FAIRLAWN, Ohio—A. Schulman Inc. ousted CEO Bernard Rzepka in mid-August. Now it's time to pay up.
The Fairlawn-based supplier of plastic compounds and resins on Oct. 17, filed with the Securities and Exchange Commission a document outlining financial terms of Rzepka's departure. The filing noted that the termination of his employment agreement was effective Sept. 24.
Under a separation agreement reached last Friday, Oct. 14, Rzepka will receive the following payments and benefits:
- $1,706,000 in cash severance payments, "with a lump sum payment on the first regular payday following March 25, 2017, in an amount equal to $426,500, and 36 equal semi-monthly installments of $35,541.67 commencing on the first regular payday following March 25, 2017."
- "Two lump sum payments of $853,000 in lieu of cash bonuses, with the payment on the first regular payday following March 25, 2017 and the second payment on the first regular payday following Oct. 31, 2017."
- "Pro-rata vesting of outstanding equity awards granted Jan. 13, 2014, Jan. 9, 2015, and Jan. 13, 2016 which had time-based vesting"
- "Pro rata vesting of outstanding equity awards granted Jan. 13, 2014, Jan. 9, 2015, and Jan. 13, 2016 which had performance-based vesting."
- "Reimbursement for loss incurred in connection with the sale of employee's primary residence in the United States in the amount, if any, that the proceeds from such sale (less reasonable selling expenses and commissions not to exceed $38,000), are less than $680,000, so long as such sale occurs within 18 months."
- "Reimbursement in an aggregate amount not to exceed $75,000 for reasonable transition-related expenses incurred by Mr. Rzepka, including but not limited to school tuition transition costs, attorney fees, and tax related professional fees and expenses."
- "Outplacement services as determined by mutual agreement."
- "Engagement by the company of Deloitte & Touche LLP for tax advisory and tax return preparation services related directly to Mr. Rzepka's employment and separation."
In exchange for the payments and benefits, Schulman said in the filing, Rzepka "provided the company with a fully effective release of all claims and agreed to continue to comply with, among other things, certain restrictive covenants related to non-solicitation and non-competition contained in his employment agreement."
Schulman is in a period of significant transition.
The company removed Rzepka on Aug. 18 and replaced him with Joseph Gingo, the company's former CEO who was credited with rebuilding Schulman before relinquishing the top job to Rzepka in 2014.
That change followed Schulman's Aug. 11 announcement that it had lowered its earnings guidance for the year—an announcement that led to a stock price plunge of more than 25 percent that day.
Last month, Schulman announced it has retained global finance giant Citi to assist the company with a "comprehensive review of its business plan, as well as near- and longer-term global end market trends."