SEC Filings

DEFR14A
MEDTRONIC PLC filed this Form DEFR14A on 10/11/2017
Entire Document
 

Potential Payments Upon Termination or Change of Control

 

Letter Agreements

 

Mr. Ishrak is party to a letter agreement with the Company that provides severance payments and benefits under certain termination events consistent with our change of control policy. In the event Mr. Ishrak’s employment is terminated by the Company without “cause” (as defined in the letter agreement) or by Mr. Ishrak for “good reason” (generally defined to include material reduction in salary or MIP target award, material adverse change in title, position and authority, required relocation in excess of 50 miles, or material breach by the Company of the letter agreement), Mr. Ishrak will be entitled to the following payments:

 

(i) a pro rata MIP bonus for the year of termination based on actual performance and paid when MIP bonuses are paid generally, (ii) a lump sum equal to two times the sum of Mr. Ishrak’s annual base salary and target annual cash opportunity under the MIP, and (iii) the value of 24 months of continued welfare benefits. These severance payments and benefits are subject to Mr. Ishrak’s execution of a general release and continued compliance with the Company’s standard confidentiality policies, a two-year non-competition and one-year non-solicitation agreement.

 

Mr. Ishrak’s letter agreement also provides that, upon a termination of employment due to death or “disability” (defined to include absence from material duties and responsibilities with the Company for 180 days in any consecutive 12-month period as a result of incapacity due to mental or physical illness or injury), Mr. Ishrak will be entitled to a pro rata MIP bonus for the year of termination based on actual performance and paid when MIP bonuses are paid generally.

 

Ms. Parkhill is party to an agreement with the Company that provides severance payments and benefits under certain termination events consistent with our change of control policy. In the event Ms. Parkhill’s employment is terminated by the Company without cause, Ms. Parkhill will be entitled to the following payments:

 

(i) two times the sum of Ms. Parkhill’s annual base salary and target annual cash opportunity under the MIP, (ii) the value of 24 months of continued welfare benefits, and (iii) continued vesting of the one-time, new hire restricted stock granted on June 20, 2016.

 

Mr. Coyle is party to an agreement with the Company that specifies cash severance payments under certain termination events. Mr. Coyle is entitled to receive an amount equal to his annual base salary plus his MIP bonus upon termination by the Company without cause.

 

Except for Mr. Ishrak, no NEO is party to an agreement that provides for severance benefits in excess of the broad-based plans. This includes the letter agreements for Ms. Parkhill and Mr. Coyle.

 

Company Severance Practices

 

Mr. Hanson and Mr. ten Hoedt are subject to Medtronic’s Section 16 Officer Severance Practices. These practices, which have received the approval of Medtronic’s Board of Directors, provide severance payments and benefits under certain termination events. In the event Mr. Hanson’s or Mr. ten Hoedt’s employment is terminated by the Company without cause, such executive will be entitled to the following payments:

 

(i) two times the sum of such executive’s annual base salary and the lesser of (a) the target annual cash opportunity under the MIP or (b) the actual payout of the MIP based on performance, (ii) the value of 24 months of continued health and dental insurance coverage, and (iii) outplacement services.

 

The table below illustrates the payments due upon involuntary termination as described in the section above, assuming a termination date of April 28, 2017.

 

Name  Severance
Amount
(1)   Welfare
Benefits
(2)   Equity
Acceleration
(3)   Total 
Omar Ishrak  $11,411,703   $21,567   $0   $11,433,270 
Karen L. Parkhill  $3,150,000   $29,527   $4,420,386   $7,599,913 
Michael J. Coyle  $1,760,000   $0   $0   $1,760,000 
Bryan C. Hanson  $3,266,088   $50,681   $0   $3,316,769 
Rob ten Hoedt  $2,964,630   $38,048   $0   $3,002,678 

 

(1) Mr. Ishrak’s amount includes the Fiscal Year 2017 earned MIP payment ($2,636,139), plus the sum of two times his base salary ($3,191,114) and the target MIP opportunity ($5,584,450) at the time of termination. Ms. Parkhill’s amount includes two times the base salary ($1,500,000) plus her target MIP opportunity ($1,650,000). Mr. Coyle’s amount represents his current base salary ($800,000) plus his target MIP opportunity ($880,000). Mr. Hanson’s amount includes two times the base salary ($1,680,000) and the MIP payout ($1,586,088). Mr. ten Hoedt’s amount includes two times his base salary ($1,524,937) and the MIP payout ($1,439,693).
(2) Amount represents payments for welfare benefits for Mr. Ishrak, Ms. Parkhill, Mr. Hanson and Mr. ten Hoedt.
(3) Amount represents acceleration of a restricted stock grant provided to offset the forfeited value of certain LTI plan components at Ms. Parkhill’s former employer, Comerica, Inc.

 

Gary Ellis Retirement

 

While Mr. Ellis was not entitled to any severance benefits in excess of the broad-based plans for benefits available to all employees at Medtronic upon his retirement December 31, 2016, Mr. Ellis entered into a consulting agreement with the Company (the “Consulting Agreement”) pursuant to which he agreed to serve as a consultant from January 1, 2017 until December 31, 2017 (the “Term”). Mr. Ellis agreed to provide advice as to Company matters of which he has special knowledge arising from his duties as former

 

MEDTRONIC PLC   2017 Proxy Statement    62

 
X