JD Sports Fashion PLC (LSE:JD.) said it brokered an agreement with ousted chairman Peter Cowgill over his departure from the sportswear group.
Under the deal, Cowgill has been paid his salary and contractual benefits up until 25 May and will be eligible for any appropriate annual bonus, subject to usual performance conditions for the rest of his full-time employment.
For the period post 25 May, the company will honour his contractual notice period of 12 months, according to a statement.
Under the deal, JD Sports said it secured two further agreements with Cowgill, which the group said were in the best interest of shareholders.
First is a set of new and enhanced restrictive conditions for a two-year period, replacing limited provisions in the previous 18-year-old contract.
These prevent him from working for or advising any of its competitors and prohibits Cowgill from soliciting any of the employees. He will receive £3.5mln over two years for the restrictions.
Secondly, they agreed a three-year consultancy deal under which he will be paid £2mln phased over the life of the agreement.
It ensures both new chairman Andy Higginson and new chief executive Régis Schultz will receive Cowgill’s continued support as they transition in their roles and gain access to his knowledge and experience in building JD further.
"I am pleased that we have been able to reach this amicable and constructive way forward with Peter covering the next three years," Andy Higginson said.
“Peter has hugely valuable experience built over 18 years which we do not want to lose and both Régis and I are delighted to be able to benefit from his considerable talent and advice.
“This caps off what, by any measure, has been a remarkable period of executive leadership by Peter who has been such a core part of the business's incredible success story to date.
“We are pleased to have settled the terms of his departure and more importantly, to have secured a seamless handover and access to his decades of experience, whilst best protecting our commercial interests.”