|FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018|
period prior to termination of employment and (c) he is entitled to payment of a pro rata portion of his long-term incentive cash awards granted in 2016 and 2017 based on the actual level of performance prorated for the portion of the performance period prior to termination of employment. His performance shares granted in 2018 and long-term incentive cash award granted in 2018 were each forfeited without consideration.
For an estimate of the amounts that would be payable to each of the Companys named executive officers on settlement of their unvested Company equity awards and long-term incentive cash awards, see the section entitled Proposal 2Non-Binding, Advisory Vote on Merger-Related Compensation for the Companys Named Executive Officers beginning on page 23. The estimated aggregate amount that would be payable to the Companys four executive officers who are not named executive officers in settlement of their unvested Company equity awards and long-term incentive cash awards if the merger were to be completed and they were to experience a qualifying termination on December 10, 2018 is $3,508,44.55. The estimated aggregate amount that would be payable to the Companys 11 current non-employee directors in settlement of their unvested Company equity awards that were outstanding on July 31, 2018 if the effective time occurred on December 10, 2018 is $1,377,012.00. No former non-employee directors hold any unvested Company equity awards. The amounts in this paragraph were determined using the per share merger consideration (assuming no dividends or distributions).
Under the terms of their respective employment agreements with the Company, each of David LaRue and Robert OBrien is entitled to severance benefits if his employment is terminated without cause or for disability or resigns for good reason (as defined below), regardless of whether the termination is in connection with a change in control. All payments are contingent upon the execution of a release of claims against the Company and compliance with the non-competition, non-solicitation, non-disparagement and confidentiality covenants.
For purposes of the employment agreements, good reason means the occurrence of any of the following without the employees consent: (1) a material reduction of the employees duties or responsibilities, including any change in the employees officer status, (2) a material reduction of the employees annual base salary, short-term incentive plan target opportunity, long-term incentive plan target opportunity or total direct compensation opportunity (provided that for purposes of this clause, a material reduction is any reduction of greater than ten percent (10%)), (3) a material change in geographic location at which the employee must perform services from the Companys offices at which the employee was principally employed (with a relocation of more than 50 miles constituting such a material change) or (4) a material breach by the Company of the employment agreement.
Upon a qualifying termination (with or without a change in control), Messrs. LaRue and OBrien will be entitled to: