MutualFundWire.com: Legg Hands Ousted Executives Big Parachutes
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Tuesday, April 2, 2013

Legg Hands Ousted Executives Big Parachutes


We now know that two executives at Legg Mason were shown the door as a result of CEO Joe Sullivan's management shakeup.

The executives were Ronald Dewhurst, senior executive vice president (and erstwhile competitor for Legg's CEO position), and Thomas Lemke, executive vice president and general counsel.

We now also know how big the parachutes are for these two departing executives.

According to a filing with the SEC, they got the following packages:

Ronald Dewhurst
  • 167,921 unvested restricted stock units and stock options to purchase 7,000 and 20,040 shares at exercise prices of $33.97 and $27.45, respectively, held by Dewhurst will immediately vest under the terms of the awards or of the Separation Agreement;
  • $3,310,000 payable in a lump sum upon the effectiveness of the Separation Agreement;
  • twelve months of COBRA coverage at the Company's expense for Dewhurst, his spouse and eligible dependents; and
  • certain outplacement services to be provided by the Company's designated provider.
    Thomas Lemke
  • 59,890 unvested shares of restricted stock and stock options to purchase 3,000, 4,800, 6,648, 11,996 and 17,899 shares at exercise prices of $33.97, $27.45, $33.25, $33.99 and $23.72, respectively, held by Lemke will immediately vest under the terms of the awards or of the Separation Agreement;
  • $2,100,000 payable in a lump sum upon the effectiveness of the Separation Agreement;
  • twelve months of COBRA coverage at the Company's expense for Lemke, his spouse and eligible dependents; and
  • certain outplacement services to be provided by the Company's designated provider.

    • According to the SEC filing, the two parachutes will cost Legg approximately $8.5 million.

    In return for their packages, Dewhurst and Lemke have agreed for a period of 12 months to refrain from soliciting or inducing any employee, or client of the company or its related entities, to terminate his or her employment or business relationship with the company and to not disclose or misuse confidential information of the company at any time.


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