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Potential Payments upon Termination or Change of Control
The Company entered into Severance Compensation Agreements with each of its executives, including
Messrs. Scott and Zink. Mr. Pickarts has an employment agreement as further discussed in the section above
entitled “Employment and Severance Compensation Agreements.”
Under the Severance Compensation Agreements with Messrs. Scott and Zink, an officer is entitled to
separation benefits in the event that the officer’s employment is terminated by the Company without cause or by the
NEO due to certain reasons, including a material change in title or duties, a material reduction in compensation or a
material geographic relocation, after the Company has had an opportunity to cure such reason for an officer’s
departure. The separation benefits to be received by an officer upon termination under the circumstances described
above, prior to a change in control of the Company, will be equal to the officer’s base salary plus the average of the
officer’s annual bonus amount for the past two fiscal years. If such a termination occurs within 12 months following
a change in control, the separation benefits to be received by an officer will be equal to two times (i) the officer’s
base salary plus (ii) the average of the officer’s annual bonus amount for the past two fiscal years. In either case, the
separation benefits will be paid to the officer in a lump sum 60 days after the date of such termination. In addition,
the officer’s equity incentive awards will vest automatically upon such termination, and the officer shall remain
entitled to the election of continuation of certain benefits under COBRA, if health insurance is offered by the
Company.
Under the Employment Agreement with Mr. Pickarts, he is entitled to lump-sum severance payments upon
termination without cause by the Company equal to twelve (12) months of salary. If a change of control occurs and
a subsequent qualifying termination takes place within one year thereafter, the executive is entitled to lump sum
severance payments equal to two (2) years of salary.
“Change in control” is defined under the Severance Compensation Agreements as, subject to certain
exceptions, the accumulation in any consecutive 12-month period, by any individual, entity or group of 50.1% or
more of the outstanding common shares of the Company; a sale of all or substantially all of the assets of the
Company; or the failure, during any period of 12 consecutive months, of the incumbent Board to maintain at least a
majority membership on the Board.
The table below sets out the estimated payments due to each of the NEOs employed by the Company as of
December 31, 2015 on a qualifying termination without cause, not associated with a change of control, assuming
termination on December 31, 2015 and pursuant to the Severance Compensation Agreement or the individual’s
Employment Agreement, as applicable.
All Other
Base Salary
Bonus
Compensation
(1)
Total
(2)
Name
($)
($)
($)
($)
Randall J. Scott
252,000
-
-
252,000
Jaye T. Pickarts
238,800
-
-
238,800
Paul H. Zink
230,000
-
-
230,000
(1)
Salary and bonus payments, if applicable, are made in lump sum for each NEO upon a qualifying
termination.
(2)
The January 11, 2016 Amendments to Severance Compensation Agreements with each of Messrs. Scott
and Zink and the January 18, 2016 Amendment to Employment Agreement with Mr. Pickarts reduces the
total compensation payable under a qualified termination paid to each of the executives in the first three
months of 2016, as further described in section above entitled “Employment and Severance Compensation
Agreements.”