ICF INTERNATIONAL, INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
There are no arrangements or understanding between
In connection with her election as Chief Financial Officer,
For additional information, see the press release attached as Exhibit 99.1 to this Current Report on Form 8-K. The information in the press release attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Updated Severance Agreements
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Under the Agreements severance is available in the event (i) the executive's employment is involuntarily terminated without Cause (as defined in our most current Omnibus Incentive Plan (the "Plan")) before a Change of Control (as defined in the Plan by reference to Section 409A of the Internal Revenue Code (the "Code")), or (ii) in the event there is a Change of Control and within twelve months thereafter the executive's employment is involuntarily terminated without Cause or terminated by the executive for Good Reason (as defined in the Plan). The Agreements also provide us with certain "clawback" rights as described below.
Not for Cause Termination Other than Following a Change of Control
In the event we involuntarily terminate an executive's employment for a reason other than Cause, death, disability, or retirement, not within twelve months after a Change of Control, the executive is entitled to receive the following benefits:
? twelve months of severance pay calculated based on the executive's base salary
at the time of termination, payable commencing within 60 days after termination
in accordance with our normal payroll practices;
? the executive's target bonus for the year in which the executive's employment
was involuntarily terminated, payable in a lump sum within 90 days after
termination;
? the option to continue the executive's health insurance coverage in accordance
with the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"),with
the monthly COBRA premiums for the executive and dependents during the
severance payment period being equal to the amount the executive would have
paid each month for such group health plan coverage had the executive remained
actively employed, which premiums will be payable by the executive, such
benefit to cease if the executive becomes employed and is eligible to receive
group health plan coverage from a new employer; and
? the option to participate in a six-month executive career transition service.
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Termination without Cause or for Good Reason Following a Change of Control
In the event that, within twelve months after a Change of Control, the executive's employment is terminated without Cause by us or by the executive for Good Reason, the executive is entitled to receive the following:
? twenty-four months of severance pay calculated based on the executive's base
salary at the time of termination, payable in a lump sum within 60 days
following termination;
? the sum of (i) the executive's target bonus for the year in which the
executive's employment was involuntarily terminated, plus (ii) a prorated share
of the executive's target bonus for the year in which the executive's
employment was involuntarily terminated based on the number of full months in
the final calendar year in which the executive was employed, payable in a lump
sum within 90 days after termination;
? the option to continue the executive's health insurance coverage in accordance
with COBRA, with the monthly COBRA premiums for the executive and dependents
during the severance payment period being equal to the amount the executive
would have paid each month for such group health plan coverage had the
executive remained actively employed, which premiums will be payable by the
executive, such benefit to cease if the executive becomes employed and is
eligible to receive group health plan coverage from the new employer; and
? the option to participate in a six-month executive career transition service.
The vesting of any equity awards will be in accordance with the Plan and the applicable award agreement.
Under the Agreements, "Good Reason" means if, within the twelve months following a Change of Control, any of the following events occur to which the executive has not consented in writing: (i) a material reduction of the nature and scope of the authority, functions, or duties that were assigned to the executive immediately prior to the Change of Control; (ii) a material reduction in the compensation the executive was eligible to receive (including applicable bonus plans) immediately prior to the Change of Control; (iii) we relocate the executive's primary office and work location 50 miles or more away from the primary office and work location at which the executive was situated immediately prior to the Change of Control; or (iv) the entity effectuating the Change of Control fails to adopt the Agreement.
Excise Tax Mitigation
The Agreements provide that in the event we determine that any payment, distribution, or other action to or for the executive's benefit (whether paid, payable, accelerated, distributed, or distributable pursuant to the terms of the Plan or otherwise) could reasonably be expected to cause any loss of deductions under Code Section 280G, we have the authority to reduce any or all such payments, distributions, or other actions to the extent reasonably necessary to avoid the imposition of such excise tax. The order of any such reductions will begin with benefits that are exempt from Code Section 409A, and will only reduce other benefits to the extent necessary.
Clawback Events
The Agreements also provide that, except following a Change of Control, we have "clawback" rights with respect to "Excess Incentive Awards" arising from "Clawback Events" as defined in the Agreements. Except in situations involving fraud (as to which the statute of limitations will apply), the Compensation Committee of the Board of Directors, may, within three years after the latest to occur of a Clawback Event or harm to us, determine and recommend to the Board of Directors (acting in its sole discretion, but in good faith) that we recover (including, without limitation, through forfeiture) all or a portion of any incentive compensation (including short-term incentive awards or bonuses and long-term (equity) incentive awards) that was granted after the date of the Agreement based wholly or in part on a financial reporting, stock price or similar shareholder return measure under an incentive compensation plan or other incentive compensation arrangement with respect to any of our fiscal year(s) that were negatively affected by such events or matters. For the avoidance of doubt, base salary, severance payments and equity awards that were not granted after the date of the Agreement based wholly or in part on a financial reporting, stock price or similar shareholder return measure, such as equity awards that vest based on the passage of time, are excluded from the operation of the clawback provisions.
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Following and based upon the recommendation of the Compensation Committee, the independent members of the Board of Directors will review the recommendation and determine whether to direct us to assess a recovery from the executive and the amount of recovery to be assessed as an Excess Incentive Award (as defined below). In no event will the amount to be recovered from the executive by us in such situations be less than the amount required to be repaid or recovered as a matter of law.
The Board, acting through the independent directors, will determine whether we will recover from the executive such amounts by: (i) seeking repayment, (ii) forfeiting or reducing (subject to applicable law and the terms and conditions of the applicable plan, program or arrangement) the amount that would otherwise be payable to the executive under any compensatory plan, program, or arrangement maintained by us, (iii) withholding payment of future increases in the executive's compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with our otherwise applicable compensation practices, or (iv) any combination of the foregoing. If so determined by the Board, the executive is required to repay the Excess Incentive Award to us.
The Agreements define a "Clawback Event" to include:
? the executive's acts or omissions (whether or not constituting misconduct) that
are a significant contributing factor to us having to restate our financial
statements;
? the fact that our financial results, as used to determine the executive's
incentive compensation, are found to reflect a material error or otherwise be
materially inaccurate, whether or not the executive was responsible for, or the
executive's actions were a significant contributing factor with respect to, the
inaccuracy; and/or
? the executive engaged in conduct that is or could have been a basis for
termination for Cause, and which causes a material and adverse reputational or
other financial harm to us.
An "Excess Incentive Award" is the amount of the clawback determined by the Board of Directors in accordance with the Agreements. For illustrative purposes:
? in the case of a restatement, the Excess Incentive Award would generally be no
more than the positive difference, if any, between the short-term incentive
awards or bonuses paid to the executive and the amounts(s) of such payments
that would have been payable to the executive had the amount(s) of the award(s)
been calculated based on our financial statements, as restated, plus an amount
reflecting the effect of the restatement on long-term (equity) incentive awards
that were granted after the date of the Agreement based wholly or in part on a
financial reporting, stock price or similar shareholder return measure;
? in the case of a material error or inaccuracy in the financial statements, the
Excess Incentive Award would generally be no more than the positive difference,
if any, between the short-term incentive awards or bonuses paid to the
executive and the amount(s) of such payments that would have been payable to
the executive had the amount(s) of the award(s) been calculated based on our
financial statements, after correcting for such material error or inaccuracy,
plus an amount reflecting the effect of the material error or inaccuracy on the
value of long-term (equity) incentive awards that were granted after the date
of the Agreement based wholly or in part on a financial reporting, stock price
or similar shareholder return measure; and
? in the case of conduct by the executive that causes a material and adverse
reputational or other financial harm, the Excess Incentive Award will be
determined in good faith by the Board of Directors in accordance with the
clawback provisions in the Agreement and be reasonably proportional, taking
into account the egregiousness of the executive's conduct, as alleged, whether
the harm is directly connected to the executive's conduct, the degree of
financial harm to investors, and actual impact on our ability to earn new work
from its customers.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits 10.1 Form of Updated Severance Agreement 99.1 Press Release datedFebruary 27, 2020 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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