ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS;
ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY
ARRANGEMENTS OF CERTAIN OFFICERS.
Liz Claiborne, Inc. (the "Company"), is filing this Current Report on Form 8-K
(the "8-K") to report that the Compensation Committee (the "Committee") of the
Board of Directors has recently implemented a series of compensation actions
with respect to (i) severance agreements for its executive officers and other
key executives and (ii) an accelerated determination of the Company's annual
2009 equity grants.
SEVERANCE AGREEMENTS
In an effort to promote retention and to better assure a stable and dedicated
senior management base during the current difficult economic and industry
environments, the Compensation Committee has approved new severance agreements
for each of its current executive officers (other than the Company's Chief
Executive Officer), including it Chief Financial Officer. These agreements
replace previously executed agreements and have been entered into as of
December 1, 2008.
The severance agreements provide that in the event that any of such officer's
employment is terminated by the Company prior to December 31, 2010, other than
for cause, death or disability, or by such officer for certain specified reasons
(all as defined in the agreements), then such officer shall be entitled to
receive, in lieu of any other cash severance payment and in exchange for a
release of all claims against the Company, a lump sum payment equal to two times
the sum of (i) the officer's then current annual base salary and (ii) an amount
equal to the officer's then target annual bonus, as well as continued health and
welfare benefits for six months following such a termination. As part of the
agreements, each such executive is subject to non-competition, non-solicitation
and non-disparagement covenants during the officer's employment term and for 18
months thereafter. The Committee also approved substantially similar severance
agreements for a broader group of key Company management, including
non-executive officers, to aid in the retention of these key management
personnel in light of current market conditions.
A copy of the form of severance agreement is attached hereto as Exhibit 99.1.
ANNUAL 2009 EQUITY GRANTS
In an effort to promote retention, to ensure continuity at a critical time in
the Company's strategy implementation, and to better focus executives on long
term Company success, the Compensation Committee has accelerated its
determination of the annual equity grants, which would normally have been
granted in early March 2009, and modified the structure of those grants for the
executive officers and certain other members of senior management to provide for
quarterly granting of options, with vesting at December 2011. In recent years,
executive officers had received a mix of options and either performance or
restricted shares, with options all being granted as of one date and vesting 25%
on first anniversary of grant, 25% on second anniversary and 50% on third
anniversary.
As part of this revised program, the Compensation Committee has approved the
issuance of options to purchase shares of the Company's common stock (the "Stock
Options") to certain of its employees,
including each of the Company's executive officers, under its
stockholder-approved stock incentive plans. In an effort to promote longer term
recovery in the Company's stock price, promote employee retention, and to assure
that exercise prices were not focused on one particular date, option grants will
all vest and become exercisable on December 1, 2011 and will be granted in equal
installments on a quarterly basis on the following dates: December 1, 2008;
March 16, 2009; June 1, 2009; and September 1, 2009 (conditioned on the
employees' continued employment with the Company on such dates), with the
exercise price for each installment equal to the closing price of the Company's
common stock on the relevant grant date for that installment.
The following Executive Officers received the following Stock Option grants on
December 1, 2008:
NUMBER OF
NAME AND TITLE STOCK OPTIONS
William L. McComb - Chief Executive Officer 150,000
Andrew C. Warren - Executive Vice President, Chief Financial Officer 75,000
David McTague - Executive Vice President, Partnered Brands 75,000
Elizabeth Reeves - Senior Vice President, Chief Human Resources Officer 18,750
Nicholas Rubino - Senior Vice President, Chief Legal Officer 12,500
A copy of the form of option grant confirmation certificate is attached hereto
as Exhibit 99.2.
In addition, the Committee approved the grant of Restricted Stock Units under
the Company's stockholder-approved stock incentive plans to a broader group of
key Company management, not including any executive officers.
The Company's next regular annual equity grant cycle is anticipated to occur in
March 2010.
|
Add
LIZ to Portfolio
Set Alert
Email to a
Friend