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Burlington Stores, Inc. 8-K Report, Executive Changes (May 22, 2017)

Filed May 22, 2017For Securities:BURL

Summary

Burlington Stores, Inc. filed an 8-K on May 22, 2017, primarily detailing the adoption of a new Executive Severance Plan and amendments related to its 2013 Omnibus Incentive Plan. The Severance Plan is designed for Senior Vice Presidents and Executive Vice Presidents, offering benefits such as one year of base salary continuation, pro-rata bonus payments, and continued welfare benefits in the event of an involuntary termination without cause or a voluntary termination for good reason within two years following a change in control. This plan replaces individual employment agreements for newly hired executives at these levels. The filing also announced the approval by stockholders of the amended and restated 2013 Omnibus Incentive Plan at the May 17, 2017, Annual Meeting. Revisions were made to grant agreements to align with the amended plan and accommodate those under the new Severance Plan. Additionally, an amendment to Jennifer Vecchio's (Chief Merchandising Officer/Principal) employment agreement was disclosed, modifying severance terms to exclude reductions from new employment compensation. These changes are important for understanding executive compensation and potential change-of-control scenarios.

Key Highlights

  • 1Burlington Stores, Inc. adopted a new Executive Severance Plan for Senior Vice Presidents and Executive Vice Presidents, effective May 16, 2017.
  • 2The Severance Plan provides for one year of base salary, pro-rata bonus, and continued welfare benefits upon qualifying termination (involuntary without cause or voluntary for good reason post-change in control).
  • 3New Senior Vice Presidents and Executive Vice Presidents will be subject to the Severance Plan, replacing individual employment agreements.
  • 4The Company's 2013 Omnibus Incentive Plan was amended and restated, and approved by stockholders at the May 17, 2017 Annual Meeting.
  • 5Grant agreements for stock options and restricted stock were revised to conform to the amended incentive plan and accommodate executives under the Severance Plan.
  • 6An amendment to Jennifer Vecchio's employment agreement alters severance terms, notably removing compensation offsets from subsequent employment.
  • 7Stockholders re-elected all three nominated directors, ratified the appointment of Deloitte & Touche LLP, approved executive compensation on an advisory basis, and approved the Amended Omnibus Incentive Plan.

Frequently Asked Questions

The Severance Plan is for employees at the Senior Vice President or Executive Vice President level. Current employees at these levels were offered the option to opt-in and terminate their existing employment agreements, while newly hired individuals at these levels will automatically be subject to the plan. Principals and the President and CEO are not eligible.

Severance benefits are triggered by an involuntary termination without cause, or a voluntary termination for good reason within two years following a change in control. Termination due to the divestiture, outsourcing, closure, or relocation of a business unit also makes a participant eligible, provided they do not voluntarily resign beforehand (unless it's for good reason post-change in control).

Qualifying participants will receive severance pay equal to their annual base salary for one year, a pro-rata portion of their potential bonus for the current fiscal year, the bonus they would have earned for the prior fiscal year (assuming continued employment), continuation of welfare benefits (medical, dental, vision) during the severance period, and six months of outplacement assistance.

Yes, an amendment to the employment agreement of Jennifer Vecchio, Chief Merchandising Officer/Principal, was filed. Notably, compensation received from a new employer or for substantially similar services during the year following termination will no longer reduce her severance pay.