Hewlett-Packard will shell out more than $12 million to part ways with scandal-scarred former Chairman, CEO and President Mark Hurd, according to a filing with the U.S. Securities and Exchange Commission on Friday.
HP Friday disclosed that Hurd has resigned, effective immediately, following an investigation into claims of sexual harassment against Hurd and the company. While the investigation found that Hurd did not violate HP's sexual harassment policy, he was found to have violated HP's Standards of Business Conduct, according to an HP statement.
According to an 8-K report with the SEC, the Palo Alto, Calif.-based computer giant has signed a “separation agreement” with Hurd, which includes the massive payout in addition to an extension of stock options, pro-rata vesting of earlier performance-based restricted stock, a year-and-a-half of health insurance and other “customary” benefits for ex-HP executives, the company said in the filing.
According to HP, Hurd will get, in exchange for signing a “general release of claims” against HP:
* A severance payment of $12.2 million
* An extension to Sept. 7 of the expiration of outstanding options to buy 775,000 shares of HP common stock that were vested as of today
* Pro-rata vesting, on what HP says is “the same terms as other HP employees,” of 330,177 performance-restricted stock units that HP gave Hurd in 2008 based on the company’s actual performance during a three-year period
* Eligibility to receive HP’s continued group medical and dental coverage for up to 18 months.
The deal also contains boilerplate language on confidentiality and other restrictions, according to the filing. The agreement, dated and signed on August 6, also holds that Hurd will be paid for any accrued salary and accrued or unused vacation time.
In addition to the general release of claims, Hurd agreed to continue to cooperate with HP in any continuing or future investigations -- though no specifics of any investigation were referenced in the separation agreement.
Shares of HP stock, on which the value of much of Hurd’s overall severance package relies, were trading at $41.60 in after-hours trading on Wall Street.