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Executive Compensation (Continued)
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
We have an employment agreement in place with Mr. Duffy. The contractual commitments under
this agreement are summarized below. For our named executive officers other than Mr. Duffy, their employment relationships are governed by our policies and practices that we have in place for other employees from time to time, including members
of senior management. Estimated termination payments to our named executive officers under any employment agreement and general policies are shown in the table beginning on page 67.
Employment Agreements and other Compensation Arrangements with Named Executive Officers
Duffy Employment Agreement
As discussed in the Compensation
Discussion and Analysis section, our philosophy is to enter into employment contracts or other agreements on a very selective basis in light of the particular facts and circumstances involved in the individual employment relationship. The
following is a summary of the key terms of our employment agreement with Mr. Duffy, which was most recently amended and restated on December 16, 2019. The summary is qualified in its entirety by the complete text of the employment
agreement, which was filed with the SEC on a Current Report on Form 8-K on December 17, 2019.
Agreement
Term: December 31, 2023.
Minimum Base Salary: $1,500,000 per year.
Annual Bonus and Equity Compensation: Effective January 1, 2020, the annual target opportunity under our annual incentive plan was increased from 175%
to 200% of base salary paid in the plan year. Effective January 1, 2020, for our equity incentive plan, the annual target grant date value opportunity was increased from 350% to 600% of base salary.
Termination Provisions: In the event of a termination of employment by the company without cause, as defined in the agreement, in addition to his
accrued benefits, the executive is entitled to a one-time lump sum severance payment equal to two times his then current base salary, subject to the executives timely execution and delivery of a general
release. Additionally, upon such a termination all outstanding unvested time-vesting equity awards that were granted after November 4, 2010 will automatically vest and, in the case of stock options and stock appreciation rights, will remain
exercisable for a period of four years from the date of termination (but not beyond the maximum term of the award). Also, upon such a termination, all outstanding performance-based equity awards shall become vested or be forfeited solely based on
actual performance measured over the full performance term.
In the event of executives death or disability, as defined in the agreement, all unvested
time-vesting equity awards granted after November 4, 2010 will vest and, in the case of stock options and stock appreciation rights, will remain exercisable for a period of four years from the date of the event (but not beyond the maximum term
of the award) and all performance-based equity awards shall become vested at the target level and become payable within 30 days following the date of death or termination for disability.
Change of Control: In the event of a change of control, as defined in the agreement, prior to termination of employment, all of the executives
unvested time-vesting equity awards shall become vested and all of the executives performance-based equity awards shall become vested or be forfeited solely based on actual performance measured over the full performance term (unless a more
favorable treatment is provided in the agreement evidencing the particular award or applies to the award pursuant to the operation of the applicable plan under which the award was granted, in which case such more favorable treatment will apply). If
executive is involuntarily terminated without cause within 60 days prior to a change of control, all of his unvested time-vesting equity awards that would have been outstanding had he been employed on the date of the change of control will become
vested and all performance-based equity awards shall become vested or be forfeited solely based on actual performance measured over the full performance term (unless a more favorable treatment is provided in the agreement evidencing the particular
award or applies to the award pursuant to the operation of the applicable plan under which the award was granted, in which case such more favorable treatment will apply).
Non-Compete Provision: The agreement also contains a provision prohibiting the executive during the term of
his employment, and for one year thereafter, from being employed in an executive or managerial capacity by, or providing, whether as an employee, partner, independent contractor, consultant or otherwise, any services of an executive or managerial
nature, or any services similar to those provided by him to the company, to a competing business.
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Notice of Annual Meeting of Shareholders and 2021 Proxy Statement
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65
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