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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On November 2, 2017, the Company announced that Luke A. Pomilio, the Company’s Executive Vice President – Finance and Chief
Financial Officer, plans to retire. Pursuant to a letter agreement (the “Letter Agreement”) between the Company and Mr. Pomilio, dated November 2, 2017, Mr. Pomilio will continue to serve as the Company’s Executive Vice
President – Finance and Chief Financial Officer until a successor is named and commences service, will serve as Special Advisor to the next Chief Financial Officer until March 15, 2019, and after his employment ends on March 15, 2019 will
remain available for consultation through June 15, 2019.
In exchange for his agreement to continue in place as Chief Financial Officer
until a successor commences employment, and to provide advisory services to the successor Chief Financial Officer, Mr. Pomilio will receive the following compensation.
For the period from November 2, 2017 through March 15, 2018:
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Mr. Pomilio will continue to be paid his current salary.
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Mr. Pomilio’s 2017 bonus will be paid based on actual performance in accordance with the existing terms of the bonus plan.
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Mr. Pomilio will participate in the 2018 bonus plan with a target payout of 65% of salary, with any earned bonus to be prorated based on service through March 15, 2018, with the bonus payout based on the
transition support provided to the new Chief Financial Officer, as determined in the discretion of the Compensation Committee based on the recommendation of the Chief Executive Officer.
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Mr. Pomilio will be eligible for all other benefits for which Mr. Pomilio has been eligible as Chief Financial Officer, including, without limitation, participation in the Benefits Restoration Plan, the 401(k)
Plan, and health and welfare benefits.
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For his service from March 16, 2018 through March 15, 2019,
Mr. Pomilio will be paid an annualized salary estimated to be $858,000, which represents 1.5 times his current annual salary, plus 1.5 times the average of his 2016 and 2017 bonus payments. During this period, Mr. Pomilio will be eligible
to participate in the Company’s health, vision and dental benefit plans, and will be eligible to make contributions to the Company’s Benefits Restoration Plan and the Company Retirement Savings Plan, but will waive participation in other
health and welfare plans and other benefit plans, including, without limitation, Company contributions in the Benefits Restoration Plan and the Company Retirement Savings Plan. Mr. Pomilio’s receipt of these payments and benefits, as well
as the equity award treatment described in the following paragraph, are subject to his release of any claims under the Company’s Executive Management Severance Plan and Severance Plan and any other potential claims in favor of the Company.
For his service as a consultant from March 16, 2019 through June 15, 2019, Mr. Pomilio will not be paid a salary or other wages or
compensation, nor will he be eligible to participate in the Company’s health, welfare or retirement plans.
Mr. Pomilio will
remain subject to a
non-competition
restriction and
non-solicitation
obligations for one year following the termination of his service, as well as customary indefinite
confidentiality and
non-disparagement
obligations. In addition, subject to Mr. Pomilio’s continued service and execution of a release as described above, equity awards previously granted to
Mr. Pomilio will vest in accordance with the vesting schedules established in the original equity awards during 2018 and through June 15, 2019. Any equity awards with vesting dates scheduled to occur after June 15, 2019 will be
cancelled and forfeited. In the event of Mr. Pomilio’s death, disability, or termination of employment by the Company, any payments for his service as an advisor to the Chief Financial Officer which would otherwise have been payable from
March 16, 2018 through March 15, 2019 (and were not paid) shall become immediately due and payable, subject to Mr. Pomilio’s execution of a supplemental release. The Letter Agreement with Mr. Pomilio is attached as Exhibit
10.1 and is incorporated herein by reference.
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The above descriptions are qualified in their entirety by reference to the terms of the Letter
Agreement, attached hereto as Exhibit 10.1.
A copy of the Company’s press release relating to the matters described in this Item
5.02 is attached hereto as Exhibit 99.2.