NEW YORK
|
13-5593032
|
|
(State of other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
111 RIVER STREET, HOBOKEN NJ
|
07030
|
|
(Address of principal executive offices)
|
Zip Code
|
|
Registrant's telephone number, including area code
|
(201) 748-6000
|
|
NOT APPLICABLE
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
YES [ ] NO [X]
|
PART I
|
-
|
FINANCIAL INFORMATION
|
PAGE NO.
|
|
Item 1.
|
Financial Statements
|
|||
3
|
||||
4
|
||||
5
|
||||
6
|
||||
7-16
|
||||
Item 2.
|
17-24
|
|||
Item 3.
|
25-26
|
|||
Item 4.
|
27
|
|||
PART II
|
-
|
OTHER INFORMATION
|
||
Item 1.
|
27
|
|||
Item 2.
|
27
|
|||
Item 6.
|
28
|
|||
29-33
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||||
(In thousands)
|
||||||
July 31,
|
April 30,
|
|||||
2017
|
2016
|
2017
|
||||
(Unaudited)
|
(Unaudited)
|
|||||
Assets:
|
||||||
Current Assets
|
||||||
Cash and cash equivalents
|
$
|
84,113
|
$
|
185,894
|
$
|
58,516
|
Accounts receivable
|
198,576
|
213,968
|
188,679
|
|||
Inventories
|
47,892
|
54,822
|
47,852
|
|||
Prepaid and other current assets
|
66,177
|
119,392
|
64,688
|
|||
Total Current Assets
|
396,758
|
574,076
|
359,735
|
|||
Product Development Assets
|
68,773
|
39,239
|
70,955
|
|||
Royalty Advances
|
21,578
|
24,883
|
28,320
|
|||
Technology, Property & Equipment
|
265,291
|
214,740
|
252,488
|
|||
Intangible Assets
|
833,676
|
831,249
|
828,099
|
|||
Goodwill
|
996,000
|
916,690
|
982,101
|
|||
Income Tax Deposits
|
-
|
62,200
|
-
|
|||
Other Non-Current Assets
|
85,028
|
80,185
|
84,519
|
|||
Total Assets
|
$
|
2,667,104
|
$
|
2,743,262
|
$
|
2,606,217
|
Liabilities & Shareholders' Equity:
|
||||||
Current Liabilities
|
||||||
Accounts and royalties payable
|
$141,034
|
$138,397
|
$139,206
|
|||
Deferred revenue
|
334,625
|
321,616
|
436,235
|
|||
Accrued employment costs
|
81,245
|
55,241
|
98,185
|
|||
Accrued income taxes
|
24,605
|
3,368
|
22,222
|
|||
Accrued pension liability
|
5,820
|
5,467
|
5,776
|
|||
Other accrued liabilities
|
83,509
|
69,042
|
86,232
|
|||
Total Current Liabilities
|
670,838
|
593,131
|
787,856
|
|||
Long-Term Debt
|
551,645
|
653,000
|
365,000
|
|||
Accrued Pension Liability
|
212,843
|
206,814
|
214,597
|
|||
Deferred Income Tax Liabilities
|
150,425
|
191,388
|
160,491
|
|||
Other Long-Term Liabilities
|
72,135
|
82,521
|
75,136
|
|||
Shareholders' Equity
|
||||||
Class A & Class B common stock
|
83,182
|
83,190
|
83,182
|
|||
Additional paid-in-capital
|
388,123
|
373,209
|
387,896
|
|||
Retained earnings
|
1,706,267
|
1,686,417
|
1,715,423
|
|||
Accumulated other comprehensive loss
|
(482,190)
|
(484,152)
|
(507,287)
|
|||
Treasury
stock
|
(686,164)
|
(642,256)
|
(676,077)
|
|||
Total Shareholders' Equity
|
1,009,218
|
1,016,408
|
1,003,137
|
|||
Total Liabilities & Shareholders' Equity
|
$
|
2,667,104
|
$
|
2,743,262
|
$
|
2,606,217
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||
(In thousands except per share information)
|
||||
For The Three Months
|
||||
Ended
July 31,
|
||||
2017
|
2016
|
|||
Revenue
|
$
|
411,444
|
$
|
404,285
|
Costs and Expenses
|
||||
Cost of sales
|
114,788
|
113,478
|
||
Operating and administrative expenses
|
243,808
|
235,340
|
||
Restructuring charges (credits)
|
25,729
|
(920)
|
||
Amortization of intangibles
|
12,619
|
12,573
|
||
Total Costs and Expenses
|
396,944
|
360,471
|
||
Operating Income
|
14,500
|
43,814
|
||
Interest Expense
|
(3,273)
|
(4,071)
|
||
Foreign Exchange Transaction (Loss) Gain
|
(5,136)
|
221
|
||
Interest Income and Other
|
5
|
377
|
||
Income Before Taxes
|
6,096
|
40,341
|
||
(Benefit) Provision For Income Taxes
|
(3,140)
|
9,327
|
||
Net Income
|
$
|
9,236
|
$
|
31,014
|
Earnings Per Share
|
||||
Diluted
|
$
|
0.16
|
$
|
0.53
|
Basic
|
$
|
0.16
|
$
|
0.54
|
Cash Dividends Per Share
|
||||
Class A Common
|
$
|
0.32
|
$
|
0.31
|
Class B Common
|
$
|
0.32
|
$
|
0.31
|
Average Shares
|
||||
Diluted
|
57,709
|
58,176
|
||
Basic
|
57,016
|
57,438
|
||
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||
(In thousands)
|
||||
For The Three Months
|
||||
Ended
July
31,
|
||||
2017
|
2016
|
|||
Net Income
|
$
|
9,236
|
$
|
31,014
|
Other Comprehensive Income (Loss):
|
||||
Foreign currency translation adjustment
|
27,405
|
(44,640)
|
||
Unamortized retirement costs, net of tax
(benefit)
provision of $(577) and $3,304, respectively
|
(1,947)
|
9,004
|
||
Unrealized gain on interest rate swaps, net of tax benefit of $221 and $509, respectively
|
(361)
|
(830)
|
||
Total Other Comprehensive Income (Loss)
|
25,097
|
(36,466)
|
||
Comprehensive Income (Loss)
|
$
|
34,333
|
$
|
(5,452)
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
JOHN WILEY & SONS, INC. AND SUBSIDIARIES
|
||||
(In thousands)
|
||||
|
|
For The Three Months
|
||
|
Ended July 31,
|
|||
2017
|
2016
|
|||
Operating Activities
|
||||
Net income
|
$
|
9,236
|
$ |
31,014
|
Adjustments to reconcile net income to cash used for operating activities:
|
||||
Amortization of intangibles
|
|
12,619
|
12,573
|
|
Amortization of composition costs
|
|
9,644
|
9,731
|
|
Depreciation of technology, property and equipment
|
|
18,540
|
17,125
|
|
Restructuring charges (credits)
|
25,729
|
(920)
|
||
Restructuring payments
|
(13,357)
|
(6,461)
|
||
Stock-based compensation (benefit) expense
|
(1,495)
|
224
|
||
Royalty advances
|
(26,290)
|
(26,166)
|
||
Earned royalty advances
|
33,129
|
30,555
|
||
Other non-cash (credits) charges
|
972
|
16,538
|
||
Change in deferred revenue
|
(109,915)
|
(88,434)
|
||
Net change in operating assets and liabilities
|
|
(40,643)
|
(132,491)
|
|
Cash Used for Operating Activities
|
|
(81,831)
|
(136,712)
|
|
Investing Activities
|
|
|||
Product development spending
|
|
(5,907)
|
(7,989)
|
|
Additions to technology, property and equipment
|
|
(30,111)
|
(20,778)
|
|
Acquisitions, net of cash acquired
|
(4,413)
|
(8,600)
|
||
Cash Used for Investing Activities
|
|
(40,431)
|
(37,367)
|
|
Financing Activities
|
|
|||
Repayments of long-term debt
|
(28,700)
|
(153,707)
|
||
Borrowings of long-term debt
|
214,664
|
201,700
|
||
Change in book overdrafts
|
(13,977)
|
(12,261)
|
||
Cash dividends
|
(18,382)
|
(17,914)
|
||
Purchase of treasury stock
|
(14,016)
|
(11,289)
|
||
Proceeds from exercise of stock options and other
|
5,599
|
13,689
|
||
Cash Provided by Financing Activities
|
145,188
|
20,218
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
2,671
|
(24,051)
|
||
Cash and Cash Equivalents
|
||||
Increase (Decrease) for the Period
|
|
25,597
|
(177,912)
|
|
Balance at Beginning of Period
|
|
58,516
|
363,806
|
|
Balance at End of Period
|
$
|
84,113
|
$ |
185,894
|
Cash Paid During the Period for:
|
||||
Interest
|
$
|
2,932
|
$ |
1,793
|
Income taxes, net
|
$
|
8,522
|
$ |
10,198
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
|
1. |
Basis of Presentation
|
2. |
Recent Accounting Standards
|
·
|
Excess income tax benefits and deficiencies from stock-based compensation are now recognized as a discrete item within the Provision for Income Taxes in the Condensed Consolidated Statements of Income, rather than Additional Paid-In-Capital in the Condensed Consolidated Statements of Financial Position, and amounted to $0.2 million for the three months ended July 31, 2017.
|
·
|
Excess income tax benefits and deficiencies are no longer considered when applying the treasury stock method for computing diluted shares outstanding, which resulted in an increase in diluted shares outstanding of approximately 11,000 shares for the three months ended July 31, 2017.
|
·
|
Excess income tax benefits and deficiencies are now classified as an Operating Activity in the Condensed Consolidated Statements of Cash Flows. As a result, $0.2 million of excess tax benefits were recorded in operating activities for the three months ended July 31, 2017, while $0.3 million were recorded in Financing Activities for the three months ended July 31, 2016.
|
·
|
The Company has elected to continue estimating expected forfeitures in determining stock compensation expense each period.
|
3. |
Stock-Based Compensation
|
For the Three Months
Ended July 31,
|
|||
2017
|
2016
|
||
Restricted Stock:
|
|||
Awards granted (in thousands)
|
387
|
368
|
|
Weighted average fair value of grant
|
$51.35
|
$51.04
|
Foreign
|
Unamortized
|
Interest
|
|||||
Currency
|
Retirement
|
Rate
|
|||||
Translation
|
Costs
|
Swaps
|
Total
|
||||
Balance at April 30, 2017
|
$(319,212)
|
$(190,502)
|
$2,427
|
$(507,287)
|
|||
Other comprehensive income (loss) before reclassifications
|
27,405
|
(3,017)
|
(432)
|
23,956
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
1,070
|
71
|
1,141
|
|||
Total other comprehensive income (loss)
|
27,405
|
(1,947)
|
(361)
|
25,097
|
|||
Balance at July 31, 2017
|
$(291,807)
|
$(192,449)
|
$2,066
|
$(482,190)
|
|||
Balance at April 30, 2016
|
$(267,920)
|
$(179,405)
|
$(361)
|
$(447,686)
|
|||
Other comprehensive income (loss) before reclassifications
|
(44,640)
|
9,668
|
(1,055)
|
(36,027)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
(664)
|
225
|
(439)
|
|||
Total other comprehensive income (loss)
|
(44,640)
|
9,004
|
(830)
|
(36,466)
|
|||
Balance at July 31, 2016
|
$(312,560)
|
$(170,401)
|
$(1,191)
|
$(484,152)
|
For the Three Months
Ended January 31,
|
|||
2017
|
2016
|
||
Weighted average shares outstanding
|
57,188
|
57,665
|
|
Less: Unearned restricted shares
|
(172)
|
(227)
|
|
Shares used for basic earnings per share
|
57,016
|
57,438
|
|
Dilutive effect of stock options and other stock awards
|
693
|
738
|
|
Shares used for diluted earnings per share
|
57,709
|
58,176
|
Cumulative
|
|||||
Program
|
|||||
For the Three Months
|
Charges
|
||||
Ended July 31,
|
to Date
|
||||
2017
|
2016
|
||||
Charges (Credits) by Segment:
|
|||||
Research
|
4,836
|
$(69)
|
$24,992
|
||
Publishing
|
7,254
|
353
|
39,743
|
||
Solutions
|
2,795
|
-
|
5,346
|
||
Shared Services
|
10,844
|
(1,204)
|
93,592
|
||
Total
|
$25,729
|
$(920)
|
$163,673
|
||
Charges (Credits) by Activity:
|
|||||
Severance
|
$24,721
|
$257
|
$112,311
|
||
Process Reengineering Consulting
|
1,521
|
7
|
20,335
|
||
Other Activities
|
(513)
|
(1,184)
|
31,027
|
||
Total
|
$25,729
|
$(920)
|
$163,673
|
Foreign
|
|||||
Translation &
|
|||||
April 30, 2017
|
Charges
|
Payments
|
Reclassifications
|
July 31, 2017
|
|
Severance
|
$10,082
|
$24,721
|
$(5,842)
|
$336
|
$29,297
|
Process Reengineering Consulting
|
-
|
1,521
|
(1,321)
|
-
|
200
|
Other Activities
|
12,708
|
(513)
|
(6,194)
|
(2,046)
|
3,955
|
Total
|
$22,790
|
$25,729
|
$(13,357)
|
$(1,710)
|
$33,452
|
For the Three Months
|
|||
Ended July 31,
|
|||
2017
|
2016
|
||
Revenue:
|
|||
Research
|
$223,627
|
$207,223
|
|
Publishing
|
131,278
|
144,962
|
|
Solutions
|
56,539
|
52,100
|
|
Total Revenue
|
$411,444
|
$404,285
|
|
Contribution to Profit (Loss):
|
|||
Research
|
$61,461
|
$60,435
|
|
Publishing
|
5,009
|
19,320
|
|
Solutions
|
(1,968)
|
146
|
|
Total Contribution to Profit
|
$64,502
|
$79,901
|
|
Corporate Expenses
|
(50,002)
|
(36,087)
|
|
Operating Income
|
$14,500
|
$43,814
|
9. |
Inventories
|
As of July 31,
|
As of April 30,
|
||||
2017
|
2016
|
2017
|
|||
Finished goods
|
$39,859
|
$43,102
|
$38,329
|
||
Work-in-process
|
3,336
|
6,422
|
7,078
|
||
Paper and other materials
|
691
|
3,968
|
650
|
||
$43,886
|
$53,492
|
$46,057
|
|||
Inventory value of estimated sales returns
|
7,013
|
6,179
|
4,727
|
||
LIFO reserve
|
(3,007)
|
(4,849)
|
(2,932)
|
||
Total inventories
|
$47,892
|
$54,822
|
$47,852
|
As of July 31,
|
As of April 30,
|
||||
2017
|
2016
|
2017
|
|||
Intangible assets with indefinite lives:
|
|||||
Brands and trademarks
|
$132,042
|
$137,339
|
$135,061
|
||
Content and publishing rights
|
90,113
|
84,976
|
84,173
|
||
$222,155
|
$222,315
|
$219,234
|
|||
Net intangible assets with determinable lives:
|
|||||
Content and publishing rights
|
$424,105
|
$429,826
|
$421,597
|
||
Customer relationships
|
168,639
|
164,900
|
169,116
|
||
Brands and trademarks
|
17,923
|
13,679
|
17,195
|
||
Covenants not to compete
|
854
|
529
|
957
|
||
$611,521
|
$608,934
|
$608,865
|
|||
Total
|
$833,676
|
$831,249
|
$828,099
|
For the Three Months
Ended July 31,
|
|||
2017
|
2016
|
||
Service cost
|
$230
|
$252
|
|
Interest cost
|
6,252
|
7,198
|
|
Expected return on plan assets
|
(9,657)
|
(9,375)
|
|
Net amortization of prior service cost
|
(25)
|
(25)
|
|
Recognized net actuarial loss
|
1,501
|
1,362
|
|
Net pension income
|
$(1,699)
|
$(588)
|
13. |
Derivative Instruments and Hedging Activities
|
·
|
incremental revenue from the Atypon acquisition ($8 million) in the second quarter of the prior fiscal year;
|
·
|
Research journal revenue growth ($4 million);
|
·
|
higher Solutions revenue ($4 million); and
|
·
|
the favorable impact of foreign exchange ($3 million); partially offset by
|
·
|
a decline in Publishing revenue ($12 million).
|
·
|
higher royalty costs on Research journals due to title mix; partially offset by
|
·
|
lower Education Services recruitment costs driven by process optimization.
|
·
|
one-time benefits in the prior year related to changes in the Company's retiree and long-term disability plans ($4 million) and a life insurance recovery ($2 million);
|
·
|
incremental costs associated with the Atypon acquisition ($5 million);
|
·
|
an impairment charge in the current year related to one of the Company's Publishing brands as a result of a business review performed on the Publishing segment's products and services ($4 million); partially offset by
|
·
|
lower technology costs related to the Company's ERP implementation and other reductions in technology, development and maintenance costs.
|
Cumulative
|
|||||
Program
|
|||||
For the Three Months
|
Charges
|
||||
Ended July 31,
|
to Date
|
||||
2017
|
2016
|
||||
Charges (Credits) by Segment:
|
|||||
Research
|
$4,836
|
$(69)
|
$24,992
|
||
Publishing
|
7,254
|
353
|
39,743
|
||
Solutions
|
2,795
|
-
|
5,346
|
||
Shared Services
|
10,844
|
(1,204)
|
93,592
|
||
Total
|
$25,729
|
$(920)
|
$163,673
|
||
Charges (Credits) by Activity:
|
|||||
Severance
|
$24,721
|
$257
|
$112,311
|
||
Process Reengineering Consulting
|
1,521
|
7
|
20,335
|
||
Other Activities
|
(513)
|
(1,184)
|
31,027
|
||
Total
|
$25,729
|
$(920)
|
$163,673
|
·
|
the current year restructuring charges; and
|
·
|
the current year foreign exchange transaction losses; partially offset by
|
·
|
a lower effective income tax rate.
|
For the Three Months
|
||||
Ended July 31,
|
% change
|
|||
RESEARCH:
|
2017
|
2016
|
% change
|
w/o FX (a)
|
Revenue:
|
||||
Journal Subscriptions
|
$168,325
|
$162,684
|
3%
|
0%
|
Open Access
|
8,803
|
7,513
|
17%
|
20%
|
Licensing, Reprints, Backfiles, and Other
|
38,230
|
37,026
|
3%
|
6%
|
Total Journal Revenue
|
$215,358
|
$207,223
|
4%
|
2%
|
Publishing Technology Services (Atypon)
|
8,269
|
-
|
||
Total Research Revenue
|
$223,627
|
$207,223
|
8%
|
6%
|
Cost of Sales
|
59,475
|
53,271
|
12%
|
12%
|
Gross Profit
|
$164,152
|
$153,952
|
7%
|
4%
|
Gross Profit Margin
|
73.4%
|
74.3%
|
||
Operating Expenses
|
(90,886)
|
(87,166)
|
4%
|
2%
|
Amortization of Intangibles
|
(6,969)
|
(6,282)
|
11%
|
8%
|
Restructuring Charges (See Note 7)
|
(4,836)
|
(69)
|
||
Contribution to Profit
|
$61,461
|
$60,435
|
2%
|
-%
|
Contribution Margin
|
27.5%
|
29.2%
|
·
|
incremental revenue from the recent acquisition of Atypon ($8 million);
|
·
|
Open Access growth driven by the strong performance of existing titles and new title launches; and
|
·
|
other journal revenue increases particularly in advertising, backfiles and the licensing of intellectual content.
|
·
|
9 new society journals were signed in the first quarter with combined annual revenue of $6.6 million
|
·
|
19 renewals/extensions were signed with $11.6 million in combined annual revenue
|
·
|
4 journal contacts were not renewed with annual revenue of $0.9 million
|
For the Three Months
|
||||
Ended July 31,
|
% change
|
|||
PUBLISHING:
|
2017
|
2016
|
% change
|
w/o FX (a)
|
Revenue:
|
||||
STM and Professional Publishing
|
$63,600
|
$70,697
|
-10%
|
-8%
|
Education Publishing
|
45,736
|
54,861
|
-17%
|
-16%
|
Course Workflow (WileyPLUS)
|
1,210
|
866
|
40%
|
40%
|
Test Preparation and Certification
|
11,490
|
9,558
|
20%
|
20%
|
Licensing, Distribution, Advertising and Other
|
9,242
|
8,980
|
3%
|
4%
|
Total Publishing Revenue
|
$131,278
|
$144,962
|
-9%
|
-8%
|
Cost of Sales
|
44,377
|
48,390
|
-8%
|
-9%
|
Gross
Profit
|
$86,901
|
$96,572
|
-10%
|
-9%
|
Gross Profit Margin
|
66.2%
|
66.6%
|
||
Operating Expenses
|
(72,426)
|
(74,122)
|
-2%
|
-3%
|
Amortization of Intangibles
|
(2,212)
|
(2,777)
|
-20%
|
-24%
|
Restructuring (Charges) Credits (see Note 7)
|
(7,254)
|
(353)
|
||
Contribution to Profit
|
$5,009
|
$19,320
|
-74%
|
-18%
|
Contribution
Margin
|
3.8%
|
13.3%
|
(a)
|
Adjusted to exclude the fiscal year 2018 and 2017 Restructuring (Charges) Credits
|
·
|
Lower print book revenues, particularly in Education Publishing, due to overall softness in the market as well as other retail options such as rental and digital; partially offset by
|
·
|
Growth in Test Preparation and Certification revenues driven by proprietary sales of the Company's professional test certification products.
|
·
|
the decline in gross profit;
|
·
|
current year restructuring charges;
|
·
|
an impairment charge in the current year related to one of the Company's Publishing brands as a result of a business review performed on Publishing's products and services ($4 million); and
|
·
|
investments in publishing partnerships; partially offset by
|
·
|
lower technology costs.
|
For the Three Months
|
||||
Ended July 31,
|
% change
|
|||
SOLUTIONS:
|
2017
|
2016
|
% change
|
w/o FX (a)
|
Revenue:
|
||||
Education Services (OPM)
|
$26,337
|
$23,172
|
14%
|
14%
|
Professional Assessment
|
14,887
|
13,522
|
10%
|
10%
|
Corporate Learning
|
15,315
|
15,406
|
-1%
|
-1%
|
Total Solutions Revenue
|
$56,539
|
$52,100
|
9%
|
9%
|
|
|
|||
Cost of Sales
|
10,926
|
11,817
|
-8%
|
-8%
|
Gross Profit
|
$45,613
|
$40,283
|
13%
|
13%
|
Gross Profit Margin
|
80.7%
|
77.3%
|
||
Operating Expenses
|
(41,348)
|
(36,623)
|
13%
|
13%
|
Amortization of Intangibles
|
(3,438)
|
(3,514)
|
-2%
|
-2%
|
Restructuring Charges (see Note 7)
|
(2,795)
|
-
|
||
Contribution to (Loss) Profit
|
$(1,968)
|
$146
|
N/M
|
N/M
|
Contribution Margin
|
-3.5%
|
0.3%
|
(a)
|
Adjusted to exclude the fiscal year 2018 Restructuring Charges
|
·
|
Education Services (OPM) tuition revenue growth due to higher enrollments; and
|
·
|
Professional Assessment growth due to increased volume in the Company's post-hire assessment offerings.
|
·
|
$10.8 million of restructuring charges; and
|
·
|
one-time benefits in the prior year related to changes in the Company's retiree and long-term disability plans ($4 million) and a life insurance recovery ($2 million); partially offset by
|
·
|
lower technology costs driven by reduced spending on the Company's ERP system and other reductions in depreciation, outsourcing and systems development consulting costs.
|
·
|
lower accounts receivable due the timing of collections;
|
·
|
timing of vendor payments; and
|
·
|
lower employee retirement plan contributions; partially offset by
|
·
|
lower journal subscription cash collections; and
|
·
|
higher payments related to the Company's restructuring programs.
|
|
July 31, 2017
|
July 31, 2016
|
April 30, 2017
|
||
Accounts Receivable
|
$(38,728)
|
$(34,700)
|
$(34,769)
|
||
Inventories
|
7,013
|
6,179
|
4,727
|
||
Accounts and Royalties Payable
|
(6,144)
|
(5,239)
|
(5,741)
|
||
Decrease in Net Assets
|
$(25,571)
|
$(23,282)
|
$(24,300)
|
Total Number of
Shares Purchased
|
Average Price
Paid Per Share
|
Total Number of
Shares Purchased as part of a
Publicly Announced Program
|
Maximum Number of
Shares that May be
Purchased Under the Program
|
||||
May 2017
|
-
|
-
|
-
|
3,793,648
|
|||
June 2017
|
125,158
|
52.42
|
125,158
|
3,668,490
|
|||
July 2017
|
140,000
|
53.20
|
140,000
|
3,528,490
|
|||
Total
|
265,158
|
52.86
|
265,158
|
JOHN WILEY & SONS, INC.
|
||
Registrant
|
By
|
/s/ Matthew S. Kissner
|
||
Matthew S. Kissner
|
|||
Interim President and Chief Executive Officer and
|
|||
Chairman of the Board
|
By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Chief Financial Officer and
|
|||
Executive Vice President, Technology and Operations
|
By
|
/s/ Christopher Caridi
|
||
Christopher Caridi
|
|||
Senior Vice President, Controller and
|
|||
Chief Accounting Officer
|
Dated: September 7, 2017
|
- |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and
|
- |
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented.
|
- |
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and we have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d. |
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
|
- |
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the board of directors:
|
a. |
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.
|
By
|
/s/ Matthew S. Kissner
|
||
Matthew S. Kissner
|
|||
Interim President and Chief Executive Officer and
|
|||
Chairman of the Board
|
|||
September 7, 2017
|
- |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and
|
- |
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
|
- |
The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Company and we have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d. |
Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
|
- |
The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the board of directors:
|
a. |
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
|
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls.
|
By
|
/s/ John A. Kritzmacher
|
||
John A. Kritzmacher
|
|||
Chief Financial Officer and
|
|||
Executive Vice President, Technology and Operations
|
|||
September 7, 2017
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (as amended), as applicable; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By
|
/s/ Matthew S. Kissner
|
||
Matthew S. Kissner
|
|||
Interim President and Chief Executive Officer and
|
|||
Chairman of the Board
|
|||
September 7, 2017
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934 (as amended), as applicable; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1.
|
Last day of Active Employment:
Your last day of active employment as President and CEO will be May 8, 2017 and your last day in the office will be May 31, 2017.
|
2.
|
Severance:
Subject to the terms of this Agreement, you will receive severance equal to twenty-four (24) months of your current base salary, or $1,560,000, payable in a lump sum after the expiration of the revocation period set forth in paragraph
20 below.
|
3.
|
Consulting Agreement:
Following the execution of this Agreement, you will provide, as Senior Advisor, up to eight (8) hours per week advisory services to the Interim CEO for the period June 2017 through August 2017. You will be paid $429,000 for undertaking this role, payable as a lump sum in September 2017. You will not be eligible for benefits (except statutory, as required) or incentive during this period; but all of your travel (as requested by the Interim CEO) and other reasonable costs will be reimbursed.
|
4.
|
Incentive Payment:
You will be eligible to receive an incentive payment in July 2017 under and in accordance with the FY'17 Wiley Executive Annual
Incentive Plan (the "Plan"). The Strategic Milestones portion will be paid at the target level. You will be notified of the amount of such incentive payment in June 2017. The terms and conditions of the Plan shall apply to such payment.
|
5.
|
Equity Awards:
You are considered retiree-eligible for purposes of your outstanding equity awards, as follows:
|
•
|
Stock options will continue to vest per the terms of the grant agreements, and are fully exercisable, once vested, during the 10-year term of the option.
|
•
|
Restricted share units will continue to vest per the terms of the grant agreements, and will not be subject to the two-year limitation on vesting.
|
•
|
Earned but unvested restricted performance share units from June 2013 will vest and are payable in the 7
th
month following your termination of employment, consistent with IRC Section 409A.
|
•
|
Prorated participation in all active performance share unit cycles (FY16-18 and FY17-19), with payout based on actual performance at the end of the cycles.
|
•
|
The unvested portion of your June 2015 restricted share grant (7500 shares), which was made upon your promotion to CEO, will vest on June 1, 2017.
|
6.
|
Professional Services:
The Company will cover legal fees in connection with this agreement; PwC tax preparation; and Ayco consulting services, up to $150,000 per year, for a two-year period following your separation from service. Such expenses will be submitted for reimbursement and payable in the same year the expenses are incurred. These can be directly reimbursed to the service provider.
|
7.
|
Relocation:
The Company will cover shipment of your household goods and your family's air travel from the US to the UK. Such expenses will be submitted for reimbursement and payable in the same year the expenses are incurred. These can be directly reimbursed to the service provider.
|
8.
|
Lease:
The Company will assume responsibility for the lease and expenses related to your New York City apartment, which will be available to you during your advisory services term (see paragraph 3) and otherwise to other traveling Wiley executives. This term will cover June through August 2017 and will be paid in lump sum.
|
9.
|
Confidentiality:
You again acknowledge that during the course of employment with Wiley, you were privy to certain confidential information which was communicated to you verbally or in writing, relating to Wiley, its businesses, its strategies, its financial planning, its customers, trade secrets, know-how, inventions, techniques, processes, algorithms, software programs, hardware designs, schematics, designs, contracts, customer lists, financial information, sales and marketing plans, business plans and information, products, current and potential business partners, customers or other third parties (collectively, "Third Parties"), or other information which is not known to the public, and which may include material developed by you in the course of your employment. You again acknowledge that all such information is and shall be deemed to be "Confidential Information" belonging to Wiley or Third Parties. You agree to protect such Confidential Information from disclosure with the same degree of care that you normally use to protect your own confidential information, but not less than reasonable care, shall not divulge any such Confidential Information to anyone and shall not make use of the same without prior written consent of Wiley. All Confidential Information is and shall remain the property of Wiley (or the applicable Third Party), and you have and shall not acquire any rights therein.
|
10.
|
Taxes:
All withholding taxes and other payroll taxes will be deducted from all payments due you under this Agreement. Any and all taxes that may be due by you as a result of payments made to you hereunder shall be your responsibility.
|
11.
|
Health, Life, AD&D and Disability Insurance Benefits:
Your group benefits coverage will cease May 31, 2017. Wiley will pay 24 months of comparable coverage you received under the Company's Group Health Plan, LTD
Plan, and Group Life and Accidental Death and Dismemberment Insurance, to the extent comparable coverage is not provided by any new employer. If such coverage cannot be provided on a tax-advantaged basis or would be at unreasonable cost for the Company, the Company will make a lump-sum payment to you, such that your after-tax cost of coverage will be no greater than the cost for such coverage to a similarly-situated active employee.
|
12.
|
Employee Savings Plan:
For details regarding your account balance, investment choices and distribution options, please go to
www.vanguard.com
or call a Vanguard Participant Services Associate at 1-800-523-1188. You may defer distribution until age 70-1/2.
|
13.
|
Supplemental Executive Retirement Plan:
Under the terms of the
Supplemental Executive Retirement
Plan
, you will commence your benefit after the termination of your employment. The SERP benefit is subject to a six month delay.
Donna Preolo, Wiley's Senior Rewards Manager, will provide you with documentation.
|
14.
|
Deferred Compensation Plan:
Under the terms of the Deferred Compensation Plan your termination will be considered Retirement. For details on the timing of distributions of your account, please contact Donna Preolo at 201-748-8709 or dpreolo@wiley.com.
|
15.
|
UK Approved Scheme:
Scottish Widows is preparing a statement of your benefit and it will be forwarded to you under separate cover.
|
16.
|
Company Property:
You are responsible for returning all property belonging to the Company by August 31, 2017. You may retain your laptop, phone and phone number. The Company will have no responsibility for any phone, data or other service charges relating to the laptop or phone after August 31, 2017.
|
17.
|
Transition Responsibilities:
This separation package is predicated on your compliance with the terms of this Agreement, including its Release provisions and your agreeing to carry out your responsibilities satisfactorily to ensure a smooth transition of all projects through your last day of employment and through your advisory term.
|
18.
|
Non-Competition:
In consideration of the payments set forth in paragraphs 2, 4 and 5, other consideration as provided herein and other good and valuable consideration, to which you otherwise would not be entitled, you again represent and agree that you will comply with the following terms and conditions:
|
19.
|
General Release:
In consideration of the payment set forth in paragraph 2, other consideration as provided herein and other good and valuable consideration, to which you otherwise would not be entitled, and in full and final settlement of all claims and amounts that you may have the right to receive from John Wiley & Sons, Inc. or its subsidiaries, under any applicable laws, you, on behalf of yourself, your heirs, administrators and assigns and all persons claiming by, through or under them, hereby release and forever discharge John Wiley & Sons, Inc., and each of their owners, affiliates, subsidiaries, partners, stockholders, and their officers, attorneys, directors, employees, agents, representatives, predecessors, successors and assigns, individually, and their heirs, executors, successors and assigns (collectively, the "Releasees") from any and all past and present claims, demands, obligations, actions, causes of action, damages, costs, debts, liabilities, expenses and compensation of any nature whatsoever, whether known or unknown, foreseen or unforeseen, suspected or unsuspected that you as Releasor had, now have or in the future may or could have against Releasees, including but not limited to those arising under any and all applicable laws, in connection with any rights, claims in law or equity for wrongful or abusive discharge, whistleblowing, discriminatory, or retaliatory treatment under any local, state or federal law, including but not limited to, the Age Discrimination in Employment Act of 1967, ("ADEA"), the Civil Rights Acts of 1866, 1964 and 1991, the Employee Retirement Income Security Act of 1974, the Older Worker Benefits Protection Act of 1990, the Worker Adjustment Retraining and Notification Act, the Americans with Disabilities Act, the Fair Labor Standards Act, The New Jersey Law Against Discrimination, The New Jersey Conscientious Employee Protection Act, California Fair Employment and Housing Act, Colorado Anti-Discrimination Act, Florida Civil Rights Act, Illinois Human Rights Act, Indiana Civil Rights Law, Massachusetts Fair Employment Practices Law, personal injury, defamation, mental anguish, breach of contract, injury to health and personal reputation and any other claim of any nature whatsoever relating to or in connection with your employment with John Wiley & Sons, Inc. or its subsidiaries, the termination of your employment, rights, payments and benefits under any employment arrangements, or agreements, any qualified or nonqualified plans, vacation pay, health and other benefits except as otherwise provided you in this Agreement, and excluding any claims by you to enforce your rights under this Agreement. The provisions of any law that provide in substance that a release shall not extend to unknown or unsuspected claims at the time of execution of this release are, to the extent permitted by law, hereby waived.
|
20.
|
Acknowledgment of Receipt of Agreement/Revocation:
You acknowledge receiving this Agreement on the date indicated above and that you have up to 45 days from that date to consider the terms of this Agreement. This Agreement is revocable by you for seven (7) days after it is signed by you. This Agreement shall not be effective or enforceable until the period for revocation has expired. If revoked, such notice of revocation shall be submitted by you, in writing, to me no later than the close of business on the seventh (7
th
) day following the date you originally sign this Agreement.
|
21.
|
Waiver of Age Discrimination:
You understand and agree that, among other possible rights or claims herein waived or released by you, (i) you are, in particular, waiving rights and claims for age discrimination, including claims under state, federal law, and those based on Age Discrimination in Employment Act ("ADEA") in exchange for the payments and other consideration described above that are not otherwise due you: and (ii) you are
not
waiving rights or claims for age discrimination that may arise
after
the effective date of this Agreement.
|
22.
|
Your Right to Consult with an Attorney:
You acknowledge that you have been advised of your right to consult with an attorney prior to signing this Agreement and that sufficient opportunity has been made available to you to consult with an attorney.
|
23.
|
Entire Agreement:
This Agreement sets forth your full and complete rights, payments and benefits and represents the entire agreement between the parties, superseding all other agreements and commitments whether oral or written. You acknowledge that you are not relying upon any representations or statements, written or oral, made by or on behalf of the Company not set forth herein.
|
24.
|
Applicable Law:
This Agreement shall be construed in accordance with New York law without regard to such State's conflict of law rules. Any dispute arising from or related to this Agreement shall be brought exclusively before the courts located in the State and County of New York.
|
25.
|
Non-Admission:
Nothing in this Agreement is intended to be nor shall be deemed to be an admission of liability by any party, or an admission of the existence of any facts upon which liability could be based.
|
26.
|
Voluntary and Knowing Action:
You acknowledge that you have read this document, and that you understand its meaning. You acknowledge that you agree to the terms of this Agreement and Release voluntarily and with full knowledge of its implications.
|
(a)
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Without Cause Termination (Inclusive of Following a CEO Change) and Constructive Discharge Absent a Change of Control
. If Executive's employment terminates during the Period of Employment prior to the occurrence of a Change of Control (as defined below) due to a Without Cause Termination (as defined below) or a Constructive Discharge (as defined below, and inclusive of a CEO change), subject to Executive executing a general release of claims as more fully described in Section 9(f) hereof, then the Company will pay or provide Executive (or Executive's surviving spouse, estate or personal representative, as applicable) the following payments and/or benefits upon such event: (i) Base Salary earned but unpaid as of the effective date of such termination of employment; (ii) a lump sum payment equal to the Severance Pay Amount (as defined below); (iii) the actual incentive amount earned by Executive under any executive annual incentive plan established by the Company for the fiscal year in which Executive's termination occurs, prorated to reflect Executive's partial year of employment, to be paid at the time of completion of respective performance period; (iv) accelerated vesting of all performance shares earned by Executive under any executive long term incentive plan established by the Company for the plan cycle which ends within 12 months after the effective date of termination, to be vested at the time of completion of respective performance period; (v) prorated participation through date of termination in any performance share cycle which ends more than 12 months after the effective date of termination, to be vested at the time of completion of respective performance periods (vi) accelerated vesting of all stock options and restricted stock granted to Executive under any executive long term incentive plan established by the Company but not yet vested on the effective date of termination of employment: (vii).coverage during the Benefits Continuation Period (as defined below) under the following employee benefit plans or provisions for comparable benefits outside such plans, but only to the extent comparable coverage is not provided by any new employer, (x) the Company's Group Health Insurance Program, (y) the LTD Plan (as provided under such plan, Executive shall be required to pay the premium), and (z) the Company's Group Life and Accidental Death and Dismemberment Insurance (at the levels in effect at the date of termination of employment). If coverage under clause (vi) cannot be provided on a tax-advantaged basis under the Company's employee benefit programs, the Company will make a supplemental lump-sum payment to the Executive such that his after-tax cost of coverage will be no greater than the cost for such coverage to a similarly-situated employee under the respective program. Any increase in premium cost resulting from a change in the Executive's coverage election shall be borne by the Executive. In order to receive such continued medical and dental coverage, the Executive must be eligible for and elect continuation coverage under "COBRA" under the terms of the applicable program for the first 18 months of such coverage.
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(b)
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Without Cause Termination and Constructive Discharge Following a Change of Control
. If Executive's employment terminates during the Period of Employment due to a Without Cause Termination or a Constructive Discharge within the twenty-four (24) month period following a Change of Control, then, subject to Executive executing a general release of claims as more fully described in Section 9(f) hereof, in addition to the payments and benefits described in 9(a) hereof, the Company will provide Executive (or Executive's surviving spouse, estate or personal representative, as applicable) the following payments and/or benefits upon such event: (i) the "target incentive amount" under any executive annual incentive plan established by the Company for the fiscal year in which Executive's termination of employment occurs, prorated to reflect Executive's partial year of employment; (ii) accelerated vesting of all "target" restricted performance shares awarded to Executive under any executive long term incentive plan established by the Company outstanding on the date of Change in Control but not yet vested on the date of termination of employment, in cases where the acquiring company is not a publicly traded company or the acquiring company does not assume or replace the outstanding equity; and (iii) accelerated vesting of all other stock options and restricted stock granted to Executive under any executive long term incentive plan established by the Company outstanding on the date of the Change in Control but not yet vested on the effective date of termination of employment, in cases where the acquiring company is not a publicly traded company or the acquiring company does not assume or replace the outstanding equity.
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(c)
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Termination for Cause; Resignation
. If Executive's employment terminates due to a Termination for Cause (as defined below) or a Resignation (as defined below), Base Salary earned but unpaid as of the date of such termination will be paid to Executive in a lump sum and the Company will have no further obligations to Executive hereunder. In the event, any termination of Executive's employment for any reason, Executive if so requested by the Company agrees to assist in the orderly transfer of authority and responsibility to Executive's successor.
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(d)
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Definitions
. For purposes of this Agreement, the following capitalized terms have the following meanings:
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(i)
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"
Benefits Continuation Period
" means that number of months which is equal to the number of months of Base Salary that Executive receives as a lump sum severance payment in accordance with Sections 9(a), or 9(b) hereof.
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(ii)
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"Change of Control"
shall mean an event which shall occur if there is: (i) a change in the ownership of the Corporation; (ii) a change in the effective control of the Corporation; or (iii) a change in the ownership of a substantial portion of the assets of the Corporation.
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(iii)
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"
Constructive Discharge
" means: (A) any material failure by the Company to fulfill its obligations under this Agreement (including, without limitation, any reduction of Base Salary, as the same may be increased during the Period of Employment, or other material element of compensation); (B) a material and adverse change to, or a material reduction of, Executive's duties and responsibilities to the Company; or (C) the relocation of Executive's primary office to any location more than fifty (50) miles from the Company's principal executive offices, resulting in a materially longer commute for Executive. Executive will provide the Company a written notice which describes the circumstances being relied upon for all terminations of employment by Executive resulting from any circumstances claimed to be a Constructive Discharge thirty (30) days after the event giving rise to the notice. The Company will have thirty (30) days after receipt of such notice to remedy the situation prior to Executive's termination of employment due to a Constructive Discharge.
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(iv)
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"
Resignation
" means a termination of Executive's employment by Executive, other than in connection with Executive's Disability pursuant to Section 7 hereof, Death pursuant to Section 8 hereof or Constructive Discharge pursuant to Sections 9(a) or 9(b) hereof. A termination of Executive's employment under this Agreement shall mean the ceasing of employment with the Company. For purposes of this Agreement:
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(A) |
The Executive shall not be treated as having incurred a voluntary termination of employment while on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Executive's right to reemployment with the Company is provided either by statute or by contract. If the period of leave exceeds six months and the right to reemployment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.
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(B) |
Whether the Executive shall have incurred a termination of employment shall be determined based on all relevant facts and circumstances. In situations in which the Executive continues to be carried on the payroll of the Company but performs only nominal services, or ceases to be an employee but continues to provide substantial services in another capacity, such as pursuant to a consulting agreement, the determination of whether a termination of employment has occurred shall be determined in accordance with Final Regulations Section
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(v)
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"
Severance Pay Amount
" means, with respect to a termination of employment covered under Section 9(a) and 9(b), the sum of Executive's then current Base Salary payable during one month, plus one-twelfth of Executive's most recent target annual incentive under any executive annual incentive plan established by the Company, multiplied by twenty-four (24).
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(vi)
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"
Termination for Cause
" means: (A) Executive's refusal or willful and continued failure to substantially perform Executive's material duties to the best of Executive's ability under this Agreement (for reasons other than death or disability), in any such case after written notice thereof; (B) Executive's gross negligence in the performance of Executive's material duties under this Agreement; (C) any act of fraud, misappropriation, material dishonesty, embezzlement, willful misconduct or similar conduct; (D) Executive's conviction of or plea of guilty or nolo contendere to a felony or any crime involving moral turpitude; or (E) Executive's material and willful violation of any of the Company's reasonable rules, regulations, policies, directions and restrictions.
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(vii)
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"
Without Cause Termination
" or "
Terminated Without Cause
" means termination of Executive's employment by the Company other than in connection with Executive's Disability pursuant to Section7 hereof, death pursuant to Section 8 hereof, Constructive Discharge pursuant to Sections 9(a) or 9(b) hereof, or the Company's Termination for Cause of Executive.
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(e)
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Reserved.
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(f) |
Conditions to Payment
. All payments and benefits due to Executive under this Section 9 shall be contingent upon the execution by Executive (or Executive's beneficiary or estate) of a general release of all claims to the maximum extent permitted by law against the Company, its affiliates, and their current and former officers, directors, employees and agents in such form as determined by the Company in its sole discretion
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(g) |
No Other Payments
. Except as provided in this Section 9, Executive shall not be entitled to receive any other payments or benefits from the Company due to the termination of Executive's employment, including but not limited to, any employee benefits under any of the Company's employee benefits plans or arrangements (other than health benefits at Executive's expense under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") or pursuant to the written terms of any qualified 401(k) savings plan or non- qualified deferred compensation plan in which the Company may have in effect from time to time) or any right to severance benefits. Notwithstanding the foregoing sentence, in the event of a termination of employment by Executive under the circumstances described in Section 9(b) hereof following a Change of Control, nothing in this Agreement shall reduce Executive's entitlement, if any, to any payment or benefit pursuant to the LTIP resulting from Executive's termination of employment following a Change of Control.
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(ii) |
Payments of Severance Pay Amounts required to be made under Section 9(a)(ii) shall be made within ten business days following the later of the date the Company receives the release of claims described in Section 9(f) properly executed by the Executive, and the expiration of any period permitted for the Executive to revoke the Agreement after its execution; provided, however, that in no event may Executive return the executed release of claims later than 90 days after termination of employment (or, if earlier, the end of the second month following the later of the end of the Company's taxable year or the Executive's taxable year in which the Executive's termination of employment occurs).
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(iii) |
The reimbursement of an eligible expense hereunder shall be made promptly upon the Executive's submission of request for reimbursement, accompanied by evidence of such expense reasonably acceptable to the Company, but in any event on or before the last day of the Executive's taxable year following the taxable year in which the expense was incurred; provided, however, that the supplemental payment with respect to the tax cost of continuation employee benefit coverage under Section 9(a) shall be paid under Section 9(h)(ii) above.
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(iv) |
The payment of "target incentive amounts" as described in Section 9(b)(i), vesting of "target" performance shares as described in Sections 9(b)(ii), , and vesting of stock options and restricted stock as described in Sections 9(a)(vi), 9(b)(ii) and 9(b)(iii) shall be made as described in Section 9(h)(ii).
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(v) |
The payment of the annual incentive amount under an executive annual incentive plan shall be based upon actual achievement of performance goals and paid in a single sum cash payment within 2½ months after the conclusion of the performance period to which such annual incentive relates. The payment of performance shares as described in Sections 9(a)(iv) and 9(a)(v) shall be based upon actual achievement of performance goals and paid within 2½ months after the conclusion of the performance period to which such performance shares relate.
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(vi) |
Each of the payments and benefits under Section 9(a), or (b) above are designated as separate payments for purposes of the short-term deferral rules under Treasury Regulation Section 1.409A-1(b)(4)(i)(F), the exemption for involuntary terminations under separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii), and the exemption for medical expense reimbursements under Treasury Regulation Section 1.409A-1(b)(9)(v)(B). As a result, (1) any payments that become vested as a result of a qualifying termination that are made on or before the 15th day of the third month following the later of the end of the Company's taxable year or the end of the Executive's taxable year in which occurs the Executive's termination of employment, (2) any additional payments that are made on or before the last day of the second calendar year following the year of the Executive's termination and do not exceed the lesser of two times Base Salary or two times the limit under Code Section 401(a)(17) then in effect, and (3) the payment of medical expenses within the applicable COBRA period, are exempt from the requirements of Code Section 409A. If Executive is designated as a "specified employee" within the meaning of Code Section 409A, to the extent that any deferred compensation payments to be made during the first six month period following Executive's termination of employment exceed such exempt amounts, the payments shall be withheld and the amount of the payments withheld will be paid in a lump sum (with interest at the rate paid on 12- month Treasury bills as of the date of Executive's termination of employment), during the seventh month after Executive's termination. The Company shall identify in writing delivered to the Executive any payments it reasonably determines are subject to delay under this Section 9(h)(vi). In no event, shall the Company have any liability or obligation with respect to taxes for which the Executive may become liable as a result of the application of Code Section 409A.
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