World Fuel Services 2013 Annual Report Download - page 71

Agreements with Executive Officers and Key Employees
In March 2008, we entered into agreements with Paul H. Stebbins and Michael J. Kasbar for their continued employment with the
Company. In August 2011, each of the agreements was amended to reflect the transition of Mr. Kasbar from President and Chief
Operating Officer to President and Chief Executive Officer and Mr. Stebbins from Chairman and Chief Executive Officer to Executive
Chairman, effective January 1, 2012. The Kasbar agreement was further amended in April 2012 to eliminate the reference to a specific
annual base salary amount. The Kasbar agreement, as amended, provides for an annual base salary as determined by our
Compensation Committee in its sole discretion (currently $575,000), termination severance benefits, and such incentives and other
compensation and amounts as our Compensation Committee may determine from time to time in its sole discretion. The Kasbar
agreement, as amended, expires on December 31, 2016, unless terminated earlier, and will automatically extend for successive
one-year terms unless either party provides written notice to the other at least one year prior to the expiration of the term that such
party does not want to extend the term. The Stebbins agreement, as amended, provides for an annual base salary of $750,000, which
is subject to change from time to time as determined by the Compensation Committee in its sole discretion, termination severance
benefits, and such incentives and other compensation and amounts as our Compensation Committee may determine from time to
time in its sole discretion. In addition, subject to approval of the Compensation Committee, Mr. Stebbins is eligible to receive annual
equity-based awards with a grant-date value targeted at $500,000, 50% in the form of service-based RSUs and 50% in the form of
performance-based RSUs. The Stebbins agreement, as amended, provides for an initial term of two years from the effective date,
unless terminated earlier, and automatically extends for successive one-year terms unless either party provides written notice to the
other at least 6 months prior to the expiration of the term that such party does not want to extend the term.
Pursuant to their amended agreements, Messrs. Kasbar and Stebbins are each entitled to receive cash severance payments if: (a) we
terminate the executive’s employment without cause following a change of control or for any reason other than death, disability or
cause; (b) the executive resigns for good reason (generally a reduction in his responsibilities or compensation, or a breach by us), or
resigns following a change of control; or (c) either the executive elects or we elect not to extend the term of the agreement, as
amended. The severance payments are equal to $5.0 million for a termination following a change of control and $3.0 million in the
other scenarios described above, a portion of which will be payable two years after the termination of the executive’s employment.
Upon any such termination, we will continue to provide coverage to the executive under our group insurance plans until he is no longer
eligible for coverage under COBRA. Thereafter, we will reimburse the executive for the cost of obtaining private health insurance
coverage for a certain period of time.
All of Mr. Kasbar’s outstanding SSAR Awards, restricted stock and RSUs (collectively, ‘‘outstanding equity awards’’) will immediately
vest in each scenario described in (a) and (b) above following a change of control, except for awards assumed or substituted by a
successor company, in which case, such awards shall continue to vest in accordance with their applicable terms. In each scenario
described in (a), (b) or (c) above where there has not been a change of control, Mr. Kasbar’s outstanding equity awards will vest over a
two-year period following termination of his employment, with any remaining unvested awards vesting on the last day of such
two-year period. For each scenario described above, awards with multiple annual performance conditions must satisfy certain other
requirements in order to have their vesting terms accelerated.
All of Mr. Stebbins’ outstanding equity awards (except for RSUs having performance-based vesting criteria issued to him commencing
in 2012 (the ‘‘New Performance RSUs’’) will vest in accordance with the same terms and conditions as described above for
Mr. Kasbar’s outstanding equity awards. In the case of the New Performance RSUs where a change of control has occurred: (i) if the
New Performance RSUs were not assumed or substituted, then all such RSUs shall immediately vest, or (ii) if the New Performance
RSUs were assumed or substituted, then all such RSUs will no longer be subject to performance-based vesting criteria but will remain
subject to service-based vesting criteria. If certain termination events occur prior to a change of control and the New Performance
RSUs remain outstanding, the number of RSUs that Mr. Stebbins will receive will be determined following the last day of the applicable
performance period based on the Company’s actual performance during such period.
The Kasbar and Stebbins agreements, as amended, also provide that in the event that any amount or benefit payable under the
agreements, taken together with any amounts or benefits otherwise payable to the executive by us or any affiliated company, are
subject to excise tax payments or parachute payments under Section 4999 of the Internal Revenue Code, such amounts or benefits
will be reduced but only if and to the extent that the after-tax present value of such amounts or benefits as so reduced would exceed
the after-tax present value received by the executive before such reduction.
We have also entered into employment agreements or separation agreements with certain of our other executive officers and key
employees. These agreements provide for minimum salary levels, and, in most cases, bonuses which are payable if specified
performance goals are attained. Some executive officers and key employees are also entitled to severance benefits upon termination
or non-renewal of their contracts under certain circumstances.
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