Sturm, Ruger & Company, Inc. has announced an amendment and restatement of its severance benefits agreement for certain officers. The revised terms outline severance payments and benefits under various conditions, such as termination without cause, termination for good reason, and change in control termination.
Under the new terms, if an employee's employment is terminated without cause, the company will pay a lump sum equal to 18 months of the employee's base annual salary as severance payment for services previously rendered to the company. In the event of a change in control termination, the lump sum severance payment is increased to 24 months of the employee's annual compensation.
Additionally, the company will prorate and pay out outstanding retention restricted stock unit awards and performance restricted stock unit awards in cash and/or shares of common stock upon termination under the outlined conditions.
The agreement also specifies that severance benefits will be in lieu of any other severance pay or benefits provided by the company's existing policies and that all payments will be subject to applicable tax withholdings.
Furthermore, the company has outlined provisions for continued life, medical, and dental insurance coverage for a period equal to the number of months of severance pay, subject to plan limitations, in the event of a qualifying termination.
The press release also includes definitions for terms such as annual compensation, base annual salary, cause, change in control, common stock, good reason, release, and term, providing clarity on the application of the severance benefits.
The agreement is intended to be binding upon the company, its successors, and assigns and is subject to the company’s Executive Compensation Clawback Policy. It also specifies that it will be governed by the laws of Connecticut.
As a result of these announcements, the company's shares have moved 0.1% on the market, and are now trading at a price of $38.03. Check out the company's full 8-K submission here.
