Termination and Change in Control Benefits

 

The CEO and each other NEO have employment agreements which include provisions covering position, term, duties, employee obligations, compensation (including base salary, bonus, share units and stock options), pension, other benefits, vacation and car benefit, and provisions covering termination for cause, without cause and in the event of a change in control.  In addition, the incentive plans summarize the treatment of equity awards upon resignation, termination with cause and retirement.  The following table summarizes the material terms and conditions that apply in the event of the noted separation events.

 

Comp. Element

Separation Event

Resignation

Termination with Cause

Retirement

Termination without Cause

Change in Control and Termination without Cause(1)

Salary

Payments cease

Payments cease

Payments cease

Three times current salary for CEO (two times for other NEOs)

Three times current salary for CEO (two times for other NEOs)

Annual Incentive Bonus

None

None

Pro-rated for year of separation

Three times for CEO (two times for other  NEOs) the average bonus for three preceding years

Three times for CEO (two times for other NEOs) the average bonus for three preceding years

Stock Options

Unvested options are forfeited

Vested options have a 90-day exercise period

All options are forfeited

Unvested options are forfeited

Vested options have a maximum 3-year remaining term

Unvested options are forfeited

Vested options have a maximum 1-year remaining term

All options vest subject to Board discretion and have a maximum 1-year remaining term

Share Units

Unvested units are forfeited

Unvested units are forfeited

Unvested units continue to vest, but are pro-rated based on time worked during vesting period

Unvested units are forfeited

All units vest and are immediately payable

Pension, Benefits & Perquisites

Coverage ceases

Coverage ceases

Coverage ceases

Coverage Ceases(2)

Coverage Ceases(2)

 

Notes:

 

(1)

Includes treatment in the event of resignation for good reason.

 

 

(2)

The Senior Executive Retirement Benefit Plan for the CEO specifies that the projected pension is payable at the Normal Retirement Date if the CEO is at least age 55 at the date of termination of employment without cause.

 

 

 


 

Where the executive is terminated without cause, in order to receive these payments, the executive must:

 

 

1.

not use knowledge or experience gained as an employee of the Corporation in any manner which would be detrimental to the business interests of the Corporation or its affiliates;

 

 

2.

not directly or indirectly recruit or solicit any employee of the Corporation for a period of 12 months following termination;

 

 

3.

keep non-public information concerning the business of the Corporation and its affiliates, including information related to business opportunities, in strictest confidence;

 

 

4.

comply with the Corporation’s Employee Technology and Confidentiality Agreement and the Code of Ethics; and

 

 

5.

upon termination, return to the Corporation all assets of the Corporation including any documents, recordings or other format on which information of the Corporation is stored.

 

These obligations do not apply if the executive is terminated by the Corporation within 12 months of a change in control or where the executive resigns for good reason within 12 months of the change in control.  For this purpose, “good reason”  which would justify notice of resignation by the executive shall mean any significant change that is adverse to the executive’s position, status, job description, actual authority, work environment or compensation including any requirement that the executive works prior to the change in control, any change resulting from material reduction in the size or complexity of the business of the Corporation or any adverse change in the reporting relationship of the executive other than a change in the identity of the person or persons to whom the executive reports.