Other Compensation and Governance-Related Matters
CEO and CFO Succession and Other Management Transition
Mr. Slipsager’s Transition and Separation Arrangements
In connection with the announcement of his departure, the Company entered into a letter agreement with Mr. Slipsager on January 12, 2015. Pursuant to the terms of this agreement, following his departure, Mr. Slipsager agreed to provide senior advisory consulting services to the Company through September 30, 2015. He received a fee of $20,000 per month for these services. The letter agreement also provided that Mr. Slipsager’s separation payments and benefits from the Company in connection with his departure would be generally as set forth in his Amended and Restated Employment Agreement that was entered into on July 16, 2013, and as provided under the terms of previously made equity awards. Under these arrangements, Mr. Slipsager was entitled to:
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an amount equal to two times the sum of his then current base salary and then current target annual incentive opportunity under the Company’s annual incentive program, payable in substantially equal installments over 24 months commencing April 2015;
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a prorated annual cash incentive bonus for the fiscal year ended October 31, 2015, based on employment through March 31, 2015;
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post-termination benefits and payments vested under the Company’s benefit plans, including certain post-employment health insurance assistance payments;
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vesting of his 2012 performance share awards, subject to the achievement of the applicable performance conditions; and
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pro-rated vesting (through his last day of employment with the Company) of his 2014 performance share awards, subject to the achievement of the applicable performance conditions.
Mr. Salmirs’ Employment Agreement and Change-in-Control Agreement
In connection with his appointment as the Company’s President and Chief Executive Officer, on January 12, 2015, the Company and Mr. Salmirs entered into an executive employment agreement. The executive employment agreement, effective as of March 31, 2015, has a term ending October 31, 2017, unless sooner terminated under the terms of the executive employment agreement. Mr. Salmirs’ initial base salary under the executive employment agreement is $760,000. In addition, Mr. Salmirs is eligible for a target bonus equal to 100% of his base salary, with a maximum of up to 185% of his base salary, subject in all cases to achievement of the applicable performance conditions, and is eligible to participate in the Company’s long-term equity incentive plan. Mr. Salmirs will also be entitled to receive post-termination benefits and payments under the Company’s benefit plans, including specified post-employment health insurance assistance payments. The terms of his executive employment agreement provide that upon the termination of Mr. Salmirs’ employment for any reason, he will refrain from competing with, or soliciting the employees or customers of, the Company for one year following the termination of employment.
If Mr. Salmirs’ employment during the term is terminated by the Company without “Just Cause,” as defined in the executive employment agreement, Mr. Salmirs will be entitled to receive two times the sum of his base salary and target bonus, payable in equal installments during the 24-month period following the date of termination, a lump sum payment equal to a prorated portion of his annual bonus for the year of termination, based on the performance of the Company for that year, and specified post-employment health insurance assistance payments. If Mr. Salmirs’ employment terminates at the expiration of the term and the Company has not offered to renew upon materially similar terms and conditions, Mr. Salmirs will be entitled to receive one times the sum of his base salary and target bonus, subject to certain conditions, a lump sum payment equal to a prorated portion of his annual bonus for the year of termination, based on the performance of the Company for that year, and specified post-employment health insurance assistance payments.
On January 12, 2015, the Company also entered into an agreement providing “double-trigger” severance benefits in the event that Mr. Salmirs’ employment terminates under certain defined circumstances following a “Change-in-Control,” as defined in the severance agreement. These double-trigger severance arrangements are similar to those described for our NEOs under “Potential Payments upon Qualifying Terminations of Employment Following a Change-in-Control on October 31, 2015,” except that his severance multiple is 2.5 times salary and target bonus. There is no tax gross-up under this agreement.