Summary
This 8-K filing from Emerson Electric Co. (EMR) details the transition of former CEO David N. Farr into a consulting role and his continued Board and employee status through early May and May 31, 2021, respectively. The company has entered into a Letter Agreement and a Consulting Agreement with Mr. Farr to formalize these arrangements following his retirement as CEO on February 5, 2021. These agreements outline his post-employment obligations, including non-compete and non-solicitation clauses, and the terms of his continued advisory services.
Key Highlights
- 1David N. Farr will retire as Director and non-executive Chairman of the Board on May 5, 2021.
- 2Mr. Farr will remain an employee of the Company through May 31, 2021.
- 3A Letter Agreement includes a five-year non-compete and non-solicitation commitment from Mr. Farr.
- 4Mr. Farr is eligible to receive his base salary and certain benefits through May 31, 2021.
- 5He remains eligible for a pro rata bonus for fiscal 2021 and full payouts of certain earned performance share awards, subject to company performance.
- 6All vested options held by Mr. Farr will remain exercisable until their original expiration date of October 1, 2023.
- 7A Consulting Agreement provides for Mr. Farr to offer advisory services on an as-needed basis from June 1, 2021, through December 31, 2021 (extendable), with a monthly fee of $117,000.
Frequently Asked Questions
Following his retirement as CEO, Mr. Farr will continue as an employee through May 31, 2021, and as Director and non-executive Chairman until May 5, 2021. He will also provide consulting services from June 1, 2021, through December 31, 2021, under a consulting agreement.
Mr. Farr has agreed to a five-year non-compete and non-solicitation period from his retirement date. He also agreed not to disclose confidential information, to reaffirm existing obligations, and to comply with non-disparagement clauses. He has also released the Company from any claims.
Yes, Mr. Farr will continue to receive his base salary and certain benefits through May 31, 2021. He is also eligible for a pro rata bonus for fiscal 2021 and full payouts of certain performance share awards, contingent on company performance. His vested options remain exercisable until October 1, 2023. He will receive a monthly fee of $117,000 for his consulting services.
If Mr. Farr breaches his obligations under the Letter Agreement, he will forfeit all payments and benefits under that agreement and must repay half of the economic value of benefits received prior to the breach as liquidated damages.