Executive Compensation + Employment Agreements
and Termination Agreements
Mr. Turner was terminated without cause in conjunction with an organizational restructuring and our on-going succession management. Accordingly, the
company entered into a separation agreement with Mr. Turner effective April 3, 2020. Under the terms of the agreement, Mr. Turner will be eligible to receive severance payments totaling two times his annual base salary and target bonus, subject to
customary waivers, releases, non-solicitation and non-disparagement provisions and an agreement by Mr. Turner not to compete with the company for approximately two
years from the effective date of his departure. Under the terms of the companys AIP, Mr. Turner will be eligible to receive a prorated portion of his target 2020 bonus upon his departure. Mr. Turner will not receive an equity award
in 2020, but, in accordance with our plans, a prorated portion of his unvested PSUs previously granted pursuant to the companys 2017 Long-Term Incentive Plan, will vest upon his termination without cause and will be payable upon completion of
the applicable performance period for the PSUs. His other outstanding, but unvested equity awards will be forfeited. He will also be entitled to receive benefits and amounts accrued under the companys pension, pension restoration and retiree
medical plans, in accordance with the terms of those plans.
Potential Payments upon Termination or Change in
Control
Termination
In the event any of the NEOs employment terminated at the end of the last fiscal year, the officer would be entitled to the
officers accumulated retirement benefits in accordance with the provisions of our retirement plans as described under Pension Benefits on page 41. Retirement benefits under the employees pension plan are payable only in
the form of an annuity. Retirement benefits under the restoration plan are payable only in the form of a lump sum.
In addition, because each of our
NEOs were eligible for early retirement under the employees pension plan at December 31, 2019, a pro rata portion of their unvested equity awards would become vested at the discretion of the committee (or with respect to PSUs, with or
without the consent of the committee) based on the number of calendar days elapsed in the applicable vesting period and they would be entitled to exercise all vested stock options until the option expiration date shown in the Outstanding
Equity Awards at Fiscal Year End table on page 39.
If any of the NEOs employment terminated due to death or disability
(i) stock options in the Option AwardsUnexercisable column of the Outstanding Equity Awards at Fiscal Year End table would have become fully exercisable, (ii) all stock options in the Option Awards
columns of that table would remain exercisable until the option expiration date shown in the table, (iii) all restricted stock awards listed in that table would have become fully vested and (iv) PSUs would vest and be paid, to the extent
earned, at the end of the applicable performance period. See that table for the market value of the unvested shares of restricted stock at the end of the last fiscal year.
In the event the company had terminated the employment of Mr. Hill without cause at the end of the last fiscal year, Mr. Hill would have been
entitled to receive a cash severance payment of $5,060,000. In addition, a pro rata portion of PSUs would vest and be paid, to the extent earned, at the end of the performance period.
Change in Control
Equity Awards Under the 2008 LTIP. In the event of a change in control of the company, pursuant to the Amended and Restated 2008
Long-Term Incentive Plan, unexercisable stock options and unvested shares of restricted stock awarded to the NEOs will not vest solely by reason of the change in control. However, upon the occurrence of a change in control, the committee has
discretion to deem all applicable performance goals fully achieved and all awards fully vested, but the committee has no current intention to exercise such discretion. In addition, except as otherwise provided in any applicable award agreement, if
the surviving or successor corporation to the company, or any other corporate party to the change-in-control transaction, does not assume, or substitute equivalent
awards for, options or other awards outstanding under the plan, or in the event of a liquidation of the company, or if the employment of a holder of an outstanding option or award is terminated involuntarily without cause or by the
holder for good reason (as those terms are defined in the Amended and Restated 2008 Long-Term Incentive Plan) then, in general: (1) any applicable target performance goals will be deemed fully achieved and those awards and
restricted stock will be fully earned and vested; (2) affected options and other awards will become fully exercisable and vested; and (3) all restrictions, deferral limitations and forfeiture conditions applicable to affected awards will
lapse and those awards will be deemed fully vested. In the event of a change in control, PSUs will be paid out with respect to a pro-rated portion of PSUs awarded representing the number of days lapsed in the
performance cycle through the date immediately prior to the change in control based on the companys TSR and TSR ranking through such date and will
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2020 PROXY STATEMENT |
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