Points of Interest:
► Resignation as CEO ¶ 1. McGavick’s resigned as CEO on December 1, 2005, effective December 31, 2005. See Item 5.02 on Form 8-K, dated December 1, 2005 [PDF]. Remaining CEO through December 31st was therefore required under McGavick’s 2005 Agreement and did not justify additional payments.
► Agreement not to compete ¶ 7. McGavick’s existing one year non-compete agreement was extended to three years. This did not justify a major payout given that McGavick’s 2001 Employment Agreement contained a three year non-compete agreement, and Shareholders were told that it was reduced to one year –at McGavick’s suggestion — as a way to decrease his severance payments.
► McGavick was allowed to be called an “employee” for two months after stepping down as CEO, ¶ 2, 3.3(a), requiring Safeco to make to him another multi-million dollar stock award. McGavick was only required to provide “such transitional support to the successor Chief Executive Officer as the Safeco Board of Directors deems appropriate.” It is not clear what services, if any, he provided in those two months.