What are the key changes in compensation and benefits for Mark E. Jagiela upon his retirement?

Mr. Jagiela's unvested restricted stock units and stock options granted before his retirement date will continue to vest until February 1, 2026. Vested options and those vesting during this period remain exercisable for their full term. He has also agreed to non-competition and non-solicitation obligations until February 1, 2026.

Who is the new CEO and what is their background?

Gregory S. Smith is the new CEO, effective February 1, 2023. He joined Teradyne in 2006 and has held significant leadership roles, including President since July 2022, President of the Industrial Automation Group, and President of the Semiconductor Test Division.

What are the terms of the Severance Agreement for the new CEO, Gregory S. Smith?

The Severance Agreement provides that if Mr. Smith's employment is terminated by Teradyne for reasons other than death, disability, or cause, he is entitled to 24 months of monthly severance payments, continued health insurance, and continued vesting of unvested equity awards (both time-based and performance-based). In exchange, Mr. Smith has agreed to non-solicitation and non-competition clauses.

Are there any new restrictions placed on the departing or incoming CEOs?

Yes, both executives have agreed to restrictions. Mark E. Jagiela is bound by non-competition and non-solicitation restrictions through February 1, 2026. Gregory S. Smith has agreed to non-solicitation of employees and customers for three years post-termination and non-competition for one year post-termination.

TER 8-K: Leadership Changes

Summary

Teradyne, Inc. (TER) filed an 8-K on February 3, 2023, to announce the official retirement of Mark E. Jagiela as Chief Executive Officer and a member of the Board of Directors, effective February 1, 2023. In connection with his retirement, a Retirement Agreement was executed, superseding previous termination benefits. This new agreement ensures that Mr. Jagiela's unvested equity awards will continue to vest until February 1, 2026, and vested options remain exercisable for their full term. Importantly, Mr. Jagiela has agreed to non-competition and non-solicitation clauses through the same date, ensuring continued protection for the company. Concurrently, Teradyne appointed Gregory S. Smith as the new Chief Executive Officer, also effective February 1, 2023, succeeding Mr. Jagiela. Mr. Smith, a long-time Teradyne executive with extensive experience in key divisions, has also joined the Board of Directors. A Severance Agreement was put in place for Mr. Smith, outlining terms for termination by the company (other than for cause, death, or disability) over a three-year period. This agreement includes provisions for 24 months of severance payments, continued benefits, and accelerated vesting of equity awards, in exchange for non-solicitation and non-competition covenants for specified periods.

Key Highlights

1Mark E. Jagiela officially retired as CEO and Board member effective February 1, 2023.
2A new Retirement Agreement with Mark E. Jagiela extends equity vesting and option exercise periods to February 1, 2026.
3Mr. Jagiela has agreed to non-competition and non-solicitation restrictions through February 1, 2026.
4Gregory S. Smith has been appointed as the new CEO, effective February 1, 2023, succeeding Mr. Jagiela.
5Mr. Smith has also been appointed to Teradyne's Board of Directors.
6A Severance Agreement for Mr. Smith includes 24 months of severance, continued benefits, and equity vesting acceleration upon termination by the company (excluding cause, death, disability).
7Mr. Smith has agreed to non-solicitation (3 years) and non-competition (1 year) covenants under his Severance Agreement.

TERADYNE, INC 8-K Report, Executive Changes (Feb 3, 2023)

Summary

Key Highlights

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