Summary
This 8-K filing from Automatic Data Processing, Inc. (ADP) announces the departure of officer Regina R. Lee, effective December 31, 2014. The company has entered into a Separation Agreement and Release outlining the terms of her departure, which includes a comprehensive package of severance pay, bonus payouts, and continued benefits. Investors should note the financial implications of this separation, particularly the cash payments totaling $742,500 (split between severance and a mid-year bonus), alongside the accelerated or extended vesting and exercise periods for various equity awards and stock options. The agreement also includes standard restrictive covenants from Ms. Lee, such as non-competition and non-solicitation clauses, designed to protect ADP's interests post-employment. The company is also covering relocation expenses and medical plan access for Ms. Lee, further details of which are outlined in the filing.
Key Highlights
- 1Regina R. Lee, an officer of ADP, will depart the company effective December 31, 2014.
- 2The Separation Agreement includes a severance payment of $530,500, paid over 12 months.
- 3Ms. Lee will receive a pro-rated bonus for fiscal year 2014 based on performance objectives.
- 4An additional cash payment of $212,000 is provided as a bonus for the first six months of fiscal year 2015.
- 5Specific performance-based restricted stock and stock unit awards will vest or be partially paid out according to their original terms, with some potentially extended vesting periods.
- 6All unvested stock options will continue vesting through December 31, 2018, and vested options retain extended exercise periods.
- 7ADP will cover relocation costs up to $125,000 and provide continued medical plan eligibility for Ms. Lee and her dependents.
- 8Ms. Lee has agreed to a two-year post-separation period of non-competition, non-solicitation, and non-hire, in addition to confidentiality and non-disparagement covenants.