Blockbuster Inc. said Friday that CFO Larry J. Zine will leave at the end of the year, and simultaneously released details of amendments to his employment contract, including a retention bonus and other payments that would guarantee him a $1.4 million payout regardless of whether he stays until December 31 or is fired before that time.
The company is currently searching for a replacement for CEO John Antioco, who is also scheduled to depart on December 31. Antioco announced in March that he would leave the company by year-end after an unusually public multiyear feud with Carl Icahn, who is both a Blockbuster director and the company’s largest shareholder.
Zine was unavailable for comment. Company spokesman Randy Hargrove told CFO.com the company has not made any announcements regarding a replacement for Zine or the initiation of a search. “The board is currently focusing on its ongoing CEO search,” Hargrove told CFO.com. “That’s why the company is pleased to have Larry’s continued service and leadership during this transitional phase.”
Earlier in the week, Zine, who has been with the company since November 1999, signed an amendment to his employment contract that provides him with a $200,000 retention bonus in addition to his salary and 2007 bonus (both prorated if he leaves before year-end). An earlier amendment, signed in 2006, gives him a lump-sum payment of nearly $1.2 million, which the new amendment specifies will be paid to him on the date of his termination. Zine will receive these payments regardless of whether he stays through December 31 or resigns or is fired earlier, as long as he is not fired for cause. In addition, if Zine is fired without cause before December 31, he will also be entitled to the immediate vesting of his restricted shares, which are scheduled to vest on December 20, 2007.
“Larry’s intention was to retire prior to now, and the board was aware of that,” said Hargrove. “The retention amendment is a way of getting Larry to stay.” Hargrove said Zine and his wife plan to relocate to Santa Fe, New Mexico, and that Zine was “looking forward to living there full-time with his wife and working on his golf game.” Blockbuster’s corporate headquarters are in Dallas.
The company, whose stock has plummeted from a high of nearly $30 five years ago to a recent $4 or so, is locked in a battle with Netflix Inc., which pioneered rental service via the mail. In April 2005, Zine appeared on the cover of CFO magazine for a story called “The Turning Point,” which looked at industries, such as the video-rental industry, whose business model was being rendered obsolete by new technologies or competitive threats.