Item 9B. Other Information

3K characters. Original on sec.gov · Markdown

Item 9B. Other Information

On March 24, 2017, our Board of Directors adopted an Executive Change in Control and Severance Plan (the CIC Plan), which provides for the payment of the following severance and other benefits to our executive officers and certain other officers (collectively, the executives) in the event of a termination of employment with Ulta Beauty without “cause” or by the executive for “good reason” (as each is defined in the CIC Plan), in either case (1) following the announcement of a “change in control” (as defined in the CIC Plan) or (2) on or within eighteen months following a change in control:

	•		a lump sum cash payment of a multiple of the sum of the executive’s salary plus bonus (where “salary” is an amount equal to the greater of the executive’s salary (a) on the date of termination or (b) on the consummation of the change in control and where “bonus” is an amount equal to the greater of (a) the executive’s target bonus on the date of termination, (b) executive’s target bonus on the consummation of the change in control or (c) the actual anticipated bonus executive would receive based on performance as of the change in control). The multiplier to be applied varies based on the executive’s position (three times (3x) multiplier for the Chief Executive Officer; two times (2x) multiplier for our other executive officers, including all of our named executive officers; and a one time (1x) multiplier for other selected executives and key employees. The compensation committee of our Board of Directors will designate each year who is eligible to participate in the CIC Plan and his or her multiple level;

	•		accelerated vesting of all outstanding equity awards held by the executives that vest solely based on the passage of time;

	•		accelerated vesting of outstanding performance-based equity held by the executives based on the greater of (a) target performance levels or (b) actual shares that would have been earned for performance through the date of the change in control; and

	•		Company-paid COBRA premium payments for up to eighteen months following the termination date.

The executives’ right to receive the severance payments and benefits described above is subject to his or her delivery and non-revocation of an effective general release of claims in favor of the Company and the executive’s continued compliance with applicable restrictive covenants.

In addition, to the extent that any change in control payment or benefit would be subject to an excise tax imposed in connection with Section 4999 of the Internal Revenue Code, such payments and/or benefits may be subject to a “best net” reduction to the extent necessary so that the executive receives the greater of the (i) net amount of the change in control payments and benefits reduced such that such payments and benefits will not be subject to the excise tax and (ii) net amount of the change in control payments and benefits without such reduction.

The CIC Plan replaces in full and supersedes any other change in control protections provided to the executives, including without limitation, any individual letters or other plans. The foregoing description of the CIC Plan is qualified in its entirety by reference to the full text of the CIC Plan, a copy of which is filed herewith as Exhibit 10.16 and is incorporated herein by reference.

Part III

Previous: Item 9A. Controls and Procedures · Next: Item 10. Directors, Executive Officers and Corporate Governance