| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
2021 Long Term Incentive Plan
On February 10, 2021, the Equity Award Subcommittee (the “Subcommittee”) of the Organizational Development & Compensation Committee (together with the Subcommittee, individually or collectively referred to herein as “the Committee”) of the Board of Directors (the “Board”) of Newell Brands Inc. (the “Company”) approved the 2021 Long Term Incentive Plan Terms and Conditions under the Company’s shareholder approved 2013 Incentive Plan (as amended, the “LTIP”), pursuant to which the Company makes annual long term incentive awards based on shares of the Company’s common stock, including performance based and time based restricted stock units (“RSUs”) and stock options (“Options”). Under the LTIP, the Committee (or in the case of the Chief Executive Officer, the independent members of the Board) makes RSU and Option awards to key employees, including the named executive officers. The value of the LTIP award is based upon a percentage of the named executive officer’s salary or other such dollar value as is determined by the Committee. Under the LTIP, a named executive officer’s LTIP award in 2021 will be comprised of 50% performance based RSUs, 20% time based RSUs and 30% Options. RSU awards under the LTIP vest three years from the date of grant. Option awards vest ratably in one-third increments on each of the first, second and third anniversaries of the date of the grant.
The performance-based RSUs awarded may vest at 0% to 200% depending upon achievement of equally-weighted performance goals for Annual Core Sales Growth and Free Cash Flow (as defined in the LTIP) set by the Committee. Additionally, following the determination of the extent to which the Company has achieved its performance goals a positive or negative adjustment to the payout will be made based upon a comparison of the Company’s total shareholder return (“TSR”) relative to a pre-determined set of comparator group companies (the “Comparator Group”) for the three-year performance period. If the Company’s ranking is in the bottom quartile of the Comparator Group at the end of the performance period, the payout percentage will be multiplied by 90% to determine the total payout percentage of the award (and the total payout percentage for the ward will be no higher than target (100%), even if the calculation results in a higher payout). If the Company’s ranking is in the top quartile of the Comparator Group at the end of the performance period, the payout percentage will be multiplied by 110%. For a ranking in the second or third quartile, no adjustment will be made. The total payout percentage for the award will not exceed 200 percent of the target.
The summary above is qualified in its entirety by reference to the LTIP, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
In connection with the 2021 LTIP Awards, the Company and named executive officers above will enter into updated Restricted Stock Unit Award Agreements (the “RSU Agreements”). Under the RSU Agreements, performance based RSUs will vest on the third anniversary of the grant date, subject to continuous employment and the level of attainment of applicable performance metrics based on performance goals for Annual Core Sales Growth and Free Cash Flow over the three-year performance period, subject to the relative TSR modifier described above. Time based RSUs will vest on the third anniversary of the grant date, subject to continuous employment with the Company.
The Company and named executive officers above will also enter into Stock Option Agreements (the “Option Agreements”) in connection with the 2021 LTIP awards. Under the Option Agreements, the exercise price per share of the Options shall be equal to the closing price of a share of the Company’s common stock on the date of grant. Option awards vest ratably in one-third increments on each of the first, second and third anniversaries of the date of the grant.
In the event of the grantee’s death, disability or retirement, the RSU Agreements provide for full and/or partial continued vesting of such awards, and the Option Agreements provide for full continued vesting of such awards and the ability to exercise for up to three years following the later of the termination of employment or vesting. The RSU and Option Agreements also provide that the grantee will be subject to confidentiality, non-solicitation, non-competition and non-disparagement restrictive covenants.
Under the LTIP, the following awards were made to the named executive officers. RSU awards were valued on the basis of the closing price of the Company’s stock on February 16, 2021, or $23.79, and for Option awards, each Option had the same value as twenty percent of one share of Company common stock as of February 16, 2021.
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| Ravichandra Saligram, President and Chief Executive Officer | | 136,613 performance based RSUs, representing a value of $3,250,000; 54,645 time based RSUs, representing a value of $1,300,000 and 409,837 stock options, representing a value of $1,950,000 |
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| Christopher Peterson, Chief Financial Officer, and President, Business Operations | | 75,682 performance based RSUs, representing a value of $1,800,469; 30,273 time based RSUs, representing a value of $720,188 and 227,046 stock options, representing a value of $1,080,281 |
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