Nice deal - here is another example of a corporate CEO taking care of himself real well. It looks like with bonus he gets over a $1 million per year + he gets all of this restricted stock. If I read it right, the stock is worth $4 million...and get this - half of it vests IMMEDIATELY. This means Packard just got a $2 million gift. That is equal to the annual salary of about 40 school teachers. That can't be good for shareholders.
********** The Employment Agreement provides for an increase in Mr. Packard's annual base salary to $575,000 subject to annual revaluation by the Board of Directors ("Board") of the Company, including at the beginning of fiscal year 2013, based on a market compensation study. Mr. Packard's annual bonus target as a percentage of his base salary remains at 100%; however, the Board retained the discretion to award Mr. Packard an annual bonus ranging from 0% to 200% of his base salary. Mr. Packard's performance goals related to any fiscal year of the Company will be based on financial, operational, human capital or other defined metrics approved by the Board.
In recognition of the four-year extension of the Employment Agreement, Mr. Packard received a grant of 145,530 shares of restricted stock ("RSAs"), 50% of such shares vest upon signing and the remaining 50% of these shares vest over three years in quarterly installments starting on the first anniversary of the grant. Mr. Packard is also eligible to receive annual RSA grants ranging from $0 to $1.25M in value in the final three years of the term of the Employment Agreement based on attainment of predetermined annual objective performance goals set by the Board, and any RSAs granted will vest over three years in quarterly installments. Pursuant to the Employment Agreement, all RSA grants will vest to the extent that the applicable performance goals are achieved. These annual RSA grants are subject to stockholder approval of an amendment to the 2007 Equity Incentive Plan to provide for performance-based equity grants.
If Mr. Packard's employment is terminated at the Company's election at any time, for reasons other than death, disability, cause (as defined in the Employment Agreement) or a voluntary resignation, or due to constructive termination (as defined in the Employment Agreement), Mr. Packard will be entitled to receive severance payments equal to three times Mr. Packard's base salary. In such event, 50% of the severance amount will be paid within 60 days of Mr. Packard's separation date and the remaining portion of the severance amount will be payable in equal installments over the 18-month period following Mr. Packard's separation date. If severance payments are being made, Mr. Packard has agreed not to compete with the Company until 18 months after his separation date. In the event of Mr. Packard's termination upon death or disability, the Company will pay a lump sum cash payment equal to a pro-rated portion of the target annual bonus for the period that Mr. Packard was employed. In the event of a termination without cause, the period of time within which Mr. Packard is permitted to exercise any stock options that have vested as of his separation date was extended to 180 days. Finally, relocation of Mr. Packard's principal place of employment more than 30 miles from its original location was added as grounds for constructive termination