8-KLeadership ChangesExhibits & Filings

CASEYS GENERAL STORES INC 8-K Report, Executive Changes (Jun 2, 2010)

Filed June 2, 2010For Securities:CASY

Summary

Casey's General Stores, Inc. (CASY) filed an 8-K on June 2, 2010, to report on amended and restated employment agreements for its executive officers and six other key officers. These new agreements, effective May 27, 2010 (and June 1, 2010 for two additional officers), update the terms of employment protection following a Change of Control, a crucial event for investors to monitor. The primary changes focus on the definition of a "Change of Control" and the inclusion of provisions to comply with Section 409A of the Internal Revenue Code. Specifically, a Change of Control will now be triggered upon the consummation of a merger or certain other transactions, rather than solely upon shareholder approval. This modification could alter the timing and triggers for the benefits outlined in the employment agreements. Investors should note that these agreements provide significant severance packages and continued employment terms for officers upon a Change of Control, intended to align executive and shareholder interests during such transitions.

Key Highlights

  • 1Amended and Restated Employment Agreements executed for executive officers and six other officers, effective May 27, 2010, and June 1, 2010.
  • 2Definition of "Change of Control" modified to occur upon the consummation of a merger or other specified transactions, not just shareholder approval.
  • 3New provision added to allow deferral of termination payments for six months if determined to be deferred compensation subject to Section 409A of the Internal Revenue Code.
  • 4Agreements provide for continued employment for two years post-Change of Control, at the same position, duties, location, and at least the same compensation (base salary and average bonus).
  • 5Severance package for termination without Cause or resignation for Good Reason includes three times the officer's aggregate base salary and most recent bonus, plus continuation of health and life insurance for the two-year period.
  • 6Benefits cease upon death, total and permanent disability (after 26 weeks), or termination for "Cause" (defined narrowly).
  • 7Officers can terminate for "Good Reason" (defined broadly to include significant changes in duties, compensation breaches, or relocation) and receive severance.

Frequently Asked Questions

The primary purpose is to update the employment protection for key officers in the event of a "Change of Control" and to ensure compliance with Section 409A of the Internal Revenue Code, particularly regarding the timing of termination payments.

The definition has been modified so that a "Change of Control" is now triggered upon the consummation of a merger or certain other transactions, rather than solely upon shareholder approval of such events.

If terminated without "Cause" or if they resign for "Good Reason" following a Change of Control, officers are entitled to receive an amount equal to three times their aggregate base salary and most recent bonus, in addition to continued health and life insurance for the remaining two-year employment period.

The new agreements include a provision allowing Casey's General Stores to defer any termination payments for six months if the amount is determined to be deferred compensation subject to the Section 409A "six-month delay rule".