8-K/ALeadership ChangesMaterial AgreementsExhibits & Filings

GLOBAL PAYMENTS INC 8-K/A Report, Material Agreement (Jun 5, 2006)

Filed June 5, 2006For Securities:GPN

Summary

This Form 8-K/A filing by Global Payments Inc. (GPN) serves as an amendment to a prior 8-K filed on October 10, 2005, to provide updated disclosures regarding employment agreements for key executive officers. Specifically, it confirms the execution of employment agreements on June 2, 2006, for Mr. James G. Kelly (Chief Operating Officer), Mr. Joseph C. Hyde (Chief Financial Officer), and Mr. Martin A. Picciano (Chief Accounting Officer). These agreements outline compensation structures, including base salary, annual bonus opportunities, and standard employee benefits, as well as restrictive covenants such as non-disclosure, non-competition, and non-solicitation clauses for a period of 24 months post-termination. The filing also details severance provisions for various termination scenarios, including termination by the company without cause, resignation for good reason, termination for poor performance, death, disability, retirement, or termination for cause. A significant focus is placed on severance benefits in the event of a change in control, which include accelerated vesting of stock awards and options, continued base salary payments, and health insurance reimbursements, with potential tax gross-up provisions. These amended disclosures provide clarity on the contractual terms governing these senior executives' roles and potential exit scenarios, which are crucial for understanding management incentives and potential liabilities for the company.

Key Highlights

  • 1Amendment to a prior 8-K filing to disclose executed employment agreements for key executives.
  • 2Employment agreements finalized on June 2, 2006, for COO James G. Kelly, CFO Joseph C. Hyde, and CAO Martin A. Picciano.
  • 3Agreements include base salary, annual bonus opportunities, and standard benefits.
  • 4Restrictive covenants include 24-month non-disclosure, non-competition, and non-solicitation periods post-termination.
  • 5Detailed severance packages are outlined for various termination events (e.g., without cause, poor performance, change in control).
  • 6Severance benefits for termination without cause or resignation for good reason include continued salary, health benefits, and accelerated vesting of equity awards.
  • 7Provisions for 'change in control' scenarios include enhanced severance and potential tax gross-ups for executives.

Frequently Asked Questions

This filing amends a previous 8-K to disclose the completion and material terms of employment agreements for key executives: James G. Kelly (COO), Joseph C. Hyde (CFO), and Martin A. Picciano (CAO). These agreements were originally discussed in October 2005 but were not finalized until June 2, 2006.

The compensation includes a minimum annual salary (subject to review), an annual at-risk incentive bonus based on financial and non-financial objectives, and participation in general employee benefit plans. The agreements also involve restrictive covenants for 24 months post-termination.

The agreements specify severance benefits depending on the reason for termination. For termination by the company without cause or resignation for good reason (prior to a change in control), executives receive accrued salary/benefits, a portion of their annual bonus, continued base salary, health insurance reimbursement for a specified period, and accelerated vesting of restricted stock awards and stock options.

Yes, if an executive's employment is terminated without cause or they resign for good reason within a specified period (36 months for Kelly/Hyde, 24 months for Picciano) following a change in control, they are entitled to increased severance, including 100% of their annual bonus, extended base salary continuation (24 months for Kelly/Hyde, 12 months for Picciano), continued health benefits, and full accelerated vesting of all equity awards. These provisions may also include a tax gross-up payment to cover excise taxes on change-in-control payments.