Liberty Global PLC (LBTYA) filed a Form 8K - Changes in Company
Executive Management - with the U.S Securities and Exchange
Commission on April 30, 2014.
On April 30, 2014, Liberty Global plc ("we", "us", "our" or the
"Company") entered into a multi-year employment agreement (the
"Agreement") with Michael T. Fries, our Chief Executive Officer and
President. The terms of the Agreement are described below.
Introduction; Effect of Changes in U.K. Law
Our board of directors and the Compensation Committee of our
board of directors (the "Compensation Committee") have determined
that it is in the Company's best interest to enter into an
employment agreement with Mr. Fries to serve as our CEO in order to
promote stability in management, secure his services for the long
term, implement appropriate restrictive covenants and recognize his
outstanding performance and the Company's success under his
leadership. Mr. Fries was not previously subject to an employment
agreement with us.
Although we are incorporated in the U.K., our ordinary shares
are listed and traded on the NASDAQ Global Select Market, and Mr.
Fries is based in Denver, Colorado. Consequently, the compensation
for Mr. Fries, and the terms of the Agreement, are based on U.S.
customs and standards as we are competing with U.S. companies for
senior management personnel based in the U.S. Recent changes in
U.K. law require that the compensation of our directors (including
that of Mr. Fries who is a member of our board of directors),
including historical compensation, whether awarded on terms subject
to U.S. law or not, be consistent with a compensation policy
approved by our shareholders. A compensation policy for our
directors will be submitted to our shareholders for approval at our
2014 annual general meeting to be held in June 2014.
Summary of Agreement
The Agreement is effective on April 30, 2014 and has an initial
five-year term ending on April 30, 2019. After the initial term,
the Agreement automatically renews for successive one-year terms
unless either party provides at least 180 days written notice to
the other party of its intention not to renew the term.
Notwithstanding the foregoing, the Agreement and Mr. Fries'
employment may be terminated at any time during the initial
five-year term or a renewal term.
Mr. Fries' base salary will be $2.0 million per year, subject to
annual increase at the discretion of the Compensation Committee.
Mr. Fries will receive a cash bonus of $5.0 million within ten days
of signing the Agreement.
The Agreement provides for the award of restricted share units
of one million Class A ordinary shares and one million Class B
ordinary shares (the "Performance Grant Award") upon signing of the
Agreement. The Performance Grant Award is subject to the
achievement of a performance condition measured in 2014 and a
three-year service-based vesting period. However, if the Company's
directors' compensation policy is not approved at the 2014 annual
general meeting, the Performance Grant Award will vest and be
settled no later than December 20, 2014, conditioned upon the
satisfaction of the performance condition; provided, that the
earned Performance Grant Award will be subject to a clawback (or
recoupment) provision for a three-year period as provided in the
Agreement. The Performance Grant Award is intended to qualify as
"performance-based compensation" under Section 162(m) of the
Internal Revenue Code.
Mr. Fries' maximum annual bonus opportunity for 2014 of $8.0
million will increase by $500,000 each year, provided that no
increase is required if the base performance objective applicable
to Mr. Fries' annual bonus was not achieved in the previous year.
There is no guaranteed bonus amount. The actual amount paid to Mr.
Fries will depend on the achievement of qualitative and
quantitative performance objectives, which will be determined each
year by the Compensation Committee.
During the term of the Agreement, Mr. Fries will participate in
the Company's equity compensation programs on the same basis as
other executives of the Company. Pursuant to these programs, Mr.
Fries will be entitled to receive grants of annual equity awards
(the "Annual Equity Awards"). The Annual Equity Awards granted to
Mr. Fries may be in the form of performance share units ("PSUs"),
share appreciation rights ("SARs") or other forms of equity as
determined by the Compensation Committee, with the terms and
conditions substantially the same as those for our other senior
executive officers. The target value of these Annual Equity Awards
is intended to be based on the target value for similar awards in
2014 as disclosed in the Company's proxy statement for its 2014
annual general meeting and increased each year (beginning in 2016)
by $2.5 million; however the Compensation Committee may determine
the actual target value of Annual Equity Awards each year in its
sole discretion and may reduce this amount subject to the terms of
the Agreement.
In addition to participating in U.S. employee benefit plans and
arrangements sponsored by the Company for the benefit of its senior
executive group, Mr. Fries is entitled to use the Company's
aircraft for up to 120 hours of personal use per year, in
accordance with the terms of aircraft time sharing agreements with
the Company. In addition, the Company agreed to pay all reasonable
legal fees and expenses incurred by Mr. Fries in connection with
the negotiation and execution of the Agreement.
If Mr. Fries' employment is terminated as a result of his death
or disability (as defined in the Agreement), Mr. Fries or his
heirs, as applicable, will be entitled to receive: (i) Mr. Fries'
accrued but unpaid base salary through the date of termination;
(ii) any annual bonus for a completed year that was earned but not
paid as of the date of termination; (iii) any accrued but unused
vacation leave pay as of the date of termination; (iv) any accrued
vested benefits under the Company's employee welfare and
tax-qualified retirement plans, in accordance with the terms of
those plans; and (v) reimbursement of any business expenses
("Accrued Benefits"). In addition, (A) the Company will pay Mr.
Fries or his heirs, as applicable, an amount equal to a pro rata
portion of the annual bonus Mr. Fries would have received for the
calendar year of his termination (the "Pro-Rata Bonus"); (B) any
options, SARs or other nonperformance based awards will fully vest,
with options and SARs remaining exercisable until the earlier of
three years from Mr. Fries' termination or the original expiration
of such award; (C) the Performance Grant Award will no longer be
subject to the clawback provisions; (D) if Mr. Fries' termination
is during a performance period with respect to any PSUs (or other
performance based award) that were granted as part of an Annual
Equity Award, Mr. Fries will be entitled to a pro-rata amount of
such awards based on performance through the end of the year of Mr.
Fries' termination and (E) Mr. Fries' family may elect to continue
to receive coverage under the Company's group health benefits plan
subject to the terms of such plan or receive COBRA continuation of
the group health benefits with premiums paid or reimbursed by the
Company.
If Mr. Fries is terminated for cause (as defined in the
Agreement) or resigns (other than for good reason (as defined in
the Agreement)), he will be entitled to receive the Accrued
Benefits and Mr. Fries will not be entitled to any other amounts
under the Agreement.
If Mr. Fries' employment is involuntarily terminated by the
Company without cause, or if Mr. Fries voluntarily terminates his
employment for good reason, Mr. Fries will be entitled to receive:
(i) the Accrued Benefits; (ii) an amount equal to the Pro-Rata
Bonus; (iii) an amount equal to one-twelfth (1/12) of the average
annual base salary Mr. Fries was earning in the calendar year of
the termination and the immediately preceding calendar year,
multiplied by the applicable number of months in the "Severance
Period" (as defined below), which amount shall be paid in
substantially equal payments over the course of the Severance
Period in accordance with the Company's normal payroll practices
during such period; and (iv) an amount equal to one-twelfth (1/12)
of the average annual bonus paid to Mr. Fries for the immediately
preceding two years (regardless when paid), multiplied by the
number of months in the Severance Period, which amount shall be
paid in substantially equal payments over the course of the
Severance Period in accordance with the Company's normal payroll
practices during such period. In addition, any options, SARs or
other nonperformance based awards will fully vest, with options and
SARs remaining exercisable until the earlier of three years from
Mr.
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The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000084/a4-30x148xk502employmentag.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/1570585/000157058514000084/0001570585-14-000084-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
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