Alan Lacy's company is being bought, but he's getting a good job and a nice raise.
In a regulatory filing Thursday evening, Sears, Roebuck and Co., said Lacy, its chairman and chief executive officer, will get a 50 percent increase in salary over 2003 and receive grants of options and restricted stock when he takes the reins of the new Sears Holdings Corp. after Sears' takeover by Kmart Holding Corp.
Lacy's base salary will increase to at least $1.5 million from $1 million in 2003--his precise salary for this year has not been published--and he'll be eligible for a target bonus of 150 percent of his annual base salary. In addition, he is set to receive 75,000 shares of restricted stock of Sears Holdings, which will vest in full on June 30, 2006, and 200,000 options that vest in increments of one-quarter every year for four years after completion of the merger.
As part of his employment agreement, if Lacy is terminated without cause, he receives two times his annual base salary and target bonus, plus accelerated vesting of equity awards and two more years of benefits. In the filing, Sears also disclosed that if the deal is terminated, Sears may be required to pay Kmart as much as $400 million, while Kmart may face a termination fee of as much as $380 million.