EXECUTIVE COMPENSATION
The TVRS Award was granted on June 28, 2019. The employment agreement and the award agreement governing the TVRS Award provided that the TVRS Award
would vest in full in the event that Ms. Winstons employment was terminated without Cause, including a termination because the Company hires a replacement chief executive officer, subject to Ms. Winstons execution
and non-revocation of a release of claims. Ms. Winston stepped down as the Companys Interim Chief Executive Officer on November 4, 2019, in connection with Mr. Tritton commencing
employment as the Companys Chief Executive Officer, and Ms. Winstons TVRS Award vested on such date.
Employment Agreement and Other Compensatory
Arrangements with Mr. Temares
Mr. Temares departed the Company effective as of May 12, 2019. In accordance with the terms of his
employment and equity award agreements, he was entitled to three times his then-current salary, totaling in the amount of $11,902,500 (calculated without regard to any past voluntary waiver of base salary), payable over three years in normal payroll
installments, except that the amount due prior to the six months after his departure, $1,983,750, was paid in a lump sum on November 13, 2019, after the end of such six-month period. Such amounts will be
reduced by any compensation earned by Mr. Temares with any subsequent employer or otherwise and will be subject to his compliance with a one-year non-competition
and non-solicitation covenant.
The one-year performance goal
applicable to Mr. Temares PSUs granted in the Companys 2018 fiscal year was determined to have been attained, and the PSUs became fully vested. However, in connection with its review of the 2018 Performance Peer Group used for
purposes of the PSUs granted to Mr. Temares in the Companys 2018 fiscal year, the Compensation Committee found that the Companys 2017 fiscal year performance peer group was used in determining the achievement of performance goals
instead of the 2018 Performance Peer Group, which resulted in Mr. Temares receiving 94,500 additional shares in respect of his PSUs (the Temares additional shares). On October 21, 2019, Mr. Temares entered into an
agreement (the Temares PSU settlement agreement) with the Company to reduce by a number of shares equal to the number of Temares additional shares those PSUs that remained outstanding under the award granted to Mr. Temares in the
Companys 2018 fiscal year. Pursuant to the Temares PSU settlement agreement, the Company reduced the number of outstanding PSUs granted to Mr. Temares in the Companys 2018 fiscal year by 94,500 PSUs, such that, following the
reduction, Mr. Temares held 227,772 PSUs subject to a three-year ROIC goal and 113,886 PSUs subject to a three-year EBIT margin goal (in each case, assuming 100% of the target level of performance). Further, as a result of his departure in the
Companys 2019 fiscal year, the time-vesting component of Mr. Temares equity-based awards accelerated, including (i) his stock options (which were underwater and expired without having been exercised by
Mr. Temares), and (ii) $5,919,642 of PSU awards (assuming target level of performance) which remain subject to attainment of any applicable performance goals and the certification of the applicable performance-based tests by the Compensation
Committee, as provided under his award agreements and subject to the terms of the Temares PSU settlement agreement. For this purpose, the value of the PSU awards is based on the Per Share Closing Price. The actual value of Mr. Temares PSU
awards upon vesting will depend on the actual performance as certified by the Compensation Committee. Following the end of the 2019 fiscal year, the Compensation Committee certified that (i) the three-year EBIT margin performance-based test for
fiscal 2017 was met at 69.07% target (resulting in a payout of 75% of target, resulting in Mr. Temares receiving 51,488 shares of common stock with respect to such PSU award), and (ii) the three-year ROIC performance-based test for fiscal
2017 was met at 76.93% target (resulting in a payout of 90% of target, resulting in Mr. Temares receiving 123,570 shares of common stock with respect to such PSU award).
Mr. Temares is a party to the SERP and a related escrow agreement, pursuant to which he was entitled to receive a supplemental retirement benefit as
a result of his separation from service from the Company. Pursuant to the SERP, as a result of his separation from service with the Company as of May 12, 2019 being treated as a termination without cause, Mr. Temares became entitled to a
lump sum payment equal to the present value of an annual amount equal to 50% of Mr. Temares annual base salary on the date of termination of employment if such annual amount were paid for a period of 10 years in accordance with the
Companys normal payroll practices (which amount equals $17,654,834), subject to Mr. Temares timely execution and non-revocation of a release of claims in favor of the Company (which occurred).
This amount was paid on November 13, 2019, the first business day following the six-month anniversary of Mr. Temares termination of service. The Company has no further obligation to
Mr. Temares under the SERP.
Employment Agreements and Other Compensatory Arrangements with Messrs. Eisenberg and Feinstein
The Company is party to employment agreements with each of Messrs. Eisenberg and Feinstein. Under these agreements, each of Messrs. Eisenberg and
Feinstein had the option to elect senior status at any time (i.e., to be continued to be employed to provide non-line executive consultative services). On May 11, 2017, Messrs. Eisenberg and Feinstein
notified the Company that they elected to commence their Senior Status Period (as defined in their respective employment agreements), effective May 21, 2017. Pursuant to the senior status provisions of their employment agreements,
each of Messrs. Eisenberg and Feinstein was entitled to base salary, termination payments, postretirement benefits and other terms and conditions of employment, during the Senior Status Period.
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