01—Abstract
Summary
Summary of the 8-K filed August 22, 2018. Cited figures are marked; the original filing is the authoritative source.
CBRE Group, Inc. (CBRE) filed an 8-K on August 21, 2018, detailing the departure and retirement agreement for Calvin W.
Frese, Jr., Global Group President. Mr. Frese stepped down from his executive role on August 17, 2018, and will retire on December 31, 2019. The agreement outlines a transition period where Mr. Frese will remain an employee in a non-executive capacity, providing advisory and transitional services.
This agreement involves significant financial considerations for Mr. Frese, including quarterly payments totaling $2 milliona in 2019 and $10 million in 2020, totaling $12 million over two years. Importantly, Mr. Frese is forfeiting substantial unvested equity awards, estimated at approximately $9.1 million.
The agreement also imposes extended non-competition and non-solicitation covenants through December 31, 2020, and amends existing restrictive covenants to provide broader protection for CBRE. Investors should note the terms are subject to Mr. Frese's continued employment and compliance with these covenants, with specific provisions for early termination.
02—Key points
Key Highlights
- Calvin W. Frese, Jr., Global Group President, is stepping down from his executive role and retiring effective December 31, 2019.
- Mr. Frese will remain with CBRE in a non-executive capacity through his retirement date to provide transitional and advisory services.
- CBRE will make payments to Mr. Frese totaling $2 million in 2019 and $10 million in 2020, totaling $12 million.
- Mr. Frese is forfeiting unvested equity awards with an estimated value of approximately $9.1 million.
- The agreement extends and strengthens non-competition and non-solicitation covenants for Mr. Frese until December 31, 2020.
- The financial considerations are contingent upon Mr. Frese's continued employment and adherence to restrictive covenants.
03—Questions
Frequently Asked Questions
What is the financial impact of Mr. Frese's departure agreement on CBRE?
CBRE will pay Mr. Frese $2 million in quarterly installments throughout 2019 and $10 million in quarterly installments throughout 2020, totaling $12 million. This payment is in exchange for his continued transitional and advisory services and the forfeiture of his unvested equity awards, which were valued at approximately $9.1 million.
Why is CBRE paying Mr. Frese such a large amount upon his retirement?
The payment is part of a negotiated agreement that includes Mr. Frese forfeiting significant unvested equity awards valued at approximately $9.1 million. Additionally, CBRE benefits from his continued employment through December 31, 2019, for transitional and advisory services and the extension and strengthening of non-competition and non-solicitation clauses designed to protect the company's interests.
What are the key restrictions placed on Mr. Frese post-employment?
Mr. Frese is subject to extended and broadened non-competition and non-solicitation covenants that will last until December 31, 2020. These covenants restrict him from competing with any line of business of CBRE or its affiliates and from soliciting employees or clients. Failure to comply can result in forfeiture of payments and repayment of amounts already received.
Under what conditions would CBRE's payment obligations under the agreement cease or be repaid?
CBRE's obligation to make payments ceases if Mr. Frese breaches the restrictive covenants, is terminated for 'Cause' (as defined), or resigns prior to his Retirement Date. In such cases, Mr. Frese would be required to repay all previously paid quarterly payments and any base salary paid after his termination, excluding accrued salary due at termination.
04—Continue