Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Retirement of Directors
Appointment of Chief Accounting Officer
Ms. Montemayor will receive an annual base salary of
In addition, Ms. Montemayor and the Company are parties to severance and change in control agreements substantially similar to agreements with the Company's other officers. In general, the severance agreement provides that if Ms. Montemayor terminates her employment for good reason or if her employment with the Company terminates other than for cause, death, disability or normal retirement, the Company must pay her a separation payment, in addition to earned salary and vested benefits, in an amount equal to the sum of (1) her base salary, (2) 18 times the cost of coverage for herself and her eligible dependents under the Company's group medical plans, and (3) one-twelfth of her base salary if the date of termination is less than 30 days following the notice of termination and her employment is terminated by the Company. In general, the change in control agreement provides that if, in connection with or after a change in control, Ms. Montemayor terminates her employment for good reason or if her employment with the Company terminates other than for cause, death, disability or normal retirement, the Company must pay her a separation payment and provide continued group medical coverage at a cost equivalent to a similarly situated active employee for two years, in addition to paying earned salary and vested benefits. The separation payment is an amount equal to the sum of (1) two times the sum of her base salary and a defined target bonus determined in accordance with the terms of the agreement, (2) a pro-rated portion of the defined target bonus based on the days elapsed in that calendar year, and (3) one-twelfth of her base salary if the date of termination is less than 30 days following the notice of termination and her employment is terminated by the Company. If the Company
terminates her employment without cause following a potential change in control and if a change in control occurs within 12 months, she will be entitled upon the change of control to the payments that would have been made if she had continued as an executive officer until the change in control, as well as to a payment equal to the value of her equity-based awards that did not vest when her employment was terminated. Both the severance agreement and the change in control agreement provide for a payment equal to Ms. Montemayor's base salary in the event of her death, disability or retirement.
Compensation and Management Development Committee Actions
1. The Committee approved the payout of cash bonus awards to the named executive officers under the Company's Annual Incentive Bonus Plan, based on the Committee's assessment of 2013 performance, as follows:
Named Executive Officer Amount of 2013 Cash Bonus Payout
Scott D. Sheffield $2,390,000 Timothy L. Dove $1,450,000 Richard P. Dealy $1,112,500 Mark S. Berg $790,000 Chris J. Cheatwood $790,000
2. The Committee established targets for the Company's named executive officers for 2014 bonuses payable in 2015 under the Company's Annual Incentive Bonus Plan. The 2014 bonus target is shown as a percentage of 2014 base salary, and the actual amount paid may be at, above (up to 250% of the target) or below the target level:
Named Executive Officer 2014 Bonus Target Scott D. Sheffield 130% Timothy L. Dove 100% Richard P. Dealy 100% Mark S. Berg 80% Chris J. Cheatwood 80% 3. The Committee made awards of restricted stock and performance units under the Company's 2006 Long-Term Incentive Plan to the named executive officers, as follows. Number of Target Number of Restricted Performance Units Named Executive Officer Shares/RSUs Awarded Awarded Scott D. Sheffield 23,273 23,273 Timothy L. Dove 9,577 9,577 Richard P. Dealy 6,517 6,517 Mark S. Berg 4,091 4,091 Chris J. Cheatwood 4,895 4,895
The restricted stock awards will vest on the third anniversary of the date of grant, provided the officer remains employed with the Company. Messrs. Sheffield's and Dove's awards were granted in the form of restricted stock units, which generally have the same terms as the restricted stock, including being settled in Common Stock of the Company after a three-year vesting period. The vesting of restricted stock and restricted stock units accelerates upon a change in control.
Performance units entitle the recipient to the payment of shares if, and only if, the performance of the Company's common stock relative to that of the Company's peers ranks the Company above a "threshold" level. Payouts can range from zero percent to 250 percent of the target number of performance units depending on the Company's relative ranking. Dividends declared during the performance period will be paid at the end of the three-year performance period only on shares delivered for earned units up to a maximum of target shares. Vesting of unearned performance units accelerates upon a change in control.
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Frank W. Hall Frank W. Hall, Vice President and Chief Accounting Officer