LPL Reaches $12M Settlement With Fired CEO

As previously disclosed, Arnold wasn't entitled to receive severance benefits pursuant to the company's executive severance plan and all of his equity awards under its incentive plans, other than the non-forfeited options, were automatically forfeited upon his termination, LPL noted.

The value of the retained options represents approximately 15% of the aggregate total value of the severance benefits and equity awards that he would have been entitled to receive or retain had he been terminated "without cause" or "for good reason," rather than for "cause." LPL said it calculated that aggregate total value by applying the closing stock price, applying applicable proration of unvested equity awards under the firm's severance plan and assuming vesting at target levels for any performance-based restricted stock units.

The agreement follows the board's exercising its discretion to defer the automatic forfeiture of part of Arnold's vested options to purchase the company's common stock subject to his negotiating and entering into a settlement agreement to benefit LPL and its shareholders, the filing notes.

LPL ended Arnold's employment on Oct. 1 for violating LPL policies tied to "a respectful workplace," and he resigned from the board.