David Kenny Named Nielsen CEO

Item 5.02     

Departure of Directors or Certain Officers: Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

Base Salary

$1,300,000

Annual Bonus  Target

$1,925,000

Equity Awards  

Make-Whole Restricted Stock Units ("RSUs")

487,505 Company RSUs ("Make Whole RSUs") vesting in three equal annual installments on December 31, 2019, 2020, and 2021, subject to continued employment through the applicable vesting date. 

Performance
Stock Option

Option to purchase 367,031 shares of Company common stock ("Performance Option"), with a seven-year term and an exercise price equal to the closing price of Company common stock on the first day of Mr. Kenny's employment with the Company, vesting ratably on December 3, 2019, 2020 and 2021, subject to (1) continued employment through the applicable vesting date, and (2) the shares of Company common stock having a closing market price of at least $32.24 for at least twenty-one consecutive trading days prior to December 31, 2021 ("PSO Performance Goal").

Cliff Vesting RSUs

54,285 RSUs ("Cliff Vesting RSUs") cliff vesting on December 3, 2021, subject to continued employment through the vesting date. 

Premium Priced Stock Option

Option to purchase 750,000 shares of Company common stock ("Premium Option"), with a seven-year term and a $40 per share exercise price, vesting ratably on December 3, 2019, 2020 and 2021, subject to continued employment through the applicable vesting date.

2019 Long-Term Incentive Awards

Subject to approval by the Compensation Committee of the Board (the "Committee") and Mr. Kenny's continued employment through the applicable grant date, in February, 2019, the Committee will grant to Mr. Kenny:

• a number of performance restricted stock units equal to the quotient obtained by dividing $4,200,000 by the closing price of Company common stock on the date of grant ("2019 PRSUs"); the 2019 PRSUs will be earned based on Nielsen achieving approved cumulative financial performance targets over the three-year period commencing January 1, 2019 provided Mr. Kenny is an active employee on the vesting date; and
  
  
• a number of Nielsen restricted stock units equal to the quotient obtained by dividing $2,800,000 by the closing price of Company common stock on the date of grant ("2019 RSUs"); the 2019 RSUs will vest in 4 equal annual installments commencing on the first anniversary of the grant date provided Mr. Kenny is an active employee on the vesting date.

Equity Award Treatment Upon a Qualifying Termination of Employment

The applicable award agreements will provide that in the event of a termination without Cause or for Good Reason (a "Qualifying Termination"): 

• The Make Whole RSUs will vest in full.
  
  
• For each of the Cliff Vesting RSUs, the Premium Option and the 2019 RSUs, the Applicable Portion of the award will vest and Mr. Kenny will forfeit the remaining unvested portion of the award.  For purposes of this bullet, "Applicable Portion" means a number of RSUs or options (as applicable) equal to (1) the total number of RSUs or options (as applicable) scheduled to vest on the vesting date next following the date of the Qualifying Termination, multiplied by (2) a fraction, the numerator of which is the total number of days from the most recent vesting date preceding the date of the Qualifying Termination (or if there is no such date, the award grant date) through the date of the Qualifying Termination and the denominator of which is the total number of days from the most recent vesting date preceding the date of the Qualifying Termination (or if there is no such date, the award grant date) through the vesting date next following the date of the Qualifying Termination.
  
  
• For the Performance Option:
  
  
  
• If the PSO Performance Goal has been met prior to the date of the Qualifying Termination, the Applicable Portion shall vest and Mr. Kenny will forfeit the remaining unvested portion of the award.
  
  
• If the PSO Performance Goal has not been met prior to the date of the Qualifying Termination, the Applicable Portion will remain outstanding and eligible to vest until the third anniversary of the Performance Option grant date and (1) if it becomes vested, will remain exercisable until December 3, 2025 and thereafter will be forfeited, and (2) if it does not vest prior to the third anniversary of the Performance Option grant date, will be forfeited.
  
  
• For purposes of this bullet, "Applicable Portion" means:
  
  
  
• If the PSO Performance Goal has been met prior to the date of the Qualifying Termination, a number of shares equal to (1) the total number of shares scheduled to vest on the vesting date next following the date of the Qualifying Termination, multiplied by (2) a fraction, the numerator of which is the total number of days from the most recent vesting date preceding the date of the Qualifying Termination (or if there is no such date, the award grant date) through the date of the Qualifying Termination and the denominator of which is the total number of days from the most recent vesting date preceding the date of the Qualifying Termination (or if there is no such date, the award grant date) through the vesting date next following the date of the Qualifying Termination.
  
  
• If the Performance Goal has not been met prior to the date of the Qualifying Termination, a number of shares equal to (1) the total number shares scheduled to vest on the  vesting date next following the date of the Qualifying Termination and on any vesting date prior thereto multiplied by (2) a fraction, the numerator of which is the total number of days from the option grant date through the date of the Qualifying Termination and the denominator of which is the total number of days from the option grant date through the vesting date next following the date of the Qualifying Termination.
  
  
• The 2019 PRSUs will pay out on the normally scheduled payout date based on the final performance assessment approved by the Board, pro-rated to reflect Mr. Kenny's length of service in the performance period.

Equity Award Treatment Upon a Change in Control

In the event of a change in control of the Company, treatment of Mr. Kenny's Company equity awards will be governed by Section 10 of the Amended and Restated Nielsen 2010 Stock Incentive Plan.

Make Whole Cash Retention Award

$2,500,000 payable in February, 2019 to compensate Mr. Kenny for the loss of a cash retention award from IBM, subject to continued employment through the applicable payment date. 

Make Whole Annual Incentive Payment

$1,500,000 payable promptly following Mr. Kenny's start date to compensate Mr. Kenny for the loss of the 2018 annual incentive payout from IBM. If Mr. Kenny resigns voluntarily without Good Reason or is terminated for Cause within one year of receiving the payment, Mr. Kenny must repay the amount in full.

Severance Policy for Section 16 Officers ("Severance Policy")

Mr. Kenny will participate in the Nielsen Holdings plc Severance Policy for Section 16 Officers and United-States-Based Senior Executives.  Under the Severance Policy, upon a termination of employment without Cause or for Good Reason, and subject to execution of a separation agreement including customary restrictive covenants and a release of claims, Mr. Kenny is entitled to:        

• cash severance equal to two times the sum of his (1) annual base salary and (2) the average of the annual incentive payments paid to him in the three years preceding the year in which his employment termination occurs;
  
• a bonus in respect of the year in which the employment termination occurs for the portion of the year that he is employed by the Company, based on actual performance, and payable at the same time that the Company pays bonuses to other executives of the Company; and
  
• reimbursement during the twenty-four months following his employment termination for the portion of COBRA premiums in excess of the amounts that he paid while employed by the Company; and
  
• outplacement assistance and support services for one year.

Definitions of Cause and Good Reason

For purposes of the Letter Agreement and Mr. Kenny's rights upon a Qualifying Termination, Good Reason and Cause shall have the meanings ascribed to such terms in the Severance Policy, except that Good Reason shall also include the following items:

• A reduction in Annual Incentive Target, other than as a result of a general reduction applicable to all named executive officers;
  
  
• The Company's failure to nominate Mr. Kenny for election or re-election to the Board, other than as a result of Mr. Kenny's prior termination of employment due to death or disability, for Cause or voluntarily without Good Reason; and
  
  
• A requirement that Mr. Kenny move his primary residence from Massachusetts.