SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Mr. Bourdon joins the Company after serving as Chief Financial Officer for Cigna Corporation’s Integrated Medical, Life and Disability, and International Markets businesses. Mr. Bourdon had previously served as Chief Financial Officer for numerous other businesses of Cigna Corporation, including Integrated Medical, Commercial Healthcare, Global Health Benefits and Behavioral Health Solutions, commencing in these roles in 2005.
Employment Agreement with Mr. Bourdon
On September 2, 2020, the Company entered into an employment agreement with Mr. Bourdon (the “Employment Agreement”), effective as of September 8, 2020 (the “Commencement Date”), for a one-year term, with automatic annual renewals, unless sooner terminated by either party. Mr. Bourdon’s annual base salary will be $525,000, and his annual target bonus opportunity under the Company’s Incentive Compensation Plan is 85% of his base salary, with the ability to earn up to 200% of such target bonus based on achieving specified performance goals.
Mr. Bourdon will receive a grant of restricted stock units (“RSUs”) with a value of $500,000 on the date of grant, and a grant of performance-based restricted stock units (“PSUs”) with a value of $500,000 on the date of grant, on the first business day of the month following the Commencement Date. The Company will also grant Mr. Bourdon a sign-on bonus equal to $500,000 (the “Sign-on Bonus”), payable in two installments. The first installment will be payable in cash within 30 days following the Commencement Date in the amount of $250,000 and the second installment will be payable in cash no later than March 15, 2021 in the amount of $250,000. If Mr. Bourdon is terminated for “cause” or he resigns without “good reason” (each as defined in the agreement) prior to the first anniversary of the commencement of his employment, he must repay the entire Sign-on Bonus within 30 days following receipt of written notice from the Company. Beginning with calendar year 2021, Mr. Bourdon will also be entitled to receive equity awards under the Company’s incentive plan on terms at least as favorable as other similarly situated senior level executives, and his annual target value for 2021 for his equity award shall be 300% of his base salary, with a minimum award in 2021 of 200% of his base salary.
If the Company terminates Mr. Bourdon’s employment without cause, or Mr. Bourdon terminates his employment for good reason, then, subject to the execution of a release of claims in favor of the Company: (i) the Company will pay him an amount equal to 1.0 times his base salary, payable over a period of 12 months following termination, (ii) a pro-rated bonus for the year of termination based on actual performance, and (iii) the Company will reimburse him for a portion of premiums for continued health plan coverage for 12 months. In addition, if Mr. Bourdon’s employment is terminated by the Company without cause or if he resigns for good reason in connection with a change in control of the Company (as defined in the agreement), or within two years after such change in control, then in addition to the severance described above and subject to the execution of a release of claims in favor of the Company the Company will pay him (x) a lump sum payment equal to the sum of (a) 1.0 times his base salary plus (b) 2.0 times his target bonus, (y) reimbursement for a portion of premiums for continued health plan coverage for an additional six months and (z) and the RSUs will automatically vest in full upon termination and the PSUs will automatically vest at their target award level upon termination.
The foregoing description of the Employment Agreement is qualified in its entirety by reference to the complete text of the Employment Agreement, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired: Not applicable.
(b) Pro forma financial information: Not applicable.
(d) Exhibits: See Exhibit Index
Description of Exhibit
Cover Page Interactive Data File (embedded within the Inline XBRL document).
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MAGELLAN HEALTH, INC.
Date: September 3, 2020
/s/ Jonathan N. Rubin
Name: Jonathan N. Rubin
Title: Chief Financial Officer