unvested, and 20,772 restricted stock units held by Mr. A. Antin were unearned and unvested. Pursuant to the
terms of the applicable award agreements, upon the termination of Mr. A. Antins employment due to death, disability, by the Company without cause, by Mr. A. Antin for good reason, or upon a Change in Control,
all of the unvested equity awards held by Mr. A. Antin will accelerate.
|
38
(5)
|
Consists of payment of vision, death, disability and long-term disability insurance premiums for Mr. A. Antin.
|
(6)
|
Consists of projected future costs of medical and dental insurance premiums to be paid on behalf of Mr. A. Antin or his spouse (assuming a life expectancy for his spouse of 22 years as of December 31, 2016),
including projected annual costs for (a) executive medical excess claims insurance coverage for the period commencing on January 1, 2017 and ending on December 31, 2020 and (b) Medicare and Medicare supplement premiums for the
period commencing on January 1, 2021 and ending on December 31, 2038.
|
Tomas W. Fuller
Employment Agreement
Mr. Fullers employment
agreement dated as of November 27, 2001, as amended, provides for Mr. Fuller to serve as our Chief Financial Officer, Vice President and Assistant Secretary for a term equal to two years from any given date, such that there shall always be
a minimum of at least two years remaining under his employment agreement. (Mr. Fuller currently serves as the Companys Secretary.) The employment agreement provides for Mr. Fuller to receive an annual base salary of not less than
$208,000, subject to annual increase based on comparable compensation packages provided to executives in similarly situated companies, and to participate in a bonus plan based on annual performance standards to be established by our Compensation
Committee.
If Mr. Fullers employment is terminated due to his death, the employment agreement provides that we will pay Mr. Fullers
estate his accrued and unpaid salary, his accrued and unused vacation and sick pay, his base salary during the scheduled term of the employment agreement, continue to provide family medical benefits and accelerate the vesting of his equity awards
that would have vested during the 24 months following the date of termination. If Mr. Fullers employment is terminated due to his disability, the employment agreement provides that we will pay Mr. Fuller his accrued and unpaid
salary, his accrued and unused vacation and sick pay, his remaining base salary during the remaining scheduled term of the employment agreement (reduced by any amounts paid under long-term disability insurance policy maintained by us for the benefit
of Mr. Fuller), continue to provide specified benefits and perquisites and accelerate the vesting of his equity awards that would have vested during the 24 months following the date of termination. In the case of termination due to death or
disability, any options that are accelerated on the date of termination will remain exercisable for the full term.
If Mr. Fuller terminates the
employment agreement for good reason, if we terminate the employment agreement without cause or in the event of a Change in Control, in which event the employment of Mr. Fuller terminates automatically, we will pay
Mr. Fuller a lump sum payment equal to the sum of (i) his accrued and unpaid salary, his accrued and unused vacation and sick pay, (ii) his remaining base salary during the remaining scheduled term of the employment agreement and
(iii) an amount equal to two times the greater of Mr. Fullers last annual bonus or the average of all bonuses paid or payable to Mr. Fuller under the employment agreement. In addition, we will accelerate the vesting of his
equity awards and continue to provide specified benefits and perquisites; provided, however, that if we terminate Mr. Fullers employment agreement without cause, we will only accelerate the vesting of his equity awards that would have
vested during the 24 months following the date of termination. In these circumstances, Mr. Fuller may exercise his options that are accelerated on the date of termination for the full term of the option. For purposes hereof, good
reason means as the result of (x) a willful breach of any of the material obligations of the Company to Mr. Fuller under his employment agreement, consulting agreement or SERP agreement, as applicable, or (y) the office where
Mr. Fuller is required to perform his duties to the Company is relocated to a location outside of Los Angeles County, California; provided, however, that in either case Mr. Fuller delivered written notice to the Company within 90 days of
the conditions initial existence and the Company failed to cure the condition within 30 days.
If Mr. Fuller terminates the employment
agreement without good reason or we terminate the employment agreement for cause, Mr. Fuller is entitled to receive all accrued and unpaid salary and other compensation and all accrued and unused vacation and sick pay. For purposes hereof, for
cause means for a conviction (including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise, or (y) any crime of
moral turpitude.
39
If any of the payments due Mr. Fuller upon termination qualify as excess parachute payments
under the Internal Revenue Code, Mr. Fuller also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
In the event of a Change in Control and at our request, Mr. Fuller is obligated to continue to serve under the same terms and conditions of his
employment agreement for a period of up to 180 days following the termination date at his then-current base salary.
Post-Retirement Medical Benefits
Coverage Agreement
Mr. Fullers post-retirement medical benefits coverage agreement, effective as of December 27, 2007 and amended in
January 2017, provides that Mr. Fuller and his family will continue to receive medical benefits coverage commencing on or after the date that Mr. Fuller attains age 53 until the last to occur of Mr. Fullers death, the death of
Mr. Fullers spouse, or the end of the month in which each of Mr. Fullers children has a 30
th
birthday. The medical benefits coverage afforded to Mr. Fuller and his
family after the termination of his employment will be at least as favorable as the most favorable level, type and basis of medical coverage provided to Mr. Fuller and his family at any time during the five years prior to termination. Upon
Mr. Fullers eligibility for Medicare or a similar program, Mr. Fuller will have the option to enroll in Medicare or such similar program. If Mr. Fuller or any eligible family member elects to enroll in such program, the
Companys obligation under the post-retirement medical benefits coverage agreement will be limited to providing Medicare supplementary coverage and Executive Medical Excess Claims Insurance or a substantially similar policy. The coverage
provided by the Company is secondary to any employers group medical plan in which Mr. Fuller or an eligible family member participates as an active employee, any employers group medical plan in which Mr. Fuller is covered as
the spouse or dependent or an active employee, any individual medical benefits coverage under which Mr. Fuller or an eligible family member is covered, or Medicare coverage. If the continuation of medical benefits coverage is subject to
taxation under Section 409A(a)(1) of the Internal Revenue Code as a result of the failure of the post-retirement medical benefits coverage agreement to comply with Section 409A, the Company will make a payment to Mr. Fuller equal to
all federal, state and local taxes incurred by Mr. Fuller as a result thereof. In addition to the medical benefits coverage, Mr. Fuller will for a period of seven years from the date employment is terminated continue to be eligible for pet
care benefits (currently, in the form of an employee discount) on the same terms as provided from time to time by the Company to its executive officers.
Furthermore, the Companys obligation to provide post-retirement medical benefits coverage to Mr. Fuller will cease if he causes any person or
entity controlled by him to induce or attempt to induce (a) any employee of the Company or any of its affiliates to leave the Company or any of its affiliates or (b) any customer, supplier, vendor, licensee, distributor, contractor or
other business relation of the Company or any of its affiliates to cease doing business with, or knowingly adversely alter its business relationship with, the Company or any of its affiliates.
SERP Agreement
Mr. Fullers SERP agreement,
dated as of June 28, 2010, provides that Mr. Fuller will be entitled to monthly benefit payments when he reaches the age of 62 (i.e., the Benefit Commencement Date). Commencing on the Benefit Commencement Date, Mr. Fuller is entitled
to 144 monthly payments in an amount equal to 1/12
th
of the appropriate vested percentage of his Final Salary. However, if before or coincident with his separation from service (as
defined Section
1.409A-1(h)(1)
of the Treasury Regulations) there occurs a Change in Control, an involuntary termination by the Company without cause, a voluntary termination by Mr. Fuller for good
reason, or Mr. Fullers death or disability, the applicable percentage will be fully vested at 50%. If before the Benefit Commencement Date, there is a Change in Control that qualifies as a change in control event within the
meaning of Treasury Regulation section
1.409A-3(i)(5)
or Mr. Fuller dies or becomes disabled, then the actuarial equivalent of the monthly benefits owing to Mr. Fuller must be paid in a lump sum on
the date of such event. In addition, if a Change in Control that is also a change in control event occurs after the Benefit Commencement Date, then the SERP agreement terminates and the actuarial equivalent of any remaining monthly
benefits owing to Mr. Fuller must be paid in a lump sum on the date of such change in control event. For further discussion regarding Mr. Fullers SERP agreement, see Pension Benefits starting on page 31 of this Amendment.
40
The following table describes the potential payments to Mr. Tomas W. Fuller upon termination or
Change in Control.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments & Benefits Upon
Termination (1)
|
|
Death
|
|
|
Disability
|
|
|
By Officer
for Good
Reason
|
|
|
By Officer
Without
Good Reason
|
|
|
By
Company
Without
Cause
|
|
|
By
Company
for Cause
|
|
|
Change in
Control
|
|
Accrued & Unpaid Salary (2)
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
Cash Severance (3)
|
|
$
|
937,300
|
|
|
$
|
936,468
|
|
|
$
|
1,874,600
|
|
|
|
|
|
|
$
|
1,874,600
|
|
|
|
|
|
|
$
|
1,874,600
|
|
Acceleration of Equity Awards (4)
|
|
$
|
3,954,858
|
|
|
$
|
3,954,858
|
|
|
$
|
3,954,858
|
|
|
|
|
|
|
$
|
3,954,858
|
|
|
|
|
|
|
$
|
3,954,858
|
|
Automobile
|
|
|
|
|
|
$
|
105,395
|
|
|
$
|
105,395
|
|
|
|
|
|
|
$
|
105,395
|
|
|
|
|
|
|
$
|
105,395
|
|
Group Life and Other Company Insurance Plans (5)
|
|
$
|
726
|
|
|
$
|
1,608
|
|
|
$
|
1,608
|
|
|
|
|
|
|
$
|
1,608
|
|
|
|
|
|
|
$
|
1,608
|
|
Post-Retirement Medical Benefits (6)
|
|
$
|
701,018
|
|
|
$
|
1,653,088
|
|
|
$
|
1,653,088
|
|
|
$
|
1,653,088
|
|
|
$
|
1,653,088
|
|
|
$
|
1,653,088
|
|
|
$
|
1,653,088
|
|
SERP Agreement
|
|
$
|
2,811,900
|
|
|
$
|
2,811,900
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,423,827
|
|
|
$
|
9,481,342
|
|
|
$
|
10,419,474
|
|
|
$
|
1,671,113
|
|
|
$
|
10,419,474
|
|
|
$
|
1,671,113
|
|
|
$
|
10,419,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Upon the termination of Mr. Fullers employment or a Change in Control, Mr. Fuller will receive a
lump-sum
payment consisting of (a) accrued and unpaid salary,
(b) accrued and unpaid vacation, (c) cash severance and (d) an additional amount to cover the tax consequences associated with excess parachute payments under the Internal Revenue Code, if any. All other payments set forth
above, other than those set forth in the Acceleration of Equity Awards and Post-Retirement Medical Benefits rows, will be paid over a
two-year
period. For example, during such
two-year
period, Mr. Fuller will receive an average annual payment of $52,698 towards the cost of an automobile.
|
(2)
|
Reflects Mr. Fullers accrued and unpaid salary as of December 31, 2016.
|
(3)
|
For purposes of calculating the cash severance payable to Mr. Fuller, we used Mr. Fullers annual base salary as of December 31, 2016 ($468,650) and the annual bonus Mr. Fuller was eligible to
receive based on achievement of the performance goals established by the Compensation Committee for 2016 ($468,650).
|
(4)
|
As of December 31, 2016, 41,195 restricted stock units held by Mr. Fuller were earned but unvested, and 16,414 restricted stock units held by Mr. Fuller were unearned and unvested. Pursuant to the terms
of the applicable award agreements, upon the termination of Mr. Fullers employment due to death, disability, by the Company without cause, by Mr. Fuller for good reason, or upon a Change in Control, all of the
unvested equity awards held by Mr. Fuller will accelerate.
|
(5)
|
Consists of payment of vision, death, disability and long-term disability insurance premiums for Mr. Fuller.
|
(6)
|
Consists of projected future costs of medical and dental insurance premiums to be paid on behalf of Mr. Fuller (assuming a life expectancy of 24 years as of December 31, 2016), including (a) executive
medical excess claims insurance coverage for the period commencing on January 1, 2017 and ending on December 31, 2021 and (b) Medicare and Medicare supplement premiums for the period commencing on January 1, 2022 and ending on
December 31, 2040.
|
41
Neil Tauber
Severance Agreement
On April 25, 2008, we entered
into an amended severance agreement with Mr. Tauber, which amends and restates his severance agreement, dated March 3, 2003. The amended severance agreement is effective as of April 22, 2008, the date on which the Compensation
Committee approved the amendment.
If Mr. Taubers employment with us terminates due to his death or disability, the amended severance agreement
provides that we will pay Mr. Tauber (or his estate in the case of termination due to death) a
lump-sum
payment equal to his accrued and unpaid salary and other compensation and his accrued and unused
vacation and sick pay and, within 30 days of the date of termination, a
lump-sum
payment equal to the amount he would have earned as base salary during the two years following the termination date (reduced by
any amounts paid under any long-term disability insurance policy maintained by us for the benefit of Mr. Tauber in the case of termination due to disability), and we will continue to provide specified benefits and perquisites. We will also
accelerate the vesting of equity awards held by Mr. Tauber that would have vested during the two years following the date of termination solely as a result of his continued service to the Company and any option or stock appreciation right that
is accelerated on the date of termination will remain exercisable for the full term of the award. In addition, all equity-based performance awards granted to Mr. Tauber, to the extent they would have become vested after the date of his
termination upon the attainment of one or more specified performance goals, will vest as provided by such performance award but without regard to Mr. Taubers termination, conditioned on and to the extent that such performance goal or
goals are attained.
If Mr. Tauber terminates his employment for good reason, if we terminate his employment without cause or
in the event of a Change in Control, in which event the employment of Mr. Tauber terminates automatically, we will pay Mr. Tauber a
lump-sum
payment equal to his accrued and unpaid salary and other
compensation and his accrued and unused vacation and sick pay and, within 30 days of the date of termination, a
lump-sum
payment equal to the sum of the amount he would have earned as base salary during the
two years following the termination date and an amount equal to two times Mr. Taubers average annual bonus based on the annual bonuses paid or payable to Mr. Tauber for the last three fiscal years, and we will continue to provide
specified benefits and perquisites. We will also accelerate the vesting of equity awards held by Mr. Tauber that would have vested following the date of termination solely as a result of his continued service to the Company and any option or
stock appreciation right that is accelerated on the date of termination will remain exercisable for the full term of the award; provided, however, that if we terminate Mr. Taubers employment without cause, we will only accelerate the
vesting of his equity awards that would have vested during the two years following the date of termination. In addition, all equity-based performance awards granted to Mr. Tauber, to the extent they would have become vested after the date of
his termination upon the attainment of one or more specified performance goals, will vest as provided by such performance award but without regard to Mr. Taubers termination, conditioned on and to the extent that such performance goal or
goals are attained. For purposes of this paragraph, the termination by Mr. Tauber of his employment will be for good reason if the termination occurs within two years following the initial existence of one or more of the following
conditions without Mr. Taubers consent (i) a material diminution in Mr. Taubers authority, duties or responsibilities, (ii) a material diminution in Mr. Taubers annual base salary or (iii) the
relocation of the office where Mr. Tauber is required to perform his duties to the Company to a location outside of Los Angeles County, California; provided Mr. Tauber delivers written notice to the Company of the existence of such
condition within 90 days of the initial existence of the condition and the Company does not remedy such condition within 30 days of the receipt of such notice; and for cause means for a conviction (including any plea of guilty or no
contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise, or (y) any crime of moral turpitude.
If any of the payments due Mr. Tauber upon termination qualify as excess parachute payments under the Internal Revenue Code, Mr. Tauber
also is entitled to an additional payment to cover the tax consequences associated with excess parachute payments.
If Mr. Tauber terminates his
employment without good reason or we terminate his employment for cause, Mr. Tauber is entitled by law to receive all accrued, earned and unpaid salary and all accrued and unused vacation and sick pay.
42
Post-Retirement Medical Benefits Coverage Agreement
Mr. Taubers post-retirement medical benefits coverage agreement, effective as of December 27, 2007 and amended in January 2017, provides that
Mr. Tauber and his family will continue to receive medical benefits coverage commencing on or after the date that Mr. Tauber attains age 60 until the last to occur of Mr. Taubers death, the death of Mr. Taubers
spouse, or the end of the month in which each of Mr. Taubers children has a 30
th
birthday. The medical benefits coverage afforded to Mr. Tauber and his family after the termination
of his employment will be at least as favorable as the most favorable level, type and basis of medical coverage provided to Mr. Tauber and his family at any time during the five years prior to termination. Upon Mr. Taubers
eligibility for Medicare or a similar program, Mr. Tauber will have the option to enroll in Medicare or such similar program. If Mr. Tauber or any eligible family member elects to enroll in such program, the Companys obligation under
the post-retirement medical benefits coverage agreement will be limited to providing Medicare supplementary coverage and Executive Medical Excess Claims Insurance or a substantially similar policy. The coverage provided by the Company is secondary
to any employers group medical plan in which Mr. Tauber or an eligible family member participates as an active employee, any employers group medical plan in which Mr. Tauber is covered as the spouse or dependent or an active
employee, any individual medical benefits coverage under which Mr. Tauber or an eligible family member is covered, or Medicare coverage. If the continuation of medical benefits coverage is subject to taxation under Section 409A(a)(1) of
the Internal Revenue Code as a result of the failure of the post-retirement medical benefits coverage agreement to comply with Section 409A, the Company will make a payment to Mr. Tauber equal to all federal, state and local taxes incurred
by Mr. Tauber as a result thereof. In addition to the medical benefits coverage, Mr. Tauber will for a period of seven years from the date employment is terminated continue to be eligible for pet care benefits (currently, in the form of an
employee discount) on the same terms as provided from time to time by the Company to its executive officers.
Furthermore, the Companys obligation
to provide post-retirement medical benefits coverage to Mr. Tauber will cease if he causes any person or entity controlled by him to induce or attempt to induce (a) any employee of the Company or any of its affiliates to leave the Company
or any of its affiliates or (b) any customer, supplier, vendor, licensee, distributor, contractor or other business relation of the Company or any of its affiliates to cease doing business with, or knowingly adversely alter its business
relationship with, the Company or any of its affiliates.
SERP Agreement
Mr. Taubers SERP agreement, dated as of June 28, 2010, provides that Mr. Tauber became entitled to monthly benefit payments when he
reached the age of 66 (i.e., the Benefit Commencement Date). Commencing on the Benefit Commencement Date, Mr. Tauber is entitled to 144 monthly payments in an amount equal to 1/12
th
of the
applicable vested percentage of his Final Salary. However, if before or coincident with his separation from service (as defined Section
1.409A-1(h)(1)
of the Treasury Regulations) there occurs a
Change in Control, an involuntary termination by the Company without cause, a voluntary termination by Mr. Tauber for good reason, or Mr. Taubers death or disability, the applicable percentage will be fully vested at 50%. If before
the Benefit Commencement Date, there is a Change in Control that qualifies as a change in control event within the meaning of Treasury Regulation section
1.409A-3(i)(5)
or Mr. Tauber dies or
becomes disabled, then the actuarial equivalent of the monthly benefits owing to Mr. Tauber must be paid in a lump sum on the date of such event. In addition, if a Change in Control that is also a change in control event occurs
after the Benefit Commencement Date, then the SERP agreement terminates and the actuarial equivalent of any remaining monthly benefits owing to Mr. Tauber must be paid in a lump sum on the date of such change in control event. For further
discussion regarding Mr. Taubers SERP agreement, see Pension Benefits starting on page 31 of this Amendment
43
The following table describes the potential payments to Mr. Neil Tauber upon termination.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments & Benefits Upon
Termination (1)
|
|
Death
|
|
|
Disability
|
|
|
By Officer
for Good
Reason
|
|
|
By Officer
Without
Good
Reason
|
|
|
By
Company
Without
Cause
|
|
|
By
Company
for Cause
|
|
|
Change in
Control
|
|
Accrued & Unpaid Salary (2)
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
|
$
|
18,025
|
|
Cash Severance (3)
|
|
$
|
937,300
|
|
|
$
|
936,468
|
|
|
$
|
1,800,284
|
|
|
|
|
|
|
$
|
1,800,284
|
|
|
|
|
|
|
$
|
1,800,284
|
|
Acceleration of Equity Awards (4)
|
|
$
|
3,712,043
|
|
|
$
|
3,712,043
|
|
|
$
|
3,712,043
|
|
|
|
|
|
|
$
|
3,712,043
|
|
|
|
|
|
|
$
|
3,712,043
|
|
Automobile
|
|
|
|
|
|
$
|
105,739
|
|
|
$
|
105,739
|
|
|
|
|
|
|
$
|
105,739
|
|
|
|
|
|
|
$
|
105,739
|
|
Group Life and Other Company Insurance Plans (5)
|
|
$
|
992
|
|
|
$
|
1,874
|
|
|
$
|
1,874
|
|
|
|
|
|
|
$
|
1,874
|
|
|
|
|
|
|
$
|
1,874
|
|
Post-Retirement Medical Benefits (6)
|
|
$
|
1,789,151
|
|
|
$
|
2,295,327
|
|
|
$
|
2,295,327
|
|
|
$
|
2,295,327
|
|
|
$
|
2,295,327
|
|
|
$
|
2,295,327
|
|
|
$
|
2,295,327
|
|
SERP Agreement
|
|
$
|
2,811,900
|
|
|
$
|
2,811,900
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
$
|
2,811,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
9,269,411
|
|
|
$
|
9,881,376
|
|
|
$
|
10,745,192
|
|
|
$
|
2,313,352
|
|
|
$
|
10,745,192
|
|
|
$
|
2,313,352
|
|
|
$
|
10,745,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Upon the termination of Mr. Taubers employment, Mr. Tauber will receive a
lump-sum
payment consisting of accrued and unpaid salary and accrued and unpaid vacation,
and, within 30 days of the date of termination, a
lump-sum
payment consisting of cash severance and an additional amount to cover the tax consequences associated with excess parachute payments
under the Internal Revenue Code, if any. On the fifth day following the date on which a Change in Control occurs, Mr. Tauber will receive a
lump-sum
payment consisting of accrued and unpaid salary,
accrued and unpaid vacation paid, cash severance and an additional amount to cover the tax consequences associated with excess parachute payments under the Internal Revenue Code, if any. All other payments set forth above, other than
those set forth in the Acceleration of Equity Awards and Post-Retirement Medical Benefits rows, will be paid over a
two-year
period. For example, during such
two-year
period, Mr. Tauber will receive an average annual payment of $52,869 towards the cost of an automobile.
|
(2)
|
Reflects Mr. Taubers accrued and unpaid salary as of December 31, 2016.
|
(3)
|
For purposes of calculating the cash severance payable to Mr. Tauber, we used his annual base salary as of December 31, 2016 ($468,650) and the average annual bonus based on the average of the last three
annual cash bonuses paid to Mr. Tauber ($431,492).
|
(4)
|
As of December 31, 2016, 38,602 restricted stock units held by Mr. Tauber were earned but unvested, and 15,470 restricted stock units held by Mr. Tauber were unearned and unvested. Pursuant to the terms
of the applicable award agreements, upon the termination of Mr. Taubers employment due to death, disability, by the Company without cause, by Mr. Tauber for good reason, or upon a Change in Control, all of the
unvested equity awards held by Mr. Tauber will accelerate.
|
(5)
|
Consists of payment of vision, death, disability and long-term disability insurance premiums for Mr. Tauber.
|
(6)
|
Consists of projected future costs of medical and dental insurance premiums to be paid on behalf of Mr. Tauber or his spouse (assuming a life expectancy for his spouse of 29 years as of December 31, 2016),
including projected annual costs for (a) executive medical excess claims insurance coverage for the period commencing on January 1, 2017 and ending on December 31, 2026 and (b) Medicare and Medicare supplement premiums for the
period commencing on January 1, 2017 and ending on December 31, 2045.
|
Josh Drake
Severance Agreement
On August 18, 2011, we entered
into a severance agreement with Mr. Drake.
If we terminate Mr. Drakes employment without cause or Mr. Drakes
employment with us terminates due to his death or disability, the severance agreement provides that we will pay Mr. Drake (or his estate in the case of termination due to death) a
lump-sum
payment equal
to his accrued and unpaid salary and other compensation and his accrued and unused vacation and sick pay and the amount he would have earned as base salary during the one year period following the date of his termination (reduced by the fixed and
determinable amount of any payments to be made to him during that one year period under any long-term disability insurance policy maintained by us for the benefit of Mr. Drake), payable in equal monthly installments. We will also continue to
provide specified benefits and perquisites for the one year period following the date of his termination. All stock options and stock appreciation rights granted to Mr. Drake that would have vested during the one year following the date of
termination solely as a result of his continued service to the Company, will continue to vest during the course of the one year period immediately following the date of termination and become exercisable in accordance with the terms and conditions
applicable to such equity award. All restricted stock and restricted stock units held by Mr. Drake that would have vested during the one year period following the date of termination solely as a result of his continued service to the Company
will vest upon the date of termination and, in the case of restricted stock units, will become payable in accordance with the terms and conditions applicable to such equity award.
44
Upon the occurrence of a Change in Control, if Mr. Drakes employment is terminated (a) on or
before the one year anniversary of the date of occurrence of a Change in Control by us other than for cause or as a result of Mr. Drakes death or disability, or (b) on or after the one year anniversary of the date of
occurrence of a Change in Control by Mr. Drake, then all stock options and stock appreciation rights granted to Mr. Drake that would have vested at any time after the date of termination, will immediately vest and become exercisable on the
date of termination and remain exercisable for the full term of such award. All restricted stock and restricted stock units granted to Mr. Drake that would have vested at any time after the date of occurrence of a Change in Control solely as a
result of his continued service to the Company will vest on the earlier of (a) the date that is one year after the date of occurrence of the Change in Control, provided that Mr. Drake continues to provide services to us or our successor,
(b) the date of Mr. Drakes termination of employment by us or our successor other than for cause or as a result of Mr. Drakes death or disability and (c) the vesting date otherwise provided in the award
agreement.
Mr. Drakes severance agreement contains provisions that restrict him, for a period of one year after the termination of his
employment, from (a) soliciting from Antech Diagnostics or any of its subsidiaries or affiliates any employee, key consultant, customer or client, or any person who was an employee, key consultant, customer or client within the last twelve
months prior to Mr. Drakes termination, or (b) being affiliated in any way, directly or indirectly, with a competitor, or becoming a competitor, of Antech Diagnostics in any area in which it operates, including, but not limited to,
veterinary diagnostics testing, veterinary telemedicine, veterinary diagnostic and marketing communications for animal hospitals.
For purposes of this
section, the termination of Mr. Drakes employment for cause means for (i) a conviction (including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or
other property, of the Company or otherwise, or (y) any crime of moral turpitude; (ii) gross misconduct in the performance of his duties; (iii) failure of Mr. Drake to follow or comply with our policies and procedures or the
written directives of our Board of Directors; or (iv) the repeated failure of Mr. Drake to render full and proper services as required by the terms of his employment.
If we terminate Mr. Drakes employment for cause, Mr. Drake is entitled by law to receive all accrued, earned and unpaid salary and all accrued
and unused vacation and sick pay.
The following table describes the potential payments to Mr. Josh Drake upon termination.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments & Benefits Upon
Termination (1)
|
|
Death
|
|
|
Disability
|
|
|
By Company
Without Cause
|
|
|
By Company
for Cause
|
|
|
Change in
Control
|
|
Accrued & Unpaid Salary (2)
|
|
$
|
8,121
|
|
|
$
|
8,121
|
|
|
$
|
8,121
|
|
|
$
|
8,121
|
|
|
$
|
8,121
|
|
Cash Severance (3)
|
|
$
|
421,884
|
|
|
$
|
421,884
|
|
|
$
|
421,884
|
|
|
|
|
|
|
$
|
421,884
|
|
Acceleration of Equity Awards (4)
|
|
$
|
3,909,000
|
|
|
$
|
3,909,000
|
|
|
$
|
3,909,000
|
|
|
|
|
|
|
$
|
3,909,000
|
|
Group Life and Other Company Insurance Plans (5)
|
|
$
|
21,685
|
|
|
$
|
22,126
|
|
|
$
|
22,126
|
|
|
|
|
|
|
$
|
22,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,360,690
|
|
|
$
|
4,361,131
|
|
|
$
|
4,361,131
|
|
|
$
|
8,121
|
|
|
$
|
4,361,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Upon the termination of Mr. Drakes employment other than for cause or as a result of Mr. Drakes death or disability, Mr. Drake will receive a
lump-sum
payment consisting of accrued and unpaid salary and accrued and unpaid vacation, and monthly payments of cash severance over the one year period following such termination.
|
(2)
|
Reflects Mr. Drakes accrued and unpaid salary as of December 31, 2016.
|
(3)
|
For purposes of calculating the cash severance payable to Mr. Drake, we used his annual base salary as of December 31, 2016 ($422,300).
|
(4)
|
As of December 31, 2016, 41,471 restricted stock units held by Mr. Drake were earned but unvested, and 15,470 restricted stock units held by Mr. Drake were unearned and unvested. Pursuant to the terms of
the applicable award agreements, upon the termination of Mr. Drakes employment due to death, disability, by the Company without cause, by Mr. Drake for good reason, or upon a Change in Control, all of the
unvested equity awards held by Mr. Drake will accelerate.
|
(5)
|
Consists of payment of vision, death, disability and long-term disability insurance premiums for Mr. Drake.
|
45
DIRECTOR COMPENSATION
The Compensation Committee reviews director compensation on an annual basis. Our
non-employee
director compensation
program for 2016 was as follows:
Annual Retainer
We pay our
non-employee
directors $10,000 per year, paid quarterly in arrears, $2,000 for each Board of Directors meeting attended in person or committee meeting attended in person which is not held on the same day as a
Board of Directors meeting, including reimbursement for
out-of-pocket
expenses incurred in attending, and $1,000 for each Board of Directors meeting attended
telephonically or committee meeting attended telephonically which is not held on the same day as a Board of Directors meeting. We pay the Chairman of our Audit Committee an additional $10,000 per year, paid quarterly in arrears. No employee director
receives compensation for his or her service as a member of our Board of Directors.
Annual Grant of Restricted Shares
Upon appointment to the Board of Directors, each
non-employee
director receives an initial grant of a number of restricted shares of common stock equal to $75,000 divided by the closing price of VCAs common stock on the grant date. These restricted shares
vest in three equal annual installments, in each of the three
12-month
periods, each an annual period, following the date of grant on that day during such annual period which is the earlier to
occur of (a) the day immediately preceding the date of an annual meeting of the Companys stockholders occurring during such annual period or (b) on the anniversary of the date of grant.
If the date of grant is fewer than 12 months prior to the date of the next annual meeting of stockholders, the number of shares granted is reduced on a
pro-rata
basis, based upon the number of months until the next annual meeting of stockholders.
In addition, each
non-employee
director receives an annual automatic grant on the date of the annual meeting of a number of restricted shares equal to $75,000 divided by the closing price of the Companys common stock on the
grant date. These restricted shares vest in three equal annual installments, in each of the three annual periods following the date of grant on that day during such annual period which is the earlier to occur of (a) the day immediately
preceding the date of an annual meeting of the Companys stockholders occurring during such annual period or (b) on the anniversary of the date of grant.
Commencing in 2017, until such time as the Merger has either been consummated or terminated in accordance with its terms, in lieu of the equity grant
described above each
non-employee
director will receive an annual cash payment in the amount of $75,000.
Supplemental Retainer
For the period beginning in November 2016 and ending May 2017, each non-employee director received a monthly retainer of $10,000, as supplemental compensation
in connection with the Companys evaluation and negotiation of a strategic transaction involving a change of control of the Company.
Summary
of 2016 Director Compensation
The
following table and related footnotes summarize the compensation paid by the Company to each
non-employee
director for 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name (1)
|
|
Fees Earned
or
Paid in Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan
Compensation
|
|
|
Change in Pension Value
and Nonqualified Deferred
Compensation Earnings
|
|
|
All Other
Compensation
|
|
|
Total
|
|
|
|
($)
|
|
|
($) (2)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
John M. Baumer
|
|
$
|
45,000
|
|
|
$
|
75,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
120,055
|
|
John B. Chickering, Jr.
|
|
$
|
56,000
|
|
|
$
|
75,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
131,055
|
|
John A. Heil
|
|
$
|
45,000
|
|
|
$
|
75,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
120,055
|
|
Frank Reddick
|
|
$
|
43,000
|
|
|
$
|
75,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
118,055
|
|
(1)
|
Mr. Robert L. Antin, the Chairman of the Board, Chief Executive Officer and President of the Company, has been omitted from this table since he is an employee director and does not receive any compensation for
serving on the Board of Directors. Mr. Antins compensation is set forth on the Summary Compensation Table starting on page 26] of this Amendment.
|
46
(2)
|
In accordance with SEC requirements, these amounts reflect the grant date fair value of restricted stock grants in accordance with the provisions of FASB ASC 718.
|
C
OMPENSATION
C
OMMITTEE
I
NTERLOCKS
AND
I
NSIDER
P
ARTICIPATION
The Compensation
Committee of our Board of Directors consists of John B. Chickering, Jr. and John M. Baumer. None of the members of the Compensation Committee was an officer or employee of the Company at any time during 2016. None of our executive officers serves as
a member of the board of directors or compensation committee of any entity that has or has had one or more executive officers serving as a member of our Board of Directors or Compensation Committee.
C
OMPENSATION
C
OMMITTEE
R
EPORT
The Compensation Committee has reviewed and discussed
with management the Compensation Discussion and Analysis. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Amendment.
|
The Compensation Committee
|
|
John M. Baumer
|
John B. Chickering, Jr.
|