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GPS » Topics » Paul S. Pressler

This excerpt taken from the GPS DEF 14A filed Apr 26, 2007.

Paul S. Pressler

Mr. Pressler ceased to be our President and Chief Executive Officer on January 22, 2007. Pursuant to his 2002 employment agreement with the Company, he will remain a non-executive employee for a period of 24 months (the “Continuation Period”) and receive the following payments and benefits (“Continuation Pay and Benefits”):

 

  i. Base compensation in effect on the date of his termination as an executive officer ($1,500,000 annually).

 

  ii. Any bonus paid under the Executive MICAP he would otherwise have received during the Continuation Period, up to a maximum payment equal to 100% of his base compensation on the date of his termination as an executive officer ($1,500,000), payable, if and when paid to other executives.

 

  iii. Health insurance coverage as provided to other senior executives by the Company, which we have estimated has a value of $19,600.

 

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Payments and benefits described above are subject to the following conditions:

 

  i. Mr. Pressler executed a release of all claims arising out of his employment and the termination of employment.

 

  ii. In the event Mr. Pressler accepts employment with a competitor of the Company (defined for this purpose as another company primarily engaged in the apparel design or apparel retail business or any retailer with apparel sales in excess of $500 million annually) during the otherwise anticipated Continuation Period, he will cease to be an employee and will forfeit all unaccrued pay and benefits. If Mr. Pressler accepts any other employment with a for-profit enterprise which is not a competitor of the Company (“New Employment”) during the otherwise anticipated Continuation Period: (1) Mr. Pressler will immediately cease to be an employee of the Company as of the date of such acceptance (“New Employment Date”); (2) Mr. Pressler will continue to receive payments during the otherwise anticipated Continuation Period equal to his base compensation, provided that the Company’s obligations to make such payments to Mr. Pressler will be reduced by the amount of any cash compensation he receives for other services during the otherwise anticipated Continuation Period; (3) Mr. Pressler will cease to receive all other payments and benefits, including any bonus to be paid under the Executive MICAP and health insurance coverage, and any other options not vested as of the New Employment Date; and (4) Mr. Pressler agrees to notify the Company’s General Counsel in writing of his New Employment and all related financial terms on or before the New Employment Date.

 

  iii. In the event Mr. Pressler accepts any other compensation during the Continuation Period for other services (e.g. services provided to a charitable organization or as a Director, consultant or otherwise), Mr. Pressler will continue to receive the Continuation Pay and Benefits as a non-executive employee, provided that the Company’s obligations to make such payments will be reduced by the amount of any cash compensation Mr. Pressler receives for such other services, and Mr. Pressler will promptly notify the Company’s General Counsel in writing of the financial terms.

In addition, pursuant to Mr. Pressler’s 2002 employment agreement with the Company, the vesting of the remaining portion of the options granted to him in 2002 that were scheduled to vest during the Continuation Period were accelerated to the date of his termination as an executive officer. All stock options with vesting dates two years beyond that date were cancelled. The estimated value of Mr. Pressler’s accelerated options was $9,378,750 on the date of his termination, based on the difference between the exercise price of those options and the closing price of our stock on that date.

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