Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement: (i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs. (ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement. (iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below: (a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due; (b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs; (c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”); (d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company; (e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company; (f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and (g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse. (iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.
Appears in 1 contract
Sources: Change of Control Agreement (Precision Castparts Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) A. During any period that you fail to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you shall continue to receive your full base salary at the rate then in effect at the commencement of any such periodand all compensation, together with all compensation payable to you including under the Company's disability plan or program or other similar plan KEPP, paid during such period, the period until this Agreement your employment is terminated termina▇▇▇ pursuant to Section 3(ii) 3.A hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under in accordance with the Company's retirement, insurance and other compensation programs then in effect of the Company or subsidiary corporation by which you are employed, and any qualified retirement plan and any executive supplemental retirement plan in accordance with effect immediately prior to the terms of such programschange in control.
(ii) B. If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you only your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) C. If your employment by the Company should shall be terminated by the Company or any subsidiary corporation by which you are employed other than for Cause or Disability Disability, or if by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(a1) the The Company shall pay to you you, not later than the fifth day following the Date of Termination, your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given without regard to any reduction in base salary that would constitute Good Reason, plus all other amounts to which you are entitled under any compensation plan of the Company, Company at the time such payments are due;
(b2) in lieu of any further salary payments The Company shall pay to you for periods subsequent to you, not later than the fifth day following the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to (a) three (3) times the sum of (1) the greater of (i) your annual rate of base salary at the rate in effect on at the time Notice of Termination is given without regard to any reduction in base salary that would constitute Good Reason, plus (ii) your target bonus payout under the Company's Key Executive Performance Plan for Executive Officers (the "KEPP") (or any substitute plan) for the year in which occurs ▇▇▇ Date of Termination or change in control, whichever is greater, less (iib) the dollar amount, if any, which you are paid upon termination of employment, without regard to the provisions of this Agreement, under the Company's Severance Pay Policy for Executive Officers as in effect immediately prior to the Date of Termination;
(3) The Company shall pay to you, not later than the fifth day following the Date of Termination, a lump sum amount equal to the greater of the value of your annual rate of base salary unused and accrued vacation entitlement in accordance with the Company's Vacation Policy as in effect immediately prior to the change in control or as in effect on Date of Termination;
(4) The Company shall pay to you, not later than the Company fifth day following the Date of Termination, a lump sum amount equal to the sum of (a) any unpaid bonus (excluding deferred awards, plus interest, credited to your account, which shall be payable under the KEPP in accordance with its terms) pursuant to the KEPP (or a▇▇ ▇ubstitute plan) allocable to you in respect of ▇▇▇ Plan year preceding that in which the Date of Termination occurs, and (2b) a KEPP award (or award under a substitute plan) for the year in ▇▇▇ch the Date of Termination occurs, equal to the greater of (i) your target bonus payout under such plan (determined without regard to any reduction in your base salary constituting Good Reason), prorated through the average of the last three (3) annual bonuses (annualized month in the case of any bonus paid with respect to a partial year) paid to you preceding which the Date of Termination occurs, or (ii) your target bonus the actual KEPP award (or award under such substitute plan) as determine▇ ▇▇ actual year-to-date earnings per share through the Company's executive performance compensation plans last day of the month prior to the month in which the Date of Termination occurs in accordance with the KEPP award criteria (or criteria under such substitute plan) ▇▇ ▇hich you participate for are participating as of the year Date of Termination, prorated through the month in which such change in control the Date of Termination occurs;
(c5) All stock options granted under the Key Executive Stock Option Plan held by you shall become immediately exercisable;
(6) The Company shall continue to pay such amounts as may be required to maintain any insurance you may have had in force pursuant to the Company's Split Dollar Life Insurance Plan until the later of your sixty-fifth birthday or ten years after the insurance policy is issued, after which the Company will release to you its interest in each such policy; and
(7) The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement Agreement).
D. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then for a twelve-month period following such termination, the Company shall maintain, in full force and effect for your continued benefit, either (a) all life, disability, accident and health insurance plans or arrangements, and financial counseling services in which you may have been participating immediately prior to the change in control or (b) at your election, such plans or arrangements in which you were participating immediately prior to the Date of Termination, provided your continued participation (or a particular type of coverage) is possible under the general terms and provisions of such plans and arrangements. In the event your participation (or a particular type of coverage) under any such fees plan or expenses incurred in connection with any such claim which arrangement is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such terminationbarred, the Company shall arrange to provide you with lifebenefits, accident and health insurance benefits at substantially the same cost to you, which are substantially similar to those which you were receiving immediately prior are entitled to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments receive under this paragraph (d) shall be treated as a right to a series of separate paymentssuch plans and arrangements. Notwithstanding the foregoing, the Company shall continue to pay such amounts as may be required to maintain any insurance you may have had in force pursuant to the Split- Dollar Plan until the later of your sixty-fifth birthday or ten years after the insurance policy is issued, after which the Company will release to you its interest in each such policy.
E. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then in addition to the aggregate retirement benefits to which you are entitled under the Company's Qualified Plan, the Company's Excess Benefit Plans, any other nonqualified pension agreement or arrangement, or any successor plans thereto, the Company shall pay you amounts equal to (a), (b), (c), or (d), whichever is applicable:
(a) If you have satisfied the service, but not provide the age, requirements of the Early Retirement Plan, as in effect immediately prior to the change in control, you shall receive a monthly benefit, commencing on your fifty-fifth birthday equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the change in control, had you satisfied the age and service requirements as of the Date of Termination; or
(b) If you have satisfied the age, but not the service, requirement of the Early Retirement Plan, as in effect immediately prior to the change in control, you shall receive a monthly benefit, commencing as of the Date of Termination equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the change in control, had you satisfied the age and service requirements as of the Date of Termination; or
(c) If you have satisfied neither the age nor the service requirements of the Early Retirement Plan, as in effect immediately prior to the change in control, you shall receive a monthly benefit, commencing on your fifty-fifth birthday equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the change in control, had you satisfied the age and service requirements as of the Date of Termination; or
(d) If you have satisfied both the age and the service requirements of the Early Retirement Plan, as in effect immediately before the change in control, you shall receive the benefits to which you are entitled under the Early Retirement Plan. The benefits under this Paragraph E shall be paid in the same manner as, and shall otherwise possess the same rights and privileges as were available with respect to, benefits under the terms of the Early Retirement Plan as in effect immediately prior to the change in control.
F. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 (except as otherwise provided in the immediately succeeding sentence) be reduced by any compensation earned by you as the result of employment by another employer or by retirement benefits after the Date of Termination, or otherwise. Benefits otherwise receivable by you pursuant to this paragraph (d) Section 4.D shall be reduced to the extent that a similar benefit is comparable benefits are actually received by you from a subsequent employer during such thirtythe twelve-six (36) month periodperiod following your termination, and any such benefit benefits actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.
Appears in 1 contract
Sources: Change in Control Agreement (Boise Cascade Office Products Corp)
Compensation Upon Termination or During Disability. Following a change in control Control of the Company, as defined by Section 2, upon termination of your employment or during a period of disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's long-term disability plan or insurance program or other similar [plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programsCompany's insurance and retirement programs then in effect.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) if your employment shall be terminated by you for Retirement, or by reason of your death, your benefits shall be determined in accordance with the Company's retirement and insurance programs then in effect.
(iv) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Disability or if (b) by you should terminate your employment for Good ReasonReason or Retirement, then you shall be entitled to the benefits provided below:
(aA) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are duedue except as otherwise provided below;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d)C, (e) D, and (f) E below, the “"Severance Payments”Payment") equal to three (3) times the sum 300% of (1) the greater of (i,) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater 300% of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you for the three full fiscal years preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;termination.
(cC) If any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code, (or any similar tax that may hereafter be imposed) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (vD), below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and Excise Tax upon the payment provided for by this subsection, shall be equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Total Severance Payments, if . For purposes of determining whether any of the Severance Payments or will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payment payments or benefit benefits received or to be received by you in connection with a change in control of the Company or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person -6- affiliated with the Company or such person) (collectively which together with the Severance Payments, “constitute the "Total Payments”") would shall be treated as "parachute payments" within the meaning of section 28OG(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 28OG(b)(1) shall be treated as subject to the tax (the “Excise Tax”, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to you such other payments or benefits (in whole or in part) imposed by do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 4999 28OG(b)(4) of the Code in excess of the base amount within the meaning of section 28OG(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that b) the amount of the Total Payments, Payments which shall be treated as so reduced, is subject to the Excise Tax shall be equal to the Capped Payment Amount lesser of (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid 1) the full total amount of the Total Payments. The “Capped Payment Amount” shall equal Payments of (2) the amount of excess parachute payments within the Total Payments, reduced by the minimum amount necessary to prevent any portion meaning of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv28OG(b)(1) (including application after applying clause (q) above, and interpretation of the Code and related regulatory, administrative and judicial authorities, (c) the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (dprinciples of section 28OG(d)(3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess or shortfall is finally determined.
(D) The payment provided for in paragraph (B), above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amounts of such -7- payments, and the limitation on such payments set forth in paragraph (C), above, cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under section 280G(d)(4provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(E) The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce early right or benefit provided by this Agreement).
(v) If your employment shall be terminated (a) by the Company other than for Cause, Retirement or Disability or (b) by you for Good Reason, then for a twenty-four (24) month period after such termination, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those which you are receiving immediately prior to the Notice of Termination.
(vi) You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owing by you to the Company, or otherwise.
(vii) In addition to all other amounts payable to you under this Section 4, you shall be entitled to receive all benefits payable to you under the Company's retirement programs.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disabilitydescribed below upon becoming Disabled, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement. The benefits to which you are entitled, subject to the terms and conditions of this Agreement, are:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illnessUpon becoming Disabled, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's Corporation’s disability plan or program or other similar plan during such period, until this Agreement your employment is terminated by the Corporation pursuant to Section 3(ii) hereofhereof or by you. Thereafter, or in the event your employment shall be is terminated by reason of your death, your benefits shall be determined under the Company's Corporation’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company Corporation for Cause or by you other than for Good Reason, the Company Corporation shall pay you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company Corporation at the time such payments are due, and the Company Corporation shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should Corporation shall be terminated by you for Good Reason or by the Company Corporation other than for Cause or Disability or if you should terminate your employment for Good Reason(including Extended Disability), then you shall be entitled to the benefits provided below:
(a) the Company Corporation shall pay to you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given given, at the time specified in Section 4(iv), plus all other amounts to which you are entitled under any compensation plan of the Company, Corporation at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company Corporation shall pay as severance pay to you, at the time specified in Subsection (vSection 4(iv), a lump sum severance payment (together with the payments provided in paragraphs (d), (eSections 4(iii)(c) and (fd) below, the “Severance Payments”) equal to three (3) times the sum 200% of (1) the greater of (i) your annual rate of base salary as in effect on as of the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change Change in control Control, whichever is greater and without regard to whether you have been employed by the Corporation or any of its subsidiaries for at least 12 consecutive months, and 200% of the Company average of the annual bonuses awarded to you pursuant to the Corporation’s bonus plan(s) for executive officers, or any successor bonus plan(s) thereto, with respect to the three fiscal years preceding the Date of Termination; provided that if you shall not have been continuously employed by the Corporation or any of its subsidiaries for the preceding three full fiscal years, such average annual bonuses shall be determined based on the aggregate of all bonuses paid to you with respect to any of such three fiscal years and the actual period of your employment through the end of the preceding fiscal year (2stated in years, including a fraction thereof); and provided further that if no bonuses shall have been paid to you with respect to the preceding fiscal year, such bonuses (for purposes of computing both the average annual bonuses and the aggregate amount of Severance Payments) shall be the greater of (ix) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid award to you preceding for such fiscal year, if any, theretofore approved by the Date Corporation’s Board of Termination Directors or a duly constituted committee thereof, (iiy) your target bonus under for such fiscal year, stated as a percentage of your base annual salary, theretofore approved by the Company's executive performance compensation plans Corporation’s Board of Directors or a duly constituted committee thereof, or (z) your current annual salary multiplied by the highest percentage that your bonuses represented in which you participate for relation to your base annual salary with respect to either of the year in which such change in control occurs;first two of the three preceding fiscal years.
(c) the Company Corporation shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any as set forth in Section 10 of this Agreement)); and
(d) for a twenty-four (24) month period after such fees or expenses incurred in connection termination, the Corporation shall arrange to provide you with any such claim which is determined life, disability, accident and group health insurance benefits substantially similar to those that you were receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by you pursuant to this Section 4(iii)(d) shall be frivolous) or in connection with any tax audit or proceeding reduced to the extent attributable comparable benefits are actually received by you during the twenty-four (24) month period following your termination, and any such benefits actually received by you shall be reported to the application Corporation.
(iv) The payments provided for in Section 4(iii)(a) shall commence not later than the fifth day following the Date of Termination. The payments provided for in Sections 4(iii)(b) shall be made on the date which is six months plus two days following the Date of Termination together with interest calculated from the Date of Termination through the payment EXECUTIVE -7- DATE date at the rate provided in section 4999 1274(d)(1)(C) of the Internal Revenue Code of 1986, as amended (the “Code”);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company You shall not provide be required to mitigate the amount of any benefit payment provided for in this Section 4 by seeking other employment or otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month periodand, and any such benefit actually received by you shall be reported to the Company;
(e) except as provided in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”Section 4(iii)(d), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent amount of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received provided for in this Section 4 shall not be reduced by any compensation earned by you as the result of employment by another employer or self-employment, by retirement benefits, by offset against any amount claimed to be received owed by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement Corporation, or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeotherwise.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you The Employee shall be entitled to the following benefits during a period of disability, or upon termination of your her employment, as the case may be, provided that such period or termination occurs during the term Term of this Agreement:
(ia) During any period that you fail the Employee fails to perform your her full-time duties with the Company as a result of incapacity due to physical or mental illness, you she shall continue to receive your her base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you her under the Company's disability plan or program or other similar plan during such period, until this Agreement her employment is terminated pursuant to Section 3(ii) 11 hereof. Thereafter, or in the event your the Employee's employment shall be terminated by reason of your her death, your her benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iib) If your at any time the Employee's employment shall be terminated terminated: (i) by the Company for Cause or Disability or (ii) by you her for any reason (other than in a Voluntary Termination or for Good ReasonReason following the occurrence of a Change in Control), the Company shall pay you your the Employee her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are she is entitled through the Date of Termination under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you her under this Agreement.
(iiic) If your the Employee's employment by the Company should be terminated terminated: (1) by reason of her death, (2) by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason(3) by the Employee in a Voluntary Termination, you she shall be entitled to the benefits provided below:
(ai) the Company shall pay to you your the Employee or the appropriate payee (as determined in accordance with Section 13(c)) (A) her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given; plus (B)(x) in the case of death or a Voluntary Termination all salary and bonus payments that would have been payable to the Employee pursuant to this Agreement for the remaining Term of this Agreement, or (y) in all other amounts cases, all salary and bonus payments that would have been payable to which you are entitled under any compensation plan the Employee had the Employee continued to be employed for a period of 12 months, assuming for the Company, at the time purpose of such payments are due;
(b) in lieu of any further that her salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) such remaining period is equal to three (3) times the sum of (1) the greater of (i) your annual rate of base her salary in effect on at the Date of Termination or (ii) your and that her annual rate bonus for such remaining Term is equal to the average of base salary in effect the annual bonuses paid to her by the Company with respect to the three fiscal years ended immediately prior to the change fiscal year in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding which the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control termination occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.plus
Appears in 1 contract
Sources: Employment Agreement (Ihop Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) A. During any period that you fail to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you shall continue to receive your full base salary at the rate then in effect at the commencement of any such periodand all compensation, together with all compensation payable to you including under the Company's disability plan or program or other similar plan KEPP, ▇▇id during such period, the period until this Agreement your employment is terminated pursuant to Section 3(ii) 3.A hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under in accordance with the Company's retirement, insurance and other compensation programs then in effect of the Company or subsidiary corporation by which you are employed, and any qualified retirement plan and any executive supplemental retirement plan in accordance with effect immediately prior to the terms of such programsChange in Control.
(ii) B. If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you only your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) C. If your employment by the Company should shall be terminated by the Company other than for Cause or Disability Disability, or if by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(a1) the The Company shall pay to you you, not later than the fifth day following the Date of Termination, your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, Company at the time such payments are due;
(b2) in lieu of any further salary payments The Company shall pay to you for periods subsequent to you, not later than the fifth day following the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to (a) three (3) times the sum of (1i) your annual base salary, plus (ii) your target bonus payout under the Company's Key Executive Performance Plan for Executive Officers (the "KEPP") (or any substitute plan) for the year in which occurs the Date of Termination or Change in Control, whichever is greater, less (b) the dollar amount, if any, which you are paid upon termination of employment, without regard to the provisions of this Agreement, under the Company's Severance Pay Policy for Executive Officers as in effect immediately prior to the Date of Termination;
(3) The Company shall pay to you, not later than the fifth day following the Date of Termination, a lump sum amount equal to the greater of the value of your unused and accrued vacation entitlement in accordance with the Company's Vacation Policy as in effect immediately prior to the Change in Control or as in effect on Date of Termination;
(4) The Company shall pay to you, not later than the fifth day following the Date of Termination, a lump sum amount equal to the sum of (a) any unpaid bonus (excluding deferred awards, plus interest, credited to your account, which shall be payable under the KEPP ▇▇ accordance with its terms) pursuant to the KEPP (▇▇ any substitute plan) allocable to you in respect of the Plan year preceding that in which the Date of Termination occurs, and (b) a KEPP ▇▇▇rd (or award under a substitute plan) for the year in which the Date of Termination occurs, equal to the greater of (i) your annual rate of target bonus payout under such plan (determined without regard to any reduction in your base salary constituting Good Reason), prorated through the month in effect on which the Date of Termination occurs, or (ii) your annual rate the actual KEPP ▇▇▇rd (or award under such substitute plan) as determined by actual year-to-date earnings per share through the last day of base salary in effect immediately the month prior to the change month in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding which the Date of Termination occurs in accordance with the KEPP ▇▇▇rd criteria (or (iicriteria under such substitute plan) your target bonus under the Company's executive performance compensation plans in which you participate for are participating as of the year Date of Termination, prorated through the month in which such change in control the Date of Termination occurs;
(c5) All stock options granted under the Key Executive Stock Option Plan held by you shall become immediately exercisable; and
(6) The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement Agreement).
D. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then for a twelve-month period following such termination, the Company shall maintain, in full force and effect for your continued benefit, all life, disability, accident and health insurance plans or arrangements, and financial counseling services in which you may have been participating immediately prior to the Change in Control, provided your continued participation (or a particular type of coverage) is possible under the general terms and provisions of such plans and arrangements. In the event your participation (or a particular type of coverage) under any such fees plan or expenses incurred in connection with any such claim which arrangement is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such terminationbarred, the Company shall arrange to provide you with lifebenefits, accident and health insurance benefits at substantially the same cost to you, which are substantially similar to those which you were receiving immediately prior are entitled to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments receive under this paragraph (d) shall be treated as a right to a series of separate paymentssuch plans and arrangements. Notwithstanding the foregoing, the Company shall continue to pay such amounts as may be required to maintain any insurance you may have had in force pursuant to the Split-Dollar Plan until the later of your sixty-fifth birthday or ten years after the insurance policy is issued, after which the Company will release to you its interest in each such policy.
E. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then in addition to the aggregate retirement benefits to which you are entitled under the Company's Qualified Plan, the Company's Excess Benefit Plans, any other nonqualified pension agreement or arrangement, or any successor plans thereto, the Company shall pay you amounts equal to (a), (b), (c), or (d), whichever is applicable:
(a) If you have satisfied the service, but not provide the age, requirements of the Early Retirement Plan, as in effect immediately prior to the Change in Control, you shall receive a monthly benefit, commencing on your fifty-fifth birthday equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the Change in Control, had you satisfied the age and service requirements as of the Date of Termination; or
(b) If you have satisfied the age, but not the service requirement of the Early Retirement Plan, as in effect immediately prior to the Change in Control, you shall receive a monthly benefit, commencing as of the Date of Termination equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the Change in Control, had you satisfied the age and service requirements as of the Date of Termination; or
(c) If you have satisfied neither the age nor the service requirements of the Early Retirement Plan, as in effect immediately prior to the Change in Control, you shall receive a monthly benefit, commencing on your fifty-fifth birthday equal to the benefit to which you would have been entitled under the Early Retirement Plan, as in effect immediately prior to the Change in Control, had you satisfied the age and service requirements as of the Date of Termination; or
(d) If you have satisfied both the age and the service requirements of the Early Retirement Plan, as in effect immediately before the Change in Control, you shall receive the benefits to which you are entitled under the Early Retirement Plan. The benefits under this Paragraph E shall be paid in the same manner as, and shall otherwise possess the same rights and privileges as were available with respect to, benefits under the terms of the Early Retirement Plan as in effect immediately prior to the Change in Control.
F. If your employment shall be terminated (1) by the Company or subsidiary corporation by which you are employed other than for Cause or Disability or (2) by you for Good Reason, then you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 (except as otherwise provided in the immediately succeeding sentence) be reduced by any compensation earned by you as the result of employment by another employer or by retirement benefits after the Date of Termination, or otherwise. Benefits otherwise receivable by you pursuant to this paragraph (d) Section 4.D shall be reduced to the extent that a similar benefit is comparable benefits are actually received by you from a subsequent employer during such thirtythe twelve-six (36) month periodperiod following your termination, and any such benefit benefits actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.
Appears in 1 contract
Sources: Executive Officer Severance Agreement (Boise Cascade Office Products Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you The Employee shall be entitled to the following benefits during a period of disability, or upon termination of your his employment, as the case may be, provided that such period or termination occurs during the term Term of this Agreement:
(ia) During any period that you fail the Employee fails to perform your his full-time duties with the Company as a result of incapacity due to physical or mental illness, you he shall continue to receive your his base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you him under the Company's disability plan or program or other similar plan during such period, until this Agreement his employment is terminated pursuant to Section 3(ii) 11 hereof. Thereafter, or in the event your the Employee's employment shall be terminated by reason of your his death, your his benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iib) If your at any time the Employee's employment shall be terminated terminated: (i) by the Company for Cause or Disability or (ii) by you him for any reason (other than in a Voluntary Termination or for Good ReasonReason following the occurrence of a Change in Control), the Company shall pay you your the Employee his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are he is entitled through the Date of Termination under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you him under this Agreement.
(iiic) If your the Employee's employment by the Company should be terminated terminated: (1) by reason of his death, (2) by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason(3) by the Employee in a Voluntary Termination, you he shall be entitled to the benefits provided below:
(ai) the Company shall pay to you your the Employee or the appropriate payee (as determined in accordance with Section 13(c)) (A) his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given; plus (B)(x) in the case of death or a Voluntary Termination all salary and bonus payments that would have been payable to the Employee pursuant to this Agreement for the remaining Term of this Agreement, or (y) in all other cases, all salary and bonus payments that would have been payable to the Employee had the Employee continued to be employed for a period of 12 months, assuming for the purpose of such payments that his salary for such remaining period is equal to his salary at the Date of Termination and that his annual bonus for such remaining Term is equal to the average of the annual bonuses paid to him by the Company with respect to the three fiscal years ended immediately prior to the fiscal year in which the Date of termination occurs; plus (C) all other amounts to which you are he is entitled under any compensation plan of the Company, at in cash in a lump sum no later than the time such payments are due15th day following the Date of Termination;
(bii) in lieu of any further salary payments to you for periods subsequent to a 12-month period after the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you the Employee with life, disability, accident and health insurance benefits substantially similar to those which you were the Employee and his covered family members are receiving immediately prior to the change Notice of Termination (without giving effect to any reduction in control such benefits subsequent to a Change in Control); provided, however, that such continued benefits shall be reduced to the extent comparable benefits are actually received by or made available to the Employee without cost during the 12-month period following the Employee's termination of employment (and the Employee agrees that he shall promptly report any such benefits actually received to the Company); and
(iii) the Company shall continue in effect for the benefit of the Company. For purposes Employee all insurance or other provisions for indemnification and defense of section 409A officers or directors of the CodeCompany which are in effect on the date the Notice of Termination is sent to the Employee with respect to all of his acts and omissions while an officer or director as fully and completely as if such termination had not occurred, and until the right final expiration or running of all periods of limitation against actions which may be applicable to a series of monthly installment payments under this paragraph such acts or omissions.
(d) If the Employee's employment should be terminated by the Employee for Good Reason following a Change in Control, he shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) entitled to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;benefits provided below:
(ei) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you to the Employee or the appropriate payee (as determined in accordance with Section 13(c)) (A) his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given; plus (B)(x) in the case of death or a lump sumVoluntary Termination all salary and bonus payments that would have been payable to the Employee pursuant to this Agreement for the remaining Term of this Agreement, or (y) in cashall other cases, all salary and bonus payments that would have been payable to the Employee had the Employee continued to be employed for a period of 24 months, assuming for the purpose of such payments that his salary for such remaining period is equal to his salary at the Date of Termination and that his annual bonus for such remaining Term is equal to the actuarial equivalent average of a straight life annuity equal the annual bonuses paid to him by the Company with respect to the excess three fiscal years ended immediately prior to the fiscal year in which the Date of termination occurs; plus (iC) the retirement pension (commencing at age 65) all other amounts to which you would have accrued he is entitled under the terms any compensation plan of the Plans (without regard to Company, in cash in a lump sum no later than the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to 15th day following the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over ;
(ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year for a 24-month period after the Date of Termination, the Company will pay youshall arrange to provide the Employee with life, at disability, accident and health insurance benefits substantially similar to those which the time specified in Subsection (v), an amount equal Employee and his covered family members are receiving immediately prior to the expenses incurred by you Notice of Termination (without giving effect to any reduction in connection with such relocation (including expenses incurred benefits subsequent to a Change in selling your home Control); provided, however, that such continued benefits shall be reduced to the extent such expenses were customarily reimbursed comparable benefits are actually received by the Company to transferred Employees prior or made available to the change in control Employee without cost during the 24-month period following the Employee's termination of employment (and the Employee agrees that he shall promptly report any such benefits actually received to the Company) and which are not reimbursed by another employer); and
(giii) the Company shall continue in effect for the benefit of the Employee all options insurance or other provisions for indemnification and stock appreciation rights to purchase defense of officers or acquire shares of Common Stock directors of the Company held by you immediately prior which are in effect on the date the Notice of Termination is sent to the Date Employee with respect to all of Termination shall become exercisable in full, whether his acts and omissions while an officer or director as fully and completely as if such termination had not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were grantedoccurred, and until the final expiration or running of all restrictions on any restricted stock held by you shall lapseperiods of limitation against actions which may be applicable to such acts or omissions.
(ive) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other provisions of this Agreement, in the event that any payment or benefit received or to be received by you the Employee in connection with a change in control of the Company or the termination of your the Employee's employment (whether such benefit is pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions and all such payments and benefits being hereinafter called "Total Payments") would not be deductible (in whole or part), by the Company as a result in a change in control of the Company or any person affiliated with application of Section 280G of the Company or such person) Internal Revenue Code of 1986, as amended (collectively with the Severance Payments"Code"), “Total Payments”) would be subject then, to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount extent necessary to prevent any make the nondeductible portion of the Total Payments from deductible, (i) the cash payments under this Agreement shall first be reduced (if necessary, to zero), and (ii) all other non-cash payments under this Agreement shall next be reduced (if necessary, to zero).
(f) If it is established as described in the preceding subsection (d) that the aggregate benefits paid to or for the Employee's benefit are in an amount that would result in any portion of such "parachute payments" not being a “deductible by reason of Section 280G of the Code, then the Employee shall have an obligation to pay the Company upon demand an amount equal to the sum of: (i) the excess of the aggregate "parachute payment” as defined payments" paid to or for the Employee's benefit over the aggregate "parachute payments" that could have been paid to or for the Employee's benefit without any portion of such "parachute payments" not being deductible by reason of Section 280G of the Code; and (ii) interest on the amount set forth in section 280G(b)(2clause (i) of this sentence at the rate provided in Section 1274(b)(2)(B) of the Code. For purposes of determining whether you would receive a greater after-tax benefit Code from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect date of the Employee's receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation excess until the date of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and such payment.
(g). ) The Company Employee shall provide you with a reasonable opportunity not be required to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than mitigate the amount determined hereunder at the time of termination of your employment (including by reason of any payment provided for in this Agreement by seeking other employment or otherwise.
(h) If the existence employment of the Employee is terminated by the Company without Cause or amount the Employee's employment is terminated by the Employee under conditions entitling him to payment hereunder and the Company fails to make timely payment of which cannot the amounts then owed to the Employee under this Agreement, the Employee shall be determined entitled to interest on such amounts at the timerate of 1% above the prime rate (defined as the base rate on corporate loans at large U.S. money center commercial banks as published by the Wall Street Journal), then at compounded monthly, for the time that period from the amount of date such excess or shortfall amounts were otherwise due until payment is finally determined (a) made to the extent Employee (which interest shall be in addition to all rights which the Capped Payment Amount Employee is determined otherwise entitled to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codethis Agreement).
Appears in 1 contract
Sources: Employment Agreement (Ihop Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail the Executive fails to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you he shall continue to receive your full base salary at the rate then in effect at the commencement of any such periodand all compensation, together with all compensation payable to you including under the Company's disability Annual Incentive Plan or any other bonus or compensation plan or program or other similar plan policy, paid during such period, the period until this Agreement is terminated pursuant to Section 3(iiSubsection 3(I) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.Company's disability program then in effect. UNITED BANCORP, INC. FORM 10-K
(ii) If your the Executive retires pursuant to Subsection 3(i) hereof, this agreement is terminated.
(iii) If employment shall be terminated by the Company for Cause or by you other than for Good ReasonCause, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iiiiv) If your employment by the Company should shall be terminated (a) by the Company other than for Cause Cause, Retirement or Disability or if you should terminate your employment (b) for Good Reason, you then the Executive shall be entitled to the benefits provided below:
(aA) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are duegiven;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to youpay, at not later than the time specified in Subsection (v)fifth day following the Date of Termination, a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) two times the sum of (1I) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof and (2ii) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case amount of any bonus paid with respect pursuant to a partial year) paid to you the Annual Incentive Plan in the year preceding that in which the Date of Termination occurs. Such payment shall be reduced as appropriate, to not exceed the amount equal to a fraction of this payment, the numerator of which is the number of full months remaining to the Executive's normal retirement date and the denominator of which is (12, 24 or 36).
(C) notwithstanding any provision of the Annual Incentive Plan, the Company shall pay, not later than the fifth day following the Date of Termination, a lump sum amount equal to the sum of (I) any incentive compensation which has been allocated for the fiscal year preceding that in which the Date of Termination occurs but which has not yet been paid, and (ii) your target bonus any award under the Company's executive performance compensation plans in Annual Incentive Plan which you participate has not yet been paid for any period which has closed prior to the year in which such change in control occurs;Date of Termination.
(cD) the The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, the termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”Agreement);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company The Executive shall not provide be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit otherwise receivable provided for in this Section 4 be reduced by you pursuant to this paragraph (d) to any compensation earned as the extent that a similar benefit is actually received result of employment by you from a subsequent another employer during such thirty-six (36) month period, and any such benefit actually received or by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay youor otherwise, at the time specified and in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company4(vi) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsebelow.
(ivvi) Notwithstanding anything in this Agreement to In the contrary, whether or not you become entitled to the Severance Payments, if event that any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control otherwise) would not be deductible because of Section 280G of the Company or any person affiliated with the Company or such person) (collectively with the Severance PaymentsUNITED BANCORP, “Total Payments”) would be subject to the tax INC. FORM 10-K Internal Revenue Code of 1954, as amended (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed"Code"), the Total Payments aggregate amount payable hereunder shall be reduced, so that after giving effect to you pursuant to such reduction, no payment made or benefit under the terms of this Agreement shall will not be reduced so that the amount deductible because of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) Section 280G of the Code. For purposes of In determining whether you any payment under the terms of this Agreement would receive a greater after-tax benefit from not be deductible under Section 280G of the Capped Payment Amount than from the unreduced Total PaymentsCode, there all present and future payments and benefits shall be taken into account any Excise Tax that would be imposed and all federalincluded (and, state and local taxes required to be paid or borne by you in respect the case of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatorystock option, administrative and judicial authorities, the value of any other non-cash benefits or any deferred payment or benefitcash payments, shall be valued by a national independent accounting firm (at the Company's expense) acceptable to the Executive in accordance with the assistance principles of Sections 280G(d) (3) and (4) of the Code and any regulations promulgated thereunder) except payments and benefits which, in the written opinion of independent tax counsel selected by the Company's a national independent auditors accounting firm and reasonably acceptable to you; providedthe Executive, however, that unless otherwise determined by do not constitute "parachute payments" within the Company, the benefits payable pursuant to Subsection meaning of Section 280G(b) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(42) of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail the Executive fails to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you he shall continue to receive your full base salary at the rate then in effect at the commencement of any such periodand all compensation, together with all compensation payable to you including under the Company's disability Annual Incentive Plan or any other bonus or compensation plan or program or other similar plan policy, paid during such period, the period until this Agreement is terminated pursuant to Section 3(iiSubsection 3(I) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.Company's disability program then in effect. UNITED BANCORP, INC. FORM 10-K
(ii) If your the Executive retires pursuant to Subsection 3(i) hereof, this agreement is terminated.
(iii) If employment shall be terminated by the Company for Cause or by you other than for Good ReasonCause, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iiiiv) If your employment by the Company should shall be terminated (a) by the Company other than for Cause Cause, Retirement or Disability or if you should terminate your employment (b) for Good Reason, you then the Executive shall be entitled to the benefits provided below:
(aA) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are duegiven;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to youpay, at not later than the time specified in Subsection (v)fifth day following the Date of Termination, a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) one times the sum of (1I) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof and (2ii) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case amount of any bonus paid with respect pursuant to a partial year) paid to you the Annual Incentive Plan in the year preceding that in which the Date of Termination occurs. Such payment shall be reduced as appropriate, to not exceed the amount equal to a fraction of this payment, the numerator of which is the number of full months remaining to the Executive's normal retirement date and the denominator of which is (12, 24 or 36).
(C) notwithstanding any provision of the Annual Incentive Plan, the Company shall pay, not later than the fifth day following the Date of Termination, a lump sum amount equal to the sum of (I) any incentive compensation which has been allocated for the fiscal year preceding that in which the Date of Termination occurs but which has not yet been paid, and (ii) your target bonus any award under the Company's executive performance compensation plans in Annual Incentive Plan which you participate has not yet been paid for any period which has closed prior to the year in which such change in control occurs;Date of Termination.
(cD) the The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, the termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”Agreement);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company The Executive shall not provide be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit otherwise receivable provided for in this Section 4 be reduced by you pursuant to this paragraph (d) to any compensation earned as the extent that a similar benefit is actually received result of employment by you from a subsequent another employer during such thirty-six (36) month period, and any such benefit actually received or by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay youor otherwise, at the time specified and in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company4(vi) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsebelow.
(ivvi) Notwithstanding anything in this Agreement to In the contrary, whether or not you become entitled to the Severance Payments, if event that any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control otherwise) would not be deductible because of Section 280G of the Company or any person affiliated with the Company or such person) (collectively with the Severance PaymentsUNITED BANCORP, “Total Payments”) would be subject to the tax INC. FORM 10-K Internal Revenue Code of 1954, as amended (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed"Code"), the Total Payments aggregate amount payable hereunder shall be reduced, so that after giving effect to you pursuant to such reduction, no payment made or benefit under the terms of this Agreement shall will not be reduced so that the amount deductible because of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) Section 280G of the Code. For purposes of In determining whether you any payment under the terms of this Agreement would receive a greater after-tax benefit from not be deductible under Section 280G of the Capped Payment Amount than from the unreduced Total PaymentsCode, there all present and future payments and benefits shall be taken into account any Excise Tax that would be imposed and all federalincluded (and, state and local taxes required to be paid or borne by you in respect the case of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatorystock option, administrative and judicial authorities, the value of any other non-cash benefits or any deferred payment or benefitcash payments, shall be valued by a national independent accounting firm (at the Company's expense) acceptable to the Executive in accordance with the assistance principles of Sections 280G(d) (3) and (4) of the Code and any regulations promulgated thereunder) except payments and benefits which, in the written opinion of independent tax counsel selected by the Company's a national independent auditors accounting firm and reasonably acceptable to you; providedthe Executive, however, that unless otherwise determined by do not constitute "parachute payments" within the Company, the benefits payable pursuant to Subsection meaning of Section 280G(b) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(42) of the Code.
Appears in 1 contract
Sources: Special Severance Agreement (United Bancorp Inc /Oh/)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's ’s disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. [Executive’s Name] , 20 Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's ’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) 3 times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's ’s executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);; and
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section Section 409A of the Code, the right to a series of [Executive’s Name] , 20 monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(bSection 4(iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e)Subsection, “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of [Executive’s Name] , 20 this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would will be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed) the Company shall pay to you at the time specified in Subsection (v), below, an additional amount (the “Gross-Up Payment”) such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments payable to you pursuant to and any federal, state and local income tax and Excise Tax upon the payment provided for by this Agreement subsection, shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal For purposes of determining whether any amounts will be subject to the Excise Tax and the amount of the Total Paymentssuch Excise Tax, reduced by the minimum amount necessary to prevent any portion of (a) all amounts representing the Total Payments from being a shall be treated as “parachute paymentpayments” as defined in within the meaning of section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect “excess parachute payments” within the meaning of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (ivsection 280G(b)(1) (including application and interpretation of the Code shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company’s independent auditors and related regulatoryacceptable to you the Total Payments (in whole or in part) do not constitute parachute payments, administrative or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 280G(b)(4) of the Code in excess of the base amount within the meaning of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (b) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (1) the total amount of the Total Payments or (2) the amount of excess parachute payments within the meaning of section 280G(b)(1) of the Code (after applying clause (a), above), and judicial authorities, (c) the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise benefit shall be determined by the Company, ’s independent auditors in accordance with the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (dprinciples of sections 280G(d)(3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess or shortfall is finally determined. [Executive’s Name] , 20
(v) The payments provided for in Subsections (iii) and (iv) shall be made not later than the eighth day following execution by you of the Release of Claims attached as Exhibit A (the “Release of Claims”); provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirty-eighth day after the Company’s receipt of your signed Release of Claims. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you payable on the fifth day after demand therefor by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsection (iii)(d) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Sources: Change of Control Agreement (Precision Castparts Corp)
Compensation Upon Termination or During Disability. Following a change in control Control of the Company, as defined by Section 2, upon termination of your employment or during a period of disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's long-term disability plan or insurance program or other similar [plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programsCompany's insurance and retirement programs then in effect.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, -5- and the Company shall have no further obligations to you under this Agreement.
(iii) if your employment shall be terminated by you for Retirement, or by reason of your death, your benefits shall be determined in accordance with the Company's retirement and insurance programs then in effect.
(iv) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Disability or if (b) by you should terminate your employment for Good ReasonReason or Retirement, then you shall be entitled to the benefits provided below:
(aA) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are duedue except as otherwise provided below;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d)C, (e) D, and (f) E below, the “"Severance Payments”Payment") equal to three (3) times the sum 300% of (1) the greater of (i,) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater 300% of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you for the three full fiscal years preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;termination.
(cC) If any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code, (or any similar tax that may hereafter be imposed) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (vD), below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and Excise Tax upon the payment provided for by this subsection, shall be equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Total Severance Payments, if . For purposes of determining whether any of the Severance Payments or will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payment payments or benefit benefits received or to be received by you in connection with a change in control of the Company or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively which together with the Severance Payments, “constitute the "Total Payments”") would shall be treated as "parachute payments" within the meaning of section 28OG(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 28OG(b)(1) shall be treated as subject to the tax (the “Excise Tax”, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to you such other payments or benefits (in whole or in part) imposed by do not -6- constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 4999 28OG(b)(4) of the Code in excess of the base amount within the meaning of section 28OG(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that b) the amount of the Total Payments, Payments which shall be treated as so reduced, is subject to the Excise Tax shall be equal to the Capped Payment Amount lesser of (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid 1) the full total amount of the Total Payments. The “Capped Payment Amount” shall equal Payments of (2) the amount of excess parachute payments within the Total Payments, reduced by the minimum amount necessary to prevent any portion meaning of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv28OG(b)(1) (including application after applying clause (q) above, and interpretation of the Code and related regulatory, administrative and judicial authorities, (c) the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (dprinciples of section 28OG(d)(3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess or shortfall is finally determined.
(D) The payment provided for in paragraph (B), above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amounts of such payments, and the limitation on such payments set forth in paragraph (C), above, cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under section 280G(d)(4provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to -7- you, payable on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(E) The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce early right or benefit provided by this Agreement).
(v) If your employment shall be terminated (a) by the Company other than for Cause, Retirement or Disability or (b) by you for Good Reason, then for a twenty-four (24) month period after such termination, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those which you are receiving immediately prior to the Notice of Termination.
(vi) You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owing by you to the Company, or otherwise.
(vii) In addition to all other amounts payable to you under this Section 4, you shall be entitled to receive all benefits payable to you under the Company's retirement programs.
Appears in 1 contract
Sources: Agreement Relating to Employment (Zurn Industries Inc)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you The -------------------------------------------------- Employee shall be entitled to the following benefits during a period of disability, or upon termination of your her employment, as the case may be, provided that such period or termination occurs during the term Term of this Agreement:
(ia) During any period that you fail the Employee fails to perform your her full-time duties with the Company as a result of incapacity due to physical or mental illness, you she shall continue to receive your her base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you her under the Company's disability plan or program or other similar plan during such period, until this Agreement her employment is terminated pursuant to Section 3(ii10(a) hereof. Thereafter, or in the event your the Employee's employment shall be terminated by reason of your her death, your her benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iib) If your at any time the Employee's employment shall be terminated terminated: (i) by the Company for Cause or Disability or (ii) by you her for any reason (other than in a Voluntary Termination or for Good ReasonReason following the occurrence of a Change in Control), the Company shall pay you your her her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are she is entitled through the Date of Termination under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you her under this Agreement.
(iiic) If your the Employee's employment by the Company should be terminated terminated: (1) by reason of her death, (2) by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason(3) by the Employee in a Voluntary Termination, you she shall be entitled to the benefits provided below:
(ai) the Company shall pay to you your the Employee or the appropriate payee (as determined in accordance with Section 12(c)) (A) her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given; plus (B)(x) in the case of death or a Voluntary Termination all salary and bonus payments that would have been payable to the Employee pursuant to this Agreement for the remaining Term of this Agreement, or (y) in all other amounts cases, all salary and bonus payments that would have been payable to which you are entitled under any compensation plan the Employee had the Employee continued to be employed for a period of 12 months, assuming for the Company, at the time purpose of such payments are due;
(b) in lieu of any further that her salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) such remaining period is equal to three (3) times the sum of (1) the greater of (i) your annual rate of base her salary in effect on at the Date of Termination or (ii) your and that her annual rate bonus for such remaining Term is equal to the average of base salary in effect the annual bonuses paid to her by the Company with respect to the three fiscal years ended immediately prior to the change fiscal year in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding which the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control termination occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.plus
Appears in 1 contract
Sources: Employment Agreement (Ihop Corp)
Compensation Upon Termination or During Disability. Following a change Change in control Control of the CompanyCorporation, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this AgreementAgreement or, if earlier, within one year following such Change in Control of the Corporation:
(i) During any period that you fail to perform your full-time duties with the Company Corporation as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable reduced to the extent disability benefits are actually received by you under the Company's disability plan or program or other similar plan during such this period, until this Agreement is terminated pursuant to Section 3(ii4(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the CompanyCorporation's retirement, insurance insurance, disability and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company Corporation for Cause or by you other than for Good Reasonon account of Constructive Termination, the Company Corporation shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation or benefit plan of the Company Corporation at the time such payments are due, and the Company Corporation shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should Corporation shall be terminated by you on account of Constructive Termination or by the Company Corporation other than for Cause or Disability or if you should terminate your employment for Good ReasonDisability, then you shall be entitled to the benefits provided below:
(a) no later than the Company fifth day following the Date of Termination, the Corporation shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any incentive, bonus or other compensation plan of the CompanyCorporation, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company Corporation shall pay as severance pay to you, at the time specified in Subsection (v)iv) hereof, a lump sum severance payment (together with the payments provided in paragraphs paragraph (dc), (e) and (f) below, the “"Severance Payments”") equal to three (3) times the sum of (1) your annual salary rate (including for this purpose any deferred salary) as in effect as of the greater Date of Termination, immediately prior to the Change in Control of the Corporation or immediately prior to the first occurrence of an event or circumstance constituting Constructive Termination, whichever is greatest, and (i2) your annual target bonus under the applicable bonus or incentive compensation plans in respect of the calendar year preceding that in which occurs the Date of Termination, the Change in Control or the first occurrence of an event or circumstance constituting Constructive Termination, whichever date yields the greatest annual target bonus;
(c) notwithstanding any provision of any annual or long-term incentive plan to the contrary, in lieu of any payments under any bonus or incentive compensation plan in effect for the year in which your Date of Termination occurs, the Corporation shall pay you in a lump sum, in cash, at the time specified in Subsection (iv) hereof, (1) a pro rata portion (based on the number of whole months, with a partial month treated as a whole month, elapsed since the first day of the calendar year in which the Date of Termination occurs) of the target amount of all contingent awards granted under such plans for all uncompleted periods, plus (2) the value (assuming such value is a positive number) of any undistributed bonus bank balance (or other amount or amounts that have accumulated on your behalf), whether or not you would then have been entitled to a distribution thereof, under the Alltrista Corporation 1993 Economic Value Added Incentive Compensation Plan for Key Members of Management, or any successor thereto;
(d) in lieu of shares of common stock of the Corporation ("Corporation Shares") issuable upon the exercise of outstanding options ("Options"), if any, granted to you under any Corporation stock option plan (which Options shall be cancelled upon the making of the payment referred to below), you shall receive within the time provided for in Subsection (iv) hereof an amount in cash equal to the product of (A) the excess of the higher of the closing price of Corporation Shares as reported on the NASDAQ National Market System, the American Stock Exchange or The New York Stock Exchange, wherever listed, on or nearest the Date of Termination or the highest per share price for Corporation Shares actually paid in connection with any Change in Control of the Corporation, over the per share exercise price of each Option held by you (whether or not then fully exercisable), times (B) the number of Corporation Shares covered by each such Option;
(e) In addition to the benefits to which you are entitled under the defined contribution plan or plans of the Corporation, including the Corporation's [Savings and Retirement Plan] or any successor plan thereto (the "Defined Contribution Plans") (without regard to any amendment to the Defined Contribution Plans made subsequent to a Change in Control of the Corporation and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits under such plans), the Corporation shall pay to you in a lump sum, in cash, at the time specified in Subsection (iv) hereof, an amount equal to three (3) times the value of the matching or other employer contributions that the Corporation would have made to each such plan during the plan year immediately preceding the Date of Termination, the Change in Control, or the first occurrence of an event or circumstance constituting Constructive Termination, whichever date yields the highest value, at your rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect Termination, immediately prior to the change Change in control Control of the Company Corporation or immediately prior to the first occurrence of an event or circumstance constituting Constructive Termination, whichever is greatest, determined as if you had contributed the maximum amount permitted pursuant to applicable law and (2) the greater terms of (i) the average of the last such plan during any such year and accumulated thereunder three (3) annual bonuses additional years of service for purposes of eligibility and vesting (annualized in after the case Date of Termination);
(f) for the thirty-six (36) month period beginning with your termination of employment, the Corporation shall arrange to provide you and your dependents with life, disability, accident and health insurance benefits substantially similar to those that you were receiving immediately prior to the Notice of Termination, or if more favorable to you, the first occurrence of an event or circumstance constituting Constructive Termination. Benefits otherwise receivable by you pursuant to this paragraph (f) shall be reduced to the extent comparable benefits are actually received by you from any bonus paid with respect and all successor employers during the thirty-six (36) month period following the Date of Termination, and any such benefits actually received by you shall be reported to the Corporation; provided, however, that, unless you consent to a partial yeardifferent method (after taking into account the effect of such method on the calculation of "parachute payments" pursuant to Subsection (vi) paid hereof), such health insurance benefits shall be provided through a third-party insurer; and provided further, however, that the Corporation shall reimburse you for the excess, if any, of the cost of such benefits to you preceding over such cost immediately prior to the Date of Termination or, if more favorable to you, the cost of such benefits to you as of the first occurrence of an event or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurscircumstance constituting Constructive Termination;
(cg) the Company Corporation shall pay to you all reasonable legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement Agreement) unless the decision-maker in any proceeding, contest or dispute arising hereunder makes a formal finding that you did not have a reasonable basis for instituting such proceeding, contest or dispute;
(other h) the Corporation shall provide you with individual outplacement services in accordance with the general custom and practice generally accorded to an executive of your position.
(iv) Except as provided in Subsection (vi) hereof, the payments provided for in Subsections (iii) (b), (c), (d) and (e) above, shall be made not later than any the fifth day following the Date of Termination; provided, however, that if the amounts of such fees payments cannot be finally determined on or expenses incurred before such day, the Corporation shall pay to you on such day an estimate, as determined in connection good faith by the Corporation, of the minimum amount of such payments and shall pay the remainder of such payments (together with any such claim which is determined to be frivolousinterest at the rate provided in section 1274(b)(2)(B) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”");
(d) for a thirty-six (36) month period after such termination, as soon as the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to amount thereof can be determined but in no event later than the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (thirtieth day after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to . In the event that the amount of the estimated payments exceeds the amount subsequently determined under clause to have been due, such excess shall constitute a loan by the Corporation to you, payable on the fifth day after demand by the Corporation (itogether with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(v) Except as provided in Subsection (iii)(biii)(f) hereof, over (ii) you shall not be required to mitigate the vested retirement pension (commencing at age 65)amount of any payment provided for in this Section 5 by seeking other employment or otherwise, which you had then accrued pursuant to nor shall the provisions amount of the Plans. For purposes of any payment or benefit provided for in this paragraph (e), “actuarial equivalent” shall Section 5 be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred reduced by any compensation earned by you in connection with such relocation (including expenses incurred in selling your home to as the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control result of the Company) and which are not reimbursed employment by another employer; and
(g) all options and stock appreciation rights , by retirement benefits, by offset against any amount claimed to purchase or acquire shares of Common Stock of the Company held by be owed to you immediately prior to the Date of Termination shall become exercisable in fullCorporation, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether otherwise. Whether or not you become entitled to the Severance Payments, if any of the Severance Payments payments or any other payment or benefit benefits received or to be received by you in connection with a change Change in control Control of the Company Corporation or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the CompanyCorporation, any person whose actions result in a change Change in control Control of the Company Corporation or any person affiliated with the Company Corporation or such person) (collectively with such payments or benefits, excluding the Severance Payments, “"Gross-Up Payment" (as defined below) being hereinafter referred to as the "Total Payments”") would will be subject to the any excise tax (the “Excise Tax”) imposed by under section 4999 of the Code (or any similar tax that may hereafter be imposedthe "Excise Tax"), the Corporation shall pay to you an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments payable to you pursuant to this Agreement and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount For purposes of the Total Payments, reduced by the minimum amount necessary to prevent determining whether any portion of the Total Payments from being a “will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments shall be treated as "parachute payment” payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to you and selected by the accounting firm which was, immediately prior to the Change in Control of the Corporation, the Corporation's independent auditor (the "Auditor"), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the meaning of section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the "base amount" (as defined in section 280G(b)(2280G(b)(3) of the Code) allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining whether the amount of the Gross-Up Payment, you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Date of Termination (or if there is no Date of Termination, then the date on which the Gross-Up Payment is calculated for purposes of this Subsection vi), net of the maximum applicable reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is finally determined to be less than the amount taken into account any hereunder in calculating the Gross-Up Payment, you shall repay to the Corporation, within five (5) business days following the time that the amount of such reduction in the Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that would be imposed portion of the Gross-Up Payment attributable to the Excise Tax and all federal, state and local income and employment taxes required imposed on the Gross-Up Payment being repaid by you, to be paid or borne by you the extent that such repayment results in respect a reduction in the Excise Tax and a dollar-for-dollar reduction in your taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (ivrate provided in section 1274(b)(2)(B) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, Code. In the value of any non-cash benefits or any deferred payment or benefit) with event that the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently Excise Tax is determined to be greater or less than exceed the amount determined taken into account hereunder at in calculating the time of termination of your employment Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then at the Corporation shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by you with respect to such excess) within five (5) business days following the time that the amount of such excess or shortfall is finally determined (a) determined. You and the Corporation shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the extent the Capped Payment Amount is determined to be greaterTotal Payments.
(vi) As soon as practicable, following a Takeover Threat, or in any event, within twenty (20) business days thereafter, the Company shall make Corporation agrees it will establish and fund an irrevocable grantor trust in an amount sufficient to provide for all cash payments of benefits specified in Section 5, assuming that you were entitled to such benefits, plus an additional payment $50,000 to you equal cover the legal fees referred to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the CodeSection 5(iii)(g).
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disabilitydescribed below upon becoming Disabled, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement. The benefits to which you are entitled, subject to the terms and conditions of this Agreement, are:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illnessUpon becoming Disabled, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's Corporation’s disability plan or program or other similar plan during such period, until this Agreement your employment is terminated by the Corporation pursuant to Section 3(ii) hereofhereof or by you. Thereafter, or in the event your employment shall be is terminated by reason of your death, your benefits shall be determined under the Company's Corporation’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company Corporation for Cause or by you other than for Good Reason, the Company Corporation shall pay you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company Corporation at the time such payments are due, and the Company Corporation shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should Corporation shall be terminated by you for Good Reason or by the Company Corporation other than for Cause or Disability or if you should terminate your employment for Good Reason(including Extended Disability), then you shall be entitled to the benefits provided below:
(a) the Company Corporation shall pay to you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given given, at the time specified in Section 4(iv), plus all other amounts to which you are entitled under any compensation plan of the Company, Corporation at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company Corporation shall pay as severance pay to you, at the time EXECUTIVE -18- DATE specified in Subsection (vSection 4(iv), a lump sum severance payment (together with the payments provided in paragraphs (d), (eSections 4(iii)(c) and (fd) below, the “Severance Payments”) equal to three (3) times the sum 290% of (1) the greater of (i) your annual rate of base salary as in effect on as of the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change Change in control Control, whichever is greater and without regard to whether you have been employed by the Corporation or any of its subsidiaries for at least 12 consecutive months, and 290% of the Company average of the annual bonuses awarded to you pursuant to the Corporation’s bonus plan(s) for executive officers, or any successor bonus plan(s) thereto, with respect to the three fiscal years preceding the Date of Termination; provided that if you shall not have been continuously employed by the Corporation or any of its subsidiaries for the preceding three full fiscal years, such average annual bonuses shall be determined based on the aggregate of all bonuses paid to you with respect to any of such three fiscal years and the actual period of your employment through the end of the preceding fiscal year (2stated in years, including a fraction thereof); and provided further that if no bonuses shall have been paid to you with respect to the preceding fiscal year, such bonuses (for purposes of computing both the average annual bonuses and the aggregate amount of Severance Payments) shall be the greater of (ix) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid award to you preceding for such fiscal year, if any, theretofore approved by the Date Corporation’s Board of Termination Directors or a duly constituted committee thereof, (iiy) your target bonus under for such fiscal year, stated as a percentage of your base annual salary, theretofore approved by the Company's executive performance compensation plans Corporation’s Board of Directors or a duly constituted committee thereof, or (z) your current annual salary multiplied by the highest percentage that your bonuses represented in which you participate for relation to your base annual salary with respect to either of the year in which such change in control occurs;first two of the three preceding fiscal years.
(c) the Company Corporation shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any as set forth in Section 10 of this Agreement)); and
(d) for a thirty-five (35) month period after such fees or expenses incurred in connection termination, the Corporation shall arrange to provide you with any such claim which is determined life, disability, accident and group health insurance benefits substantially similar to those that you were receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by you pursuant to this Section 4(iii)(d) shall be frivolous) or in connection with any tax audit or proceeding reduced to the extent attributable comparable benefits are actually received by you during the thirty-five (35) month period following your termination, and any such benefits actually received by you shall be reported to the application Corporation.
(iv) The payments provided for in Section 4(iii)(a) shall commence not later than the fifth day following the Date of Termination. The payments provided for in Sections 4(iii)(b) shall be made on the date which is six months plus two days following the Date of Termination together with interest calculated from the Date of Termination through the payment EXECUTIVE -19- DATE date at the rate provided in section 4999 1274(d)(1)(C) of the Internal Revenue Code of 1986, as amended (the “Code”);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company You shall not provide be required to mitigate the amount of any benefit payment provided for in this Section 4 by seeking other employment or otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month periodand, and any such benefit actually received by you shall be reported to the Company;
(e) except as provided in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”Section 4(iii)(d), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent amount of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received provided for in this Section 4 shall not be reduced by any compensation earned by you as the result of employment by another employer or self-employment, by retirement benefits, by offset against any amount claimed to be received owed by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement Corporation, or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeotherwise.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control Control as defined by Subsection 2(i), upon termination of the Companyyour employment or during a period of disability, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illnessillness that does not constitute Disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program Long-Term Incentive Plan or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated terminated, or by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.; 10
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, or for Disability or death, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.;
(iii) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Disability or if (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(aA) the The Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;, except as otherwise provided below.
(bB) in In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) Paragraph E below and (f) any payment you may receive pursuant to Paragraph D below, the “"Severance Payments”") equal to three (3) 1.5 times the sum of (1) the greater of (i) your annual rate of base salary and (ii) bonuses, averaged over the three (3) years (or such portion of the three (3) years during which you actually were employed by the Company) prior to the occurrence of the circumstances giving rise to the Notice of Termination.
(C) Health plan, dental plan, life insurance plan and long-term disability plan coverage in 11 effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) will continue for a thirty-six period of twenty four (3624) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you months from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, as defined by Subsection 2(i), upon termination of your employment or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by the Company or by you for Retirement, or by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation plans and programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation or benefit plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company shall be terminated (a) by the Company other than for Cause, Retirement or Disability or (b) by you for Good Reason, then you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;, except as otherwise provided below; and
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum cash severance payment in an amount equal to two times your "base amount" (within the meaning of section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), provided, however, that such severance payment shall be no less than 1.25 times the amount reported on your Form W-2 statement issued by the Company with respect to the year preceding that in which the Date of Termination occurs. Notwithstanding any other provision of this Agreement, in the event that any payment or benefit received or to be received by you in connection with a change in control or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change in control or any person affiliated with (or which, as a result of the completion of the transactions causing a change in control, will become affiliated) the Company or such person within the meaning of section 1504 of the Code) (all such payments and benefits being hereinafter called the "Severance Payments") would not be deductible (in whole or in part), by the Company, an affiliate or any person making such payment or providing such benefit as a result of section 280G of the Code, then, to the extent necessary to make such portion of the Severance Payments deductible (and after taking into account any reduction in the Severance Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement), (A) the cash Severance Payments shall first be reduced (if necessary, to zero), and (B) all other non-cash Severance Payments shall next be reduced. For purposes of this limitation (i) no portion of the Severance Payments the receipt or enjoyment of which you shall have effectively waived in writing prior to the Date of Termination shall be taken into account, (ii) no portion of the Severance Payments shall be taken into account which in the opinion of tax counsel selected by the Company's independent auditors and reasonably acceptable to you does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to the extent necessary so that the Severance Payments (other than those referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of tax counsel referred to in clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Severance Payments shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
(C) the payment provided for in paragraph (B) above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amount of such payment cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payment and shall pay the remainder of such payment (together with interest at the payments rate provided in paragraphs (d), (esection 1274(b)(2)(B) and (fof the Code) below, as soon as the “Severance Payments”) equal to three (3) times amount thereof can be determined but in no event later the sum of (1) the greater of (i) your annual rate of base salary in effect on thirtieth day after the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to Termination. In the change in control event that the amount of the estimated payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company and to you, payable on the fifth day after demand by the Company (2together with interest at the rate provided in section 1274(b)(2)(B) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;Code).
(cD) the Company also shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such legal fees and legal expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code to any payment or benefit provided hereunder). Such payments shall be made at the later of 1986the times specified in paragraph (C) above, or within five (5) days after your request for payment accompanied with such evidence of fees and expenses incurred as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsereasonably may require.
(iv) Notwithstanding anything You shall not be required to mitigate the amount of any payment provided for in this Agreement to Section 4 by seeking other employment or otherwise, nor shall the contrary, whether or not you become entitled to the Severance Payments, if amount of any of the Severance Payments or any other payment or benefit received or provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be received owed by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such personotherwise.
(v) (collectively with the Severance Payments, “Total Payments”) would be subject In addition to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments all other amounts payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be lessSection 4, you shall repay be entitled to the Company the amount of such shortfallreceive all benefits payable to you, in each case with interest at the discount rate applicable respective time or times such payments are due, under section 280G(d)(4) of the CodePension Plan[s], and any other plan or agreement relating to retirement benefits.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a -------------------------------------------------- change in control Control of the Company, as defined by Section 2, upon termination of your employment or during a period of disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's long-term disability plan or insurance program or other similar [plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programsCompany's insurance and retirement programs then in effect.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) if your employment shall be terminated by you for Retirement, or by reason of your death, your benefits shall be determined in accordance with the Company's retirement and insurance programs then in effect.
(iv) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Disability or if (b) by you should terminate your employment for Good ReasonReason or Retirement, then you shall be entitled to the benefits provided below:
(aA) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are duedue except as otherwise provided below;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d)C, (e) D, and (f) E below, the “"Severance Payments”Payment") equal to three (3) times the sum 300% of (1) the greater of (i,) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater 300% of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you for the three full fiscal years preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;termination.
(cC) If any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code, (or any similar tax that may hereafter be imposed) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (vD), below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and Excise Tax upon the payment provided for by this subsection, shall be equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Total Severance Payments, if . For purposes of determining whether any of the Severance Payments or will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payment payments or benefit benefits received or to be received by you in connection with a change in control of the Company or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively which together with the Severance Payments, “constitute the "Total Payments”") would shall be treated as "parachute payments" within the meaning of section 28OG(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 28OG(b)(1) shall be treated as subject to the tax (the “Excise Tax”, unless in the opinion of tax counsel selected by the Company's independent auditors and acceptable to you such other payments or benefits (in whole or in part) imposed by do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 4999 28OG(b)(4) of the Code in excess of the base amount within the meaning of section 28OG(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that b) the amount of the Total Payments, Payments which shall be treated as so reduced, is subject to the Excise Tax shall be equal to the Capped Payment Amount lesser of (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid 1) the full total amount of the Total Payments. The “Capped Payment Amount” shall equal Payments of (2) the amount of excess parachute payments within the Total Payments, reduced by the minimum amount necessary to prevent any portion meaning of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv28OG(b)(1) (including application after applying clause (q) above, and interpretation of the Code and related regulatory, administrative and judicial authorities, (c) the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (dprinciples of section 28OG(d)(3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess or shortfall is finally determined.
(D) The payment provided for in paragraph (B), above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amounts of such payments, and the limitation on such payments set forth in paragraph (C), above, cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under section 280G(d)(4provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(E) The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce early right or benefit provided by this Agreement).
(v) If your employment shall be terminated (a) by the Company other than for Cause, Retirement or Disability or (b) by you for Good Reason, then for a twenty-four (24) month period after such termination, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those which you are receiving immediately prior to the Notice of Termination.
(vi) You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owing by you to the Company, or otherwise.
(vii) In addition to all other amounts payable to you under this Section 4, you shall be entitled to receive all benefits payable to you under the Company's retirement programs.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with in addition to the payments provided in paragraphs (c), (d), (e), (f), (g), (h) and (fi) below, the “"Severance Payments”") equal to three (3) times the sum of (1) 300% of the greater of (iA) your annual rate of base salary in effect on the Date of Termination or (iiB) your annual rate of base salary in effect immediately prior to the change Change in control Control, and (2) 300% of your guideline bonus with respect to the year in which the Change in Control occurs; your annual base salary and guideline bonus (as taken into account under the first half of this Subsection (iii)(b)) shall count for three years additional credited service and be included in final average earnings calculations for participants in the Company's Retirement Account Plan, Supplemental Executive Retirement Plan, Pension Benefit Equalization Plan and any successor or substitute plans thereto, a sample calculation of which appears in Exhibit A to this Agreement;
(c) Plan or any successor or substitute plans thereto (except those SARs applicable to ISOs granted on or before the date hereof) (which Options shall be cancelled upon the making of the payment referred to below), the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the excess of, in the case of an ISO granted after the date hereof, the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) and, in the case of all other Options, the higher of such closing price or the highest per share price for Common Shares actually paid in connection with any Change in Control, over the per share option price of each Option held by you (whether or not then fully exercisable), and (2) the greater number of Common Shares covered by each such Option;
(d) in lieu of Common Shares issuable upon the lapse of restrictions, if any, granted to you under the Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any successor or substitute plan(s) thereto, the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (i1) the average closing price of Common Shares as reported on the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) or the highest per share price for Common Shares actually paid in connection with any Change in Control, whichever is greater (iisuch price, the "Price"), and (2) your target bonus the number of Common Shares granted to you subject to such restrictions;
(1) all outstanding performance units awarded to you under the Company's executive performance compensation plans in which 1998 Key Employees' Stock Incentive Plan, whether or not vested, shall be cancelled, and you participate for shall receive a cash payment equal to the year in which amount you would have earned at a 100% target award valuation; and (2) all outstanding unrestricted stock awarded to you under such change in control occursplan, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the product of (A) the number of cancelled unrestricted shares and (B) the Price;
(cf) to exceed a maximum allowance of $100,000; and the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”to any payment or benefit provided hereunder);
(dg) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident life and health insurance benefits and perquisites substantially similar to those which you were receiving immediately prior to the change in control Notice of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate paymentsTermination. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (dg) to the extent that a similar if an equivalent benefit is actually received by you from a subsequent employer during such the thirty-six (36) month periodperiod following your termination, and any such benefit actually received by you shall be reported to the Company;
(eh) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), the Company shall pay to you, in lieu of amounts which may otherwise be payable to you under any bonus plan (a "Bonus Plan"), an amount in cash equal to (1) your annual target bonus for the expenses incurred year in which the Change in Control occurs, multiplied by a fraction, (A) the numerator of which equals the number of full or partial days in such annual performance period during which you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed employed by the Company and (B) the denominator of which is 365, and (2) the entire target bonus opportunity with respect to transferred Employees prior to each performance period in progress under all other Bonus Plans in effect at the change in control time of the Company) and which are not reimbursed by another employertermination; and
(gi) all options starting at age 55, you shall receive retiree medical and stock appreciation rights to purchase or acquire shares of Common Stock of life benefits from the Company held by Company. Such benefits shall be no less favorable than the benefits that you immediately prior to would have received had you, at the Date time Notice of Termination is given, both (1) attained age 55 and (2) retired from the Company. Notwithstanding the foregoing, any benefit described in the preceding sentence shall become exercisable in full, whether or not otherwise exercisable in accordance constitute secondary coverage with the terms of the employee benefit plans pursuant respect to which such options retiree medical and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be life benefits actually received by you in connection with a change in control of the Company or the termination of your any subsequent employment (whether pursuant to or self-employment) following your termination.
(1) days after the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so time that the amount of such reduction in Excise Tax is finally determined the Total Payments, as so reduced, is equal portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Capped Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment Amount (as defined below), but only being repaid by you if after such repayment results in a reduction you would receive in Excise Tax and/or a greater after-federal and state and local income tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal deduction) plus interest on the amount of such repayment at the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined rate provided in section 280G(b)(21274(b)(2)(B) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from In the Capped Payment Amount than from event that the unreduced Total Payments, there shall be Excise Tax is determined to exceed the amount taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then at the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) within ten (10) days after the time that the amount of such excess or shortfall is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d), (e), (f) and (h) shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Sources: Change in Control Agreement (Dun & Bradstreet Corp /De/)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period of disability or termination occurs during the term of this Agreement:,
(i) During During, any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the The Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;; and
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection subsection (viv), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) Payment equal to three twelve (312) times the sum of (1) the greater of (i) your annual rate of base months salary in effect on the Date of Termination or Termination.
(iiiv) your annual rate of base salary The payments provided for in effect immediately prior to Subsection (iii) shall be made not later than the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding fifth day following the Date of Termination provided, however, that if the amounts of such payments cannot be finally determined on or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which before such change in control occurs;
(c) day, the Company shall pay to you all legal fees and expenses incurred on such day an estimate, as determined in good faith by you as a result the Company, of the minimum amount of such termination, including all payments and shall pay the remainder of such fees and expenses, if any, incurred payments (together with interest at the rate provided in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous1274(b)(2)(B) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, ) as soon as the right to a series of monthly installment payments under this paragraph (d) shall amount thereof can be treated as a right to a series of separate payments. Notwithstanding determined but in no event later than the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (thirtieth day after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to . In the event that the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e)estimated payments exceeds the amount subsequently determined to have been due, “actuarial equivalent” such excess shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed constitute a loan by the Company to transferred Employees prior to you payable on the change fifth day after demand therefore by the Company (together with interest at the rate provided in control section 1274(b)(2)(B) of the CompanyCode.)
(v) and which are You shall not reimbursed be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer; and
(g) all options and stock appreciation rights , by retirement benefits, by offset against any amount claimed to purchase or acquire shares of Common Stock of the Company held be owed by you immediately prior to the Date of Termination shall become exercisable in fullCompany, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapseotherwise.
(ivvi) Notwithstanding anything in any provision of this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any aggregate present value of all "payments in the nature of compensation" (within the meaning of Section 280G of the Severance Payments or any other payment or benefit received or Code) provided to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to shall be one dollar less than the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of amount that is finally deductible by the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 under Section 280G of the Code (or any similar tax that may hereafter be imposed)and, to the Total Payments payable to you pursuant to extent necessary, payments and benefits under this Agreement shall be reduced so in order that this limitation not be exceeded. It is the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application intention of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (avi) to avoid excise taxes on you under Section 4999 of the extent Code or the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay disallowance of a deduction to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) pursuant to Section 280G of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period of disability or termination occurs during the term of this Agreement:;
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Co Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the The Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;; and
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection subsection (viv), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) Payment equal to three twelve (312) times the sum of (1) the greater of (i) your annual rate of base months salary in effect on the Date of Termination or Termination.
(iiiv) your annual rate of base salary The payments provided for in effect immediately prior to Subsection (iii) shall be made not later than the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding fifth day following the Date of Termination Termination; provided, however, that if the amounts of such payments cannot be finally determined on or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which before such change in control occurs;
(c) day, the Company shall pay to you all legal fees and expenses incurred on such day an estimate, as determined in good faith by you as a result the Company, of the minimum amount of such termination, including all payments and shall pay the remainder of such fees and expenses, if any, incurred payments (together with interest at the rate provided in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous1274(b)(2)(B) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, ) as soon as the right to a series of monthly installment payments under this paragraph (d) shall amount thereof can be treated as a right to a series of separate payments. Notwithstanding determined but in no event later than the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (thirtieth day after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to . In the event that the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e)estimated payments exceeds the amount subsequently determined to have been due, “actuarial equivalent” such excess shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed constitute a loan by the Company to transferred Employees prior to you payable on the change fifth day after demand therefor by the Company (together with interest at the rate provided in control section 1274(b)(2)(B) of the CompanyCode.)
(v) and which are You shall not reimbursed be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer; and
(g) all options and stock appreciation rights , by retirement benefits, by offset against any amount claimed to purchase or acquire shares of Common Stock of the Company held be owed by you immediately prior to the Date of Termination shall become exercisable in fullCompany, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapseotherwise.
(ivvi) Notwithstanding anything in any provision of this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any aggregate present value of all "payments in the nature of compensation" (within the meaning of Section 280G of the Severance Payments or any other payment or benefit received or Code) provided to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to shall be one dollar less than the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of amount that is fully deductible by the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 under Section 280G of the Code (or any similar tax that may hereafter be imposed)and, to the Total Payments payable to you pursuant to extent necessary, payments and benefits under this Agreement shall be reduced so in order that this limitation not be exceeded. It is the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application intention of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (avi) to avoid excise taxes on you under Section 4999 of the extent Code or the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay disallowance of a deduction to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) pursuant to Section 280G of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail the Executive fails to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you he shall continue to receive your full base salary at the rate then in effect and all compensation, including under the Annual Incentive Plan or any other bonus or compensation plan or policy, paid during the period until this Agreement is terminated pursuant to Subsection 3(I) hereof. Thereafter, benefits shall be determined in accordance with the Company's disability program then in effect.
(ii) If the Executive retires pursuant to Subsection 3(i) hereof, this agreement is terminated.
(iii) If employment shall be terminated for Cause, the Company shall pay full base UNITED BANCORP, INC. FORM 10-K salary through the Date of Termination at the rate in effect at the commencement time Notice of any such periodTermination is given, together with all compensation payable to you and the Company shall have no further obligations under this Agreement.
(iv) If employment by the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment Company shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iia) If your employment shall be terminated by the Company for Cause or by you other than for Cause, Retirement or Disability or (b) for Good Reason, then the Executive shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to youpay, at not later than the time specified in Subsection (v)fifth day following the Date of Termination, a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) two times the sum of (1I) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof and (2ii) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case amount of any bonus paid with respect pursuant to a partial year) paid to you the Annual Incentive Plan in the year preceding that in which the Date of Termination occurs. Such payment shall be reduced as appropriate, to not exceed the amount equal to a fraction of this payment, the numerator of which is the number of full months remaining to the Executive's normal retirement date and the denominator of which is (12, 24 or 36).
(C) notwithstanding any provision of the Annual Incentive Plan, the Company shall pay, not later than the fifth day following the Date of Termination, a lump sum amount equal to the sum of (I) any incentive compensation which has been allocated for the fiscal year preceding that in which the Date of Termination occurs but which has not yet been paid, and (ii) your target bonus any award under the Company's executive performance compensation plans in Annual Incentive Plan which you participate has not yet been paid for any period which has closed prior to the year in which such change in control occurs;Date of Termination.
(cD) the The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, the termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”Agreement);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company The Executive shall not provide be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit otherwise receivable provided for in this Section 4 be reduced by you pursuant to this paragraph (d) to any compensation earned as the extent that a similar benefit is actually received result of employment by you from a subsequent another employer during such thirty-six (36) month period, and any such benefit actually received or by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay youor otherwise, at the time specified and in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company4(vi) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsebelow.
(ivvi) Notwithstanding anything in this Agreement to In the contrary, whether or not you become entitled to the Severance Payments, if event that any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control otherwise) would not be deductible because of Section 280G of the Company or any person affiliated with the Company or such person) (collectively with the Severance PaymentsInternal Revenue Code of 1954, “Total Payments”) would be subject to the tax as amended (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed"Code"), the Total Payments aggregate amount payable hereunder shall be reduced, so that after giving effect to you pursuant to such reduction, no payment made or benefit under the terms of this Agreement shall will not be reduced so that the amount deductible because of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) Section 280G of the Code. For purposes of In determining whether you any payment under the terms of this Agreement would receive a greater afternot be UNITED BANCORP, INC. FORM 10-tax benefit from K deductible under Section 280G of the Capped Payment Amount than from the unreduced Total PaymentsCode, there all present and future payments and benefits shall be taken into account any Excise Tax that would be imposed and all federalincluded (and, state and local taxes required to be paid or borne by you in respect the case of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatorystock option, administrative and judicial authorities, the value of any other non-cash benefits or any deferred payment or benefitcash payments, shall be valued by a national independent accounting firm (at the Company's expense) acceptable to the Executive in accordance with the assistance principles of Sections 280G(d) (3) and (4) of the Code and any regulations promulgated thereunder) except payments and benefits which, in the written opinion of independent tax counsel selected by the Company's a national independent auditors accounting firm and reasonably acceptable to you; providedthe Executive, however, that unless otherwise determined by do not constitute "parachute payments" within the Company, the benefits payable pursuant to Subsection meaning of Section 280G(b) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(42) of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(ia) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's ’s disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(iiParagraph 3(b) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's ’s retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iib) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iiic) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided belowbelow subject to the provisions of Section 5:
(ai) the Company shall pay to you (A) your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus given; (B) a lump sum cash payment equal to the amount of your annual incentive bonus cash award payable during the fiscal year of your Date of Termination, calculated assuming performance at the target level and prorated to reflect the number of months of such fiscal year elapsed through the Date of Termination from the Company; and (C) all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(bii) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v)you within 30 days after your Date of Termination, a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) times the sum of (1A) the greater of (i1) your annual rate of base salary in effect on the Date of Termination or (ii2) your annual rate of base salary in effect immediately prior to the change Change in control of the Company Control and (2B) the greater of (i1) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii2) your target the average of the last three annual bonuses (annualized in the case of any bonus under the Company's executive performance compensation plans paid with respect to a partial year) paid to you preceding such Change in which you participate for the year in which such change in control occurs;Control or
(ciii) the Company shall pay to you all reasonable legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined by a court of competent jurisdiction to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);; and
(iv) the Company shall allow you and your dependents to continue participation in the Company’s medical benefits and life insurance plans for a period of two (2) years from your Date of Termination.
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company You shall not provide any benefit otherwise receivable by you pursuant be required to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to mitigate the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything payment provided for in this Agreement to Section 4 by seeking other employment or otherwise, nor shall the contrary, whether or not you become entitled to the Severance Payments, if amount of any of the Severance Payments or any other payment or benefit received or to provided for in this Section 4 be received reduced by any compensation earned by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv)employment by another employer, the Capped Payment Amount isby retirement benefits, at by offset against any time and from time to time, subsequently determined amount claimed to be greater or less than the amount determined hereunder at the time of termination of your employment (including owed by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) you to the extent the Capped Payment Amount is determined to be greaterCompany, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeor otherwise.
Appears in 1 contract
Sources: Executive Severance Agreement (Owens & Minor Inc/Va/)
Compensation Upon Termination or During Disability. Following a change Change in control Control of the Company, as defined by Section 2(i), upon termination of your employment or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may bebenefits, provided that such period of Disability or termination Date of Termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company and its subsidiaries as a result of incapacity due to physical or mental illnessyour Disability, you shall continue to receive an amount equal to your base salary and bonus at the rate in effect at the commencement of any such period, together with all compensation payable to you under period through the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereofDate of Termination for Disability. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms insurance programs of such programsthe Company and its subsidiaries then in effect.
(ii) If your employment shall be terminated by the Company or any of its subsidiaries for Cause or by you other than for Good Reason, the Company (or one of its subsidiaries, if applicable) shall pay you your full base salary and bonus through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other given and shall pay any amounts to which be paid to you are entitled under pursuant to any other compensation plan of the Company at the time such payments are dueplans, programs or employment agreements then in effect, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment shall be terminated by reason of your death or Retirement, your benefits shall be determined in accordance with the retirement and insurance programs of the Company and its subsidiaries then in effect.
(iv) If your employment by the Company should and its subsidiaries shall be terminated by (a) the Company and its subsidiaries other than for Cause Cause, your death, Retirement, or Disability or if (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(aA) the The Company (or one of its subsidiaries, if applicable) shall pay to you your full base salary and bonus through the Date of Termination at the rate in effect at the time the Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the CompanyCompany applicable to you, at the time such payments are due;.
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the The Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “"Unadjusted Severance Payments”Payment") equal to three 1.5 times your "Base Amount" as such term is defined under Section 280G(b)(3) of the Code. Your Base Amount shall be determined in accordance with Section 280G(b)(3) of the Code and with the proposed, temporary or final regulations promulgated under that Section in effect, if any. In the absence of such regulations, if you were not employed by the Company (3or any corporation affiliated with the Company (an "Affiliate") times within the sum meaning of Section 1504 of the Code or a predecessor of the Company) during the entire five calendar years (the "Base Period") preceding the calendar year in which a Change in Control of the Company occurred, your average annual compensation for the purposes of such determination shall be the average of your annual compensation for both complete and partial calendar years during the Base Period during which you were so employed, determined by annualizing any compensation (other than nonrecurring items) includible in your gross income for any partial calendar year. For purposes of the preceding sentence, compensation payable to you by the Company or any Affiliate or predecessor of the Company shall include every type and form of compensation includible in your gross income in respect of your employment by the Company or any Affiliate or predecessor of the Company, including compensation income recognized as a result of your exercise of stock options or sale of the stock so acquired, except to the extent otherwise provided in proposed, temporary or final regulations promulgated under Section 280G of the Code defining base amount.
(C) The Unadjusted Severance Payment shall not be reduced by the amount of any other payment or the value of any benefit received or to be received by you in connection with your termination of employment or contingent upon a Change in Control of the Company (whether payable pursuant to the terms of this Agreement or any other agreement, plan or arrangement with the Company or an Affiliate, predecessor or successor of the Company or any person whose actions result in a Change in Control of the Company or an Affiliate of such person) unless (1) in the greater opinion of (itax counsel selected by the Company's Vice President-General Counsel and reasonably acceptable to you, such other payment or benefit constitutes a "parachute payment" within the meaning of Section 280G(b)(2) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company Code, and (2) in the greater opinion of such tax counsel, the Unadjusted Severance Payment plus all other payments or benefits which constitute "parachute payments" within the meaning of Section 280G(b)(2) of the Code would result in a portion of the Unadjusted Severance Payment being subject to the excise tax under Section 4999 of the Code. In such event, the amount of the Unadjusted Severance Payment shall be reduced by the minimum amount necessary such that no portion thereof will be subject to the excise tax under Section 4999 of the Code. The Unadjusted Severance Payment, as reduced, if at all, pursuant to the provisions of this paragraph shall be referred to as the Adjusted Severance Payment. In determining whether the Unadjusted Severance Payment shall be reduced under this paragraph, (i) the average of the last three (3) annual bonuses (annualized there shall not be included in the case computation any payment if you shall have effectively waived your receipt or enjoyment of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination such payment or benefit, and (ii) your target bonus under the value of any non-cash benefit or any deferred cash payment shall be determined by the Company's executive performance compensation plans independent auditors in which you participate for accordance with the year in which such change in control occurs;principles of Sections 280G(d)(3) and (4) of the Code.
(cD) Except to the extent that the payment thereof would subject any payment hereunder to the excise tax under Section 4999 of the Code:
(1) The Company shall also pay to you all legal fees and expenses reasonably incurred by you as a result of such termination, in connection with this Agreement (including all such fees and expenses, if any, incurred in contesting or disputing the nature of any such termination for purposes of this Agreement or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”Agreement);; and
(d2) for For a thirtytwenty-six four (3624) month period after such terminationtermination of your employment, the Company shall arrange to provide you with life, disability, accident and health insurance benefits substantially similar to those which you were are receiving or entitled to receive immediately prior to the change Notice of Termination; provided, however, that this Agreement in control no way diminishes any rights to those benefits to which you would be entitled if you were to retire as an employee of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit Minerals Technologies Inc. Benefits otherwise receivable by you pursuant to this paragraph (dSection 4(iv)(D)(2) shall be reduced to the extent that a similar benefit is comparable benefits are actually received provided to you by you from a subsequent employer during such thirtythe twenty-six four (3624) month periodperiod following your termination, and any such benefit benefits actually received by provided to you shall be reported to the Company;.
(eE) in addition If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that, notwithstanding the retirement benefits to which good faith of you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any in applying the terms of its subsidiaries (collectively, the “Plans”this Section 4(iv), the Company shall pay you a lump sum, aggregate "parachute payments" paid to or for your benefit are in cash, equal an amount that would result in any portion of such "parachute payments" being subject to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued excise tax under the terms Section 4999 of the Plans (without regard Code, then you shall have an obligation to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of pay the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in upon demand an amount equal to the amount determined under clause (i) sum of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control excess of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights aggregate "parachute payments" paid to purchase or acquire shares for your benefit over the aggregate "parachute payments" that would have been paid to or for your benefit without any portion of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be "parachute payments" being subject to the excise tax (the “Excise Tax”) imposed by section under Section 4999 of the Code Code; and (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that 2) interest on the amount set forth in clause (1) of this sentence at the Total Payments, as so reduced, is equal to the Capped Payment Amount applicable Federal rate (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2Section 1274(d) of the Code. For purposes of determining whether you would receive a greater after-tax benefit ) from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect date of the your receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation excess until the date of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to yousuch payment; provided, however, that unless otherwise determined in the event and to the extent that an excise tax is nevertheless imposed on said amount your obligation to pay said amount to the Company is hereby waived.
(F) You shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the Companyamount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer or by retirement benefits received after the Date of Termination or otherwise, except as specifically provided in this Section 4.
(G) The Company shall pay you the benefits payable pursuant to Subsection (iii) Unadjusted Severance Payment in a lump sum no later than the fifth day following the Date of Termination; provided, however, that if the Company in good faith believes that the Unadjusted Severance Payment shall be reduced in under the following order: (b), (e), (f), (c), (dprovisions of Section 4(iv)(C) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greaterhereof, the Company shall make an additional payment pay to you equal at such time a good faith estimate of the Adjusted Severance Payment (the "Estimated Adjusted Severance Payment," the computation of which shall be given to you in writing together with a written explanation of the basis for making such excessadjustment) which amount shall in no event be less than 50% of the Unadjusted Severance Payment. The Company shall, and (b) within 60 days of the Date of Termination, either pay to you the extent balance of the Capped Unadjusted Severance Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case together with interest thereon at the discount applicable Federal rate applicable under section 280G(d)(4(as defined in Section 1274(d) of the Code) or deliver to you a copy of the opinion of the tax counsel referred to in Section 4(iv)(C) hereof establishing the amount of the Adjusted Severance Payment. If the Adjusted Severance Payment exceeds the Estimated Adjusted Severance Payment, the difference shall be paid to you at such time together with interest thereon at the applicable Federal rate (as defined in Section 1274(d) of the Code).
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail the Executive fails to perform your full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, you he shall continue to receive your full base salary at the rate then in effect and all compensation, including under the Annual Incentive Plan or any other bonus or compensation plan or policy, paid during the period until this Agreement is terminated pursuant to Subsection 3(I) hereof. Thereafter, benefits shall be determined in accordance with the Company's disability program then in effect.
(ii) If the Executive retires pursuant to Subsection 3(i) hereof, this agreement is terminated.
(iii) If employment shall be terminated for Cause, the Company shall pay full base UNITED BANCORP, INC. FORM 10-K salary through the Date of Termination at the rate in effect at the commencement time Notice of any such periodTermination is given, together with all compensation payable to you and the Company shall have no further obligations under this Agreement.
(iv) If employment by the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment Company shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iia) If your employment shall be terminated by the Company for Cause or by you other than for Cause, Retirement or Disability or (b) for Good Reason, then the Executive shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to youpay, at not later than the time specified in Subsection (v)fifth day following the Date of Termination, a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three (3) 2.99 times the sum of (1I) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof and (2ii) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case amount of any bonus paid with respect pursuant to a partial year) paid to you the Annual Incentive Plan in the year preceding that in which the Date of Termination occurs. Such payment shall be reduced as appropriate, to not exceed the amount equal to a fraction of this payment, the numerator of which is the number of full months remaining to the Executive's normal retirement date and the denominator of which is (12, 24 or 36).
(C) notwithstanding any provision of the Annual Incentive Plan, the Company shall pay, not later than the fifth day following the Date of Termination, a lump sum amount equal to the sum of (I) any incentive compensation which has been allocated for the fiscal year preceding that in which the Date of Termination occurs but which has not yet been paid, and (ii) your target bonus any award under the Company's executive performance compensation plans in Annual Incentive Plan which you participate has not yet been paid for any period which has closed prior to the year in which such change in control occurs;Date of Termination.
(cD) the The Company shall also pay to you all legal fees and expenses incurred by you as a result of such termination, the termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”Agreement);.
(dv) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company The Executive shall not provide be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit otherwise receivable provided for in this Section 4 be reduced by you pursuant to this paragraph (d) to any compensation earned as the extent that a similar benefit is actually received result of employment by you from a subsequent another employer during such thirty-six (36) month period, and any such benefit actually received or by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay youor otherwise, at the time specified and in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company4(vi) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsebelow.
(ivvi) Notwithstanding anything in this Agreement to In the contrary, whether or not you become entitled to the Severance Payments, if event that any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control otherwise) would not be deductible because of Section 280G of the Company or any person affiliated with the Company or such person) (collectively with the Severance PaymentsInternal Revenue Code of 1954, “Total Payments”) would be subject to the tax as amended (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed"Code"), the Total Payments aggregate amount payable hereunder shall be reduced, so that after giving effect to you pursuant to such reduction, no payment made or benefit under the terms of this Agreement shall will not be reduced so that the amount deductible because of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) Section 280G of the Code. For purposes of In determining whether you any payment under the terms of this Agreement would receive a greater afternot be UNITED BANCORP, INC. FORM 10-tax benefit from K deductible under Section 280G of the Capped Payment Amount than from the unreduced Total PaymentsCode, there all present and future payments and benefits shall be taken into account any Excise Tax that would be imposed and all federalincluded (and, state and local taxes required to be paid or borne by you in respect the case of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatorystock option, administrative and judicial authorities, the value of any other non-cash benefits or any deferred payment or benefitcash payments, shall be valued by a national independent accounting firm (at the Company's expense) acceptable to the Executive in accordance with the assistance principles of Sections 280G(d) (3) and (4) of the Code and any regulations promulgated thereunder) except payments and benefits which, in the written opinion of independent tax counsel selected by the Company's a national independent auditors accounting firm and reasonably acceptable to you; providedthe Executive, however, that unless otherwise determined by do not constitute "parachute payments" within the Company, the benefits payable pursuant to Subsection meaning of Section 280G(b) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(42) of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you The Employee -------------------------------------------------- shall be entitled to the following benefits during a period of disability, or upon termination of your her employment, as the case may be, provided that such period or termination occurs during the term Term of this Agreement:
(ia) During any period that you fail the Employee fails to perform your her full-time duties with the Company as a result of incapacity due to physical or mental illness, you she shall continue to receive your her base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you her under the Company's disability plan or program or other similar plan during such period, until this Agreement her employment is terminated pursuant to Section 3(ii10(a) hereof. Thereafter, or in the event your the Employee's employment shall be terminated by reason of your her death, your her benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(iib) If your at any time the Employee's employment shall be terminated terminated: (i) by the Company for Cause or Disability or (ii) by you her for any reason (other than in a Voluntary Termination or for Good ReasonReason following the occurrence of a Change in Control), the Company shall pay you your her her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are she is entitled through the Date of Termination under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you her under this Agreement.
(iiic) If your the Employee's employment by the Company should be terminated terminated: (1) by reason of her death, (2) by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason(3) by the Employee in a Voluntary Termination, you she shall be entitled to the benefits provided below:
(ai) the Company shall pay to you your the Employee or the appropriate payee (as determined in accordance with Section 12(c)) (A) her full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given; plus (B)(x) in the case of death or a Voluntary Termination all salary and bonus payments that would have been payable to the Employee pursuant to this Agreement for the remaining Term of this Agreement, or (y) in all other amounts cases, all salary and bonus payments that would have been payable to which you are entitled under any compensation plan the Employee had the Employee continued to be employed for a period of 12 months, assuming for the Company, at the time purpose of such payments are due;
(b) in lieu of any further that her salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) such remaining period is equal to three (3) times the sum of (1) the greater of (i) your annual rate of base her salary in effect on at the Date of Termination or (ii) your and that her annual rate bonus for such remaining Term is equal to the average of base salary in effect the annual bonuses paid to her by the Company with respect to the three fiscal years ended immediately prior to the change fiscal year in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding which the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control termination occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.plus
Appears in 1 contract
Sources: Employment Agreement (Ihop Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reasonany reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (vSection 5(vii), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three 2.99 times (3or such lesser number of years and partial years as may then be remaining until your normal retirement age under the Company Pension Plan) times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target or budgeted annual bonus under the Company's executive performance compensation plans in which you participate for of the year in which such change in control occursthat includes your Date of Termination;
(c) the Company shall pay to you all reasonable legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined by a court of competent jurisdiction to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”");; and
(d) for a thirty-six (36) month period after such termination, the Company shall arrange allow you and your dependents to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change continue participation in control of the Company. For purposes 's medical benefits and life insurance plans for a period of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you 2.99 years from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the your Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iviii) Notwithstanding anything You shall not be required to mitigate the amount of any payment provided for in this Agreement to Section 4 by seeking other employment or otherwise, nor shall the contrary, whether or not you become entitled to the Severance Payments, if amount of any of the Severance Payments or any other payment or benefit received or to provided for in this Section 4 be received reduced by any compensation earned by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv)employment by another employer, the Capped Payment Amount isby retirement benefits, at or by offset against any time and from time to time, subsequently determined amount claimed to be greater or less than the amount determined hereunder at the time of termination of your employment (including owed by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) you to the extent the Capped Payment Amount is determined to be greaterCompany, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeor otherwise.
Appears in 1 contract
Sources: Executive Severance Agreement (Owens & Minor Inc/Va/)
Compensation Upon Termination or During Disability. Following a change in control Change of Control, as defined by Section 2 hereof, upon termination of your employment within 2 years after the Company, occurrence of such Change of Control or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation amounts payable to you under any compensation plan of the Company's disability plan or program or other similar plan Company during such period, until this Agreement is terminated pursuant to Section 3(iiSubsection 3(i) hereof. Thereafter, or in the event your employment shall be terminated by you other than for Good Reason or by reason of your death, your benefits shall be determined under the Company's retirement, ’s insurance and or other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause Cause, Disability or death, or by you other than for Good Reason, the Company shall shall, to the extent not theretofore paid, pay you in a lump sum your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is givengiven within 10 business days of the Date of Termination, plus all other amounts to which you are entitled under any insurance and other compensation plan programs of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Cause, Disability or if death or (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(aA) The Company shall, to the Company shall extent not theretofore paid, pay to you in a lump sum your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given within 10 business days of the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;, except as otherwise provided below.
(bB) in In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs paragraph (dC) of this Subsection 4(iii), (e) and (f) below, the “Severance Payments”) equal to three (3) two times the sum of (1) the greater of (ia) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof, and (2b) 100% of your target bonus amount established pursuant to the greater of (i) compensation or bonus plan in effect immediately prior to the average occurrence of the last three (3) annual bonuses (annualized in circumstance giving rise to the case Notice of any bonus paid with respect to a partial year) paid to you preceding Termination. The Severance Payments shall be made within 10 business days of the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;Termination.
(cC) the The Company shall pay to you any deferred compensation, including but not limited to deferred bonuses, allocated or credited to you as of the Date of Termination.
(D) The Company shall also pay to you all legal fees and expenses incurred by you prior to December 31 of the second calendar year following the calendar year that includes the Date of Termination as a result of such termination, termination including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapseAgreement.
(ivE) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would Taxes - All payments shall be subject to the tax (withholding of such amounts as the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, Company is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid withheld pursuant to any applicable federal, state, or borne local law or regulation, and you are responsible for any tax liability on such payments.
(F) All payments under this Agreement will be contingent upon the execution of an Application and Release of Claims by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, and this Application and Release of Claims shall govern the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g)timing of all payments made. The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations A copy of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time terms and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount conditions of such excess or shortfall Application and Release of Claims is finally determined (a) attached as an appendix to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codethis Agreement.
Appears in 1 contract
Sources: Change of Control Agreement (Apex Silver Mines LTD)
Compensation Upon Termination or During Disability. Following a change in control of the Company, as defined by Subsection 2(i), upon termination of your employment or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) benefits: During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation benefits payable to you under the Company's disability plan or program or ’s Salary Continuation Program, together with all other similar plan compensation payable to you during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by the Company or by you for Retirement, or by reason of your death, your benefits shall be determined under the Company's ’s retirement, insurance and other compensation plans and programs then in effect in accordance with the terms of such programs.
(ii) . If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) . If your employment by the Company should shall be terminated (a) by the Company other than for Cause Cause, Retirement or Disability or if (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(a) : the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) , except as otherwise provided below; in lieu of any further (i) salary payments to you for periods subsequent to the Date of TerminationTermination or (ii) payments to you under the Company’s Salary Continuation Program, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three two (32) times the sum of (1) the greater of (ix) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change occurrence of the circumstance giving rise to the Notice of Termination given in control respect thereof, and (y) a full annual bonus payment (without regard to actual attainment of all relevant performance goals) calculated by using the Executive Annual Compensation Plan Target Percentages found in section "J" of such plan, as amended on June 22, 2000, times your base salary referenced in (x), above ; in lieu of shares of common stock of the Company ("Company Shares") issuable upon exercise of outstanding options ("Options") or any related stock appreciation rights ("Rights"), if any, granted to you under the Long-Term Incentive Program (which Options and (2) Rights shall be canceled upon the greater making of the payment referred to below), you shall receive an amount in cash equal to the product of (i) the average excess of the last three (3) annual bonuses (annualized in higher of the case closing price of any bonus paid with respect to a partial year) paid to you preceding the Company’s Shares as reported on the New York Stock Exchange-Composite Tape on or nearest the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expensesor, if anynot listed on such exchange, incurred on the nationally recognized exchange or Quotation System on which trading volume in contesting Company Shares is highest) or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred the highest per share price for Company Shares actually paid in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes , over the per share exercise price of section 409A each Option or Right held by you (whether or not then fully exercisable), times (ii) the number of Company Shares covered by each such Option or Right; and an amount in cash equal to the Code, sum of (i) the right present value of your accrued benefit (determined by using the ongoing actuarial assumptions in effect immediately prior to your Date of Termination under the Company’s defined benefit plan in which you are a series of monthly installment payments participant) under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, any Pension Plans or other defined benefit plan sponsored by the Company shall not provide and (ii) your account balance under any benefit otherwise receivable defined contribution plan sponsored by you pursuant to this paragraph (d) the Company, in either case to the extent that a similar such accrued benefit is actually received by you from a subsequent employer during such thirty-six (36) month periodor account balance, and any such benefit actually received by you as the case may be, shall not be reported to fully vested at the Company;
(e) in time of your Date of Termination. In addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company Pension Plan or any of its subsidiaries (collectively, the “Plans”)successor plans thereto, the Company shall pay to you a lump sumsum amount, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (ix) the retirement pension (determined as a straight life annuity commencing at age 65Normal Retirement Age or, if later, two years after the Date of Termination) which you would have accrued under the terms of the Plans Pension Plan (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans Pension Plan made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company accumulated (after the Date of Termination) for three twenty-four (324) additional years and as if you had accumulated three additional calendar years months of service credit thereunder at your highest annual rate of compensation during the twelve (for purposes 12) months immediately preceding the Date of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereofTermination, over (iiy) the vested retirement pension (determined as a straight life annuity commencing at age 65), Normal Retirement Age which you had then accrued pursuant to the provisions of the PlansPension Plan). For the purposes of this paragraph (eSection 4(iii)(E), “the actuarial equivalent” value of the retirement benefits shall be determined calculated as the present value of a single life annuity using the same methods and assumptions UP 1984 mortality table adjusted one year forward. The interest rate used to calculate in the calculation shall be the rate specified for purposes of determining the present value of lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control section 417(e)(3) of the Code established for the second month preceding the date of your termination. The payments provided for in paragraphs (B),(C), (D) and (E), above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined in good faith by the Company;
, of the minimum amount of such payments and shall pay the remainder of such payments (ftogether with interest at the rate provided in Section 1274(b)(2)(B) should you move your residence of the Code) as soon as the amount thereof can be determined but in order to pursue other business opportunities within one (1) year no event later then the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company will pay to you, payable on the fifth day after demand by the Company (together with interest at the time specified rate provided in Subsection (vSection 1274(b)(2)(B) of the Code), an amount equal . The Company also shall pay to the you all legal fees and expenses incurred by you as a result of such termination (including all such legal fees and legal expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement or in connection with such relocation (including expenses incurred in selling your home any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder). Such payments shall be made at the later of the times specified in paragraph (F) above, or within five (5) days after your request for payment accompanied with such evidence of fees and expenses were customarily reimbursed by incurred as the Company to transferred Employees prior to the change in control reasonably may require. Certain Additional Payments. If all, or any portion, of the Company) payments or other benefits provided under any section of this Agreement, either alone or together with other payments and benefits which you receive or are not reimbursed by another employer; and
(g) all options and stock appreciation rights entitled to purchase or acquire shares of Common Stock of receive from the Company held by you immediately prior to the Date of Termination shall become exercisable in fullor its affiliates, (whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other under an existing plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such personother agreement) (collectively with the Severance "Payments, “Total Payments”") would constitute an excess "parachute payment" within the meaning of section 280G of the Internal Revenue Code of 1986, as amended (the "Code") and would result in the imposition on you of an excise tax under section 4999 of the Code, (such excise tax, together with any interest and penalties related thereto, is hereinafter collectively referred to as the "Excise Tax") then, in addition to any other benefits to which you are entitled under this Agreement, you shall be entitled to receive an additional payment (a "Gross-Up Payment") in cash, in an amount such that after payment by you of all taxes (and any interest and penalties imposed with respect thereto) imposed upon the Gross-Up Payment, including, without limitation, (1) any income taxes, (2) any payroll taxes, including FICA and FUTA, and any state or local payroll taxes and (3) any Excise Tax, you retain an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Unless you and the Company otherwise agree in writing, any determination required under this Section 4(iv), including without limitation, the amount of the Gross-Up Payment, shall be computed and made in writing by the independent public accountants engaged by the Company as its auditors, (the "Accountants"), whose determination shall be, subject to your reasonable approval of the tax (calculations required under this Section 4(iv), conclusive and binding upon you and the “Excise Tax”) imposed Company for all purposes. For purposes of making the calculations required by this Section 4(iv), the Accountants may rely on reasonable, good faith interpretations concerning the application of section 280G and section 4999 of the Code. You and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 4(iv). The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4(iv). As a result of the uncertainty in the application of section 280G and section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is possible that, as a result of Internal Revenue Service examination of your tax returns or otherwise, (i) an amount of Gross-Up Payment will not have been made by the Company that should have been made (an "Underpayment") or that (ii) an amount of Gross-Up Payment that has been made will be determined to have been in excess of the Gross-Up Payment actually required (an "Overpayment"). In the event that you are required to make an additional payment of any similar tax Excise Tax beyond that may hereafter be imposed)originally calculated by the Accountants, the Total Payments payable Accountants shall determine the amount of the Underpayment that has occurred, taking into account all taxes described in (A) above, and any such Underpayment shall be promptly paid by the Company to you or to the Internal Revenue Service for your benefit. In the event that it is finally determined that an Overpayment has occurred, you agree that you shall promptly, and in any event within 30 days of such determination, refund the amount of the Overpayment, plus any interest actually paid to you with respect to the Overpayment, to the Company. The Company shall have the right with respect to the determination of either an Underpayment or an Overpayment to require you to appeal the assertion of any Underpayment or to claim, and sue for, a refund of any Excise Tax paid by you upon any Payment or Gross-Up Payment, provided that the Company shall promptly following your request, advance you all expenses, including counsel and accounting fees, that based on advice of your counsel or accountants, you may reasonably expect to incur in connection with any such proceeding. You agree that if the total of such advances exceeds the expenses incurred by you, you will refund the excess to the Company. Alternatively, the Company may undertake any such proceeding, in which case you agree that you shall cooperate with the Company, as the Company may reasonably request, in any such proceeding. If your employment shall be terminated (A) by the Company other than for Cause, Retirement or Disability or (B) by you for Good Reason, then for a twenty-four (24) month period after such termination, the Company shall arrange to provide you at the Company’s expense with life, disability, accident, and health insurance benefits, as well as tax and financial planning services, substantially similar to those which you are receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii4(v) shall be reduced in to the extent comparable benefits are actually received by you during the twenty-four (24) month period following order: (b)your termination, (e), (f), (c), (d) and (g). The Company any such benefits actually received by you shall provide you with a reasonable opportunity be reported to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time You shall not be required to time, subsequently determined to be greater or less than mitigate the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence provided for in this Section 4 by seeking other employment or amount of which cannot be determined at the time)otherwise, then at the time that nor shall the amount of such excess any payment or shortfall is finally determined (a) benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the extent the Capped Payment Amount is determined Company, or otherwise except as specifically provided in this Section 4. In addition to be greater, the Company shall make an additional payment all other amounts payable to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be lessunder this Section 4, you shall repay be entitled to the Company the amount of such shortfallreceive all benefits payable to you, in each case with interest at the discount rate applicable respective time or times such payments are due, under section 280G(d)(4) the Pension Plans, the Flexible Savings Plan of the Code▇▇▇▇▇▇▇▇▇ Technology Corporation and any other plan or agreement relating to retirement benefits.
Appears in 1 contract
Sources: Special Severance Agreement (Carpenter Technology Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “"Severance Payments”") equal to three (3) 3 times the sum of (1) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”");; and
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) Company Pension Plan and any supplemental or excess benefit pension plan(s) plan maintained by the Company or any of its subsidiaries (collectively, the “"Plans”"), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (determined as a straight life annuity commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(bSection 4(iii)(b) hereof, over (ii) the vested retirement pension (determined as a straight life annuity commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e)Subsection, “"actuarial equivalent” " shall be determined using the same methods and assumptions used to calculate lump sum distributions utilized under the Precision Castparts Corp. Retirement Company Pension Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company and all stock appreciation rights, in each case granted after the date of this Agreement (or prior to the date of this Agreement if the terms of the option or stock appreciation right provide for acceleration upon a change in control of the Company) and held by you immediately prior to the Date of Termination shall become exercisable in fullat any time on and after the Date of Termination, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “"Total Payments”") would will be subject to the tax (the “"Excise Tax”") imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed) the Company shall pay to you at the time specified in Subsection (v), below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments payable to you pursuant to and any federal, state and local income tax and Excise Tax upon the payment provided for by this Agreement subsection, shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal For purposes of determining whether any amounts will be subject to the Excise Tax and the amount of the Total Paymentssuch Excise Tax, reduced by the minimum amount necessary to prevent any portion of (a) all amounts representing the Total Payments from being a “shall be treated as "parachute payment” as defined in payments" within the meaning of section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect "excess parachute payments" within the meaning of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (ivsection 280G(b)(1) (including application and interpretation of the Code shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and related regulatoryacceptable to you the Total Payments (in whole or in part) do not constitute parachute payments, administrative or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of section 280G(b)(4) of the Code in excess of the base amount within the meaning of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (b) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (1) the total amount of the Total Payments or (2) the amount of excess parachute payments within the meaning of section 280G(b)(1) of the Code (after applying clause (a), above), and judicial authorities, (c) the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (dprinciples of sections 280G(d)(3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess or shortfall is finally determined.
(v) The payments provided for in Subsections (iii) and (iv) shall be made not later than the eighth day following execution by you of the Release of Claims attached as Exhibit A (the "Release of Claims"); provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirty-eighth day after the Company's receipt of your signed Release of Claims. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you payable on the fifth day after demand therefor by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsection (iii)(d) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Sources: Change of Control Agreement (Precision Castparts Corp)
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability disability or your death or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (vSection 5(vii), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three 2.00 times (3or such lesser number of years and partial years as may then be remaining until your normal retirement age under the Company Pension Plan) times the sum of (1l) the greater of (i) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target or budgeted annual bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occursthat includes your Date of Termination;
(c) the Company shall pay to you all reasonable legal fees and expenses incurred by you as a result of such termination, including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined by a court of competent jurisdiction to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “"Code”");; and
(d) for a thirty-six (36) month period after such termination, the Company shall arrange allow you and your dependents to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change continue participation in control of the Company. For purposes 's medical benefits and life insurance plans for a period of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you 2.00 years from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the your Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything You shall not be required to mitigate the amount of any payment provided for in this Agreement to Section 4 by seeking other employment or otherwise, nor shall the contrary, whether or not you become entitled to the Severance Payments, if amount of any of the Severance Payments or any other payment or benefit received or to provided for in this Section 4 be received reduced by any compensation earned by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv)employment by another employer, the Capped Payment Amount isby retirement benefits, at or by offset against any time and from time to time, subsequently determined amount claimed to be greater or less than the amount determined hereunder at the time of termination of your employment (including owed by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) you to the extent the Capped Payment Amount is determined to be greaterCompany, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeor otherwise.
Appears in 1 contract
Sources: Executive Severance Agreement (Owens & Minor Inc/Va/)
Compensation Upon Termination or During Disability. Following a change in control of the Company, as defined by Subsection 2(i), upon termination of your employment or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by the Company or by you for Retirement, or by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation plans and programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation or benefit plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company shall be terminated (a) by the Company other than for Cause, Retirement or Disability or (b) by you for Good Reason, then you shall be entitled to the benefits provided below:
(A) the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;, except as otherwise provided below; and
(bB) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum cash severance payment in an amount equal to two times your "base amount" (within the meaning of section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code")), provided, however, that such severance payment shall be no less than 1.25 times the amount reported on your Form W-2 statement issued by the Company with respect to the year preceding that in which the Date of Termination occurs. Notwithstanding any other provision of this Agreement, in the event that any payment or benefit received Page 7 or to be received by you in connection with a change in control or the termination of your employment (whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, its successors, any person whose actions result in a change in control or any person affiliated with (or which, as a result of the completion of the transactions causing a change in control, will become affiliated) the Company or such person within the meaning of section 1504 of the Code) (all such payments and benefits being hereinafter called the "Severance Payments") would not be deductible (in whole or in part), by the Company, an affiliate or any person making such payment or providing such benefit as a result of section 280G of the Code, then, to the extent necessary to make such portion of the Severance Payments deductible (and after taking into account any reduction in the Severance Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement), (A) the cash Severance Payments shall first be reduced (if necessary, to zero), and (B) all other non-cash Severance Payments shall next be reduced. For purposes of this limitation (i) no portion of the Severance Payments the receipt or enjoyment of which you shall have effectively waived in writing prior to the Date of Termination shall be taken into account, (ii) no portion of the Severance Payments shall be taken into account which in the opinion of tax counsel selected by the Company's independent auditors and reasonably acceptable to you does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to the extent necessary so that the Severance Payments (other than those referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of tax counsel referred to in clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Severance Payments shall be determined by the Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
(C) the payment provided for in paragraph (B) above, shall be made not later than the fifth day following the Date of Termination, provided, however, that if the amount of such payment cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payment and shall pay the remainder of such payment (together with interest at the payments rate provided in paragraphs (d), (esection 1274(b)(2)(B) and (fof the Code) below, as soon as the “Severance Payments”) equal to three (3) times amount thereof can be determined but in no event later the sum of (1) the greater of (i) your annual rate of base salary in effect on thirtieth day after the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to Termination. In the change in control event that the amount of the estimated payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company and to you, payable on the fifth day after demand by the Company (2together with interest at the rate provided in section 1274(b)(2)(B) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;Code).
(cD) the Company also shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such legal fees and legal expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable Page 8 to the application of section 4999 of the Internal Revenue Code to any payment or benefit provided hereunder). Such payments shall be made at the later of 1986the times specified in paragraph (C) above, or within five (5) days after your request for payment accompanied with such evidence of fees and expenses incurred as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsereasonably may require.
(iv) Notwithstanding anything You shall not be required to mitigate the amount of any payment provided for in this Agreement to Section 4 by seeking other employment or otherwise, nor shall the contrary, whether or not you become entitled to the Severance Payments, if amount of any of the Severance Payments or any other payment or benefit received or provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be received owed by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such personotherwise.
(v) (collectively with the Severance Payments, “Total Payments”) would be subject In addition to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments all other amounts payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be lessSection 4, you shall repay be entitled to the Company the amount of such shortfallreceive all benefits payable to you, in each case with interest at the discount rate applicable respective time or times such payments are due, under section 280G(d)(4) of the CodePension Plan[s], and any other plan or agreement relating to retirement benefits.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period of disability or termination occurs during the term of this Agreement:,
(i) During During, any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the The Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;; and
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection subsection (viv), a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) Payment equal to three twelve (312) times the sum of (1) the greater of (i) your annual rate of base months salary in effect on the Date of Termination or Termination.
(iiiv) your annual rate of base salary The payments provided for in effect immediately prior to Subsection (iii) shall be made not later than the change in control of the Company and (2) the greater of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding fifth day following the Date of Termination Termination- provided, however, that if the amounts of such payments cannot be finally determined on or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which before such change in control occurs;
(c) day, the Company shall pay to you all legal fees and expenses incurred on such day an estimate, as determined in good faith by you as a result the Company, of the minimum amount of such termination, including all payments and shall pay the remainder of such fees and expenses, if any, incurred payments (together with interest at the rate provided in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous1274(b)(2)(B) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, ) as soon as the right to a series of monthly installment payments under this paragraph (d) shall amount thereof can be treated as a right to a series of separate payments. Notwithstanding determined but in no event later than the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (thirtieth day after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to . In the event that the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e)estimated payments exceeds the amount subsequently determined to have been due, “actuarial equivalent” such excess shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed constitute a loan by the Company to transferred Employees prior to you payable on the change fifth day after demand therefore by the Company (together with interest at the rate provided in control section 1274(b)(2)(B) of the CompanyCode.)
(v) and which are You shall not reimbursed be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer; and
(g) all options and stock appreciation rights , by retirement benefits, by offset against any amount claimed to purchase or acquire shares of Common Stock of the Company held be owed by you immediately prior to the Date of Termination shall become exercisable in fullCompany, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapseotherwise.
(ivvi) Notwithstanding anything in any provision of this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any aggregate present value of all "payments in the nature of compensation" (within the meaning of Section 280G of the Severance Payments or any other payment or benefit received or Code) provided to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to shall be one dollar less than the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of amount that is finally deductible by the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 under Section 280G of the Code (or any similar tax that may hereafter be imposed)and, to the Total Payments payable to you pursuant to extent necessary, payments and benefits under this Agreement shall be reduced so in order that this limitation not be exceeded. It is the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application intention of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (avi) to avoid excise taxes on you under Section 4999 of the extent Code or the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay disallowance of a deduction to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) pursuant to Section 280G of the Code.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the CompanyCorporation, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company Corporation as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the CompanyCorporation's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the CompanyCorporation's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company Corporation for Cause or by you other than for Good Reason, the Company Corporation shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company Corporation at the time such payments are due, and the Company Corporation shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should Corporation shall be terminated by you for Good Reason or by the Company Corporation other than for Cause or Disability or if you should terminate your employment for Good ReasonDisability, then you shall be entitled to the benefits provided below:
(a) the Company The Corporation shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the CompanyCorporation, at the time such payments are due;
(b) in In lieu of any further salary payments payment to you for periods subsequent to the Date of Termination, the Company Corporation shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with the payments provided in paragraphs (d), (ec) and (fe) below, the “"Severance Payments”") equal to three (3) times the sum 300% of (1) the greater of (i) your annual rate of base salary in effect on as of the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control of the Company Corporation, whichever is greater, and 300% of the highest annual bonus awarded to you pursuant to the Corporation's Incentive Profit Share Plan or any successor plan thereto, with respect to three (3) fiscal years preceding the change in control of the Corporation;
(c) In lieu of shares of common stock of the Corporation ("Common Shares") issuable upon exercise of outstanding warrants or options, the Corporation shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the excess of the higher of the closing price of the Common Stock as reported on Nasdaq on or nearest the Date of Termination or the highest per share price for Common Shares actually paid in connection with any change in control of the Corporation, over the per share option price of each Option held by you (whether or not fully vested or exercisable), and (2) the greater number of (i) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which Common Shares covered by each such change in control occursOption;
(cd) the Company The Corporation shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section Section 4999 of the Internal Revenue Code of 1986Code, as amended (the “Code”to any payment or benefit provided hereunder);; and
(de) for For a thirtytwenty-six four (3624) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.the
Appears in 1 contract
Sources: Employment Agreement (Inamed Corp)
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illnessillness or disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated (i) by the Company other than for Cause or Disability or (ii) if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with in addition to the payments provided in paragraphs (c), (d), (e), (f), (g), (h) and (fi) below, the “"Severance Payments”") equal to three (3) times the sum of (1) three hundred percent (300%) of the greater of (iA) your annual rate of base salary in effect on the Date of Termination or (iiB) your annual rate of base salary in effect immediately prior to the change Change in control of the Company Control, and (2) the greater of: (X) three hundred percent (300%) of (i) the average of the last three (3) annual bonuses (annualized in the case of any your target bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change the Change in control occursControl occurs and (Y) $1,500,000;
(c) you shall immediately vest in your accrued benefits under the Supplemental Executive Benefit Plan and your annual base salary and target bonus (as taken into account under Subsection (iii)(b)) shall count for three years additional credited service and be included in final average earnings calculations for participants in the Company's Retirement Account Plan, Supplemental Executive Benefit Plan, Pension Benefit Equation Plan and any successor or substitute plans thereto;
(d) in lieu of shares of common stock of the Company ("Common Shares") issuable upon exercise of outstanding options ("Options") and stock appreciation rights ("SARs"), if any, granted to you under the Company's stock incentive plans (which Options and SARs shall be cancelled upon the making of the payment referred to below), the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the excess of, in the case of Options that are incentive stock options (ISOs) under Section 422A of the Internal Revenue Code of 1986 (the "Code") and SARs related thereto, the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) and, in the case of all other Options and SARs related thereto, the higher of such closing price or the highest per share price for Common Shares actually paid in connection with any Change in Control, over the per share option price of each Option held by you (whether or not then fully exercisable), and (2) the number of Common Shares covered by each such Option;
(e) in lieu of Common Shares issuable upon the lapse of restrictions, if any, granted to you under the Company's stock incentive plans or any successor or substitute plan(s) thereto, the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) or the highest per share price for Common Shares actually paid in connection with any Change in Control, whichever is greater (such price, the "Price"), and (2) the number of Common Shares granted to you subject to such restrictions;
(1) all outstanding performance units awarded to you under the Company's stock incentive plans, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the amount you would have earned at a 100% target award valuation; and (2) all outstanding unrestricted stock awarded to you under such plan, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the product of (A) the number of cancelled unrestricted shares and (B) the Price.
(g) the Company shall provide you with a cash allowance, at the time specified in Subsection (v), for outplacement counselor and job search activities in the amount of twenty percent (20%) of your annual salary and target bonus as in effect on the Date of Termination but not to exceed a maximum allowance of $100,000; and the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”to any payment or benefit provided hereunder);
(dh) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident life and health insurance benefits and perquisites substantially similar to those which you were receiving immediately prior to the change in control Notice of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate paymentsTermination. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (dh) to the extent that a similar if an equivalent benefit is actually received by you from a subsequent employer during such the thirty-six (36) month periodperiod following your termination, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), the Company shall pay to you, in lieu of amounts which may otherwise be payable to you under any bonus plan (a "Bonus Plan"), an amount in cash equal to (1) your annual target bonus for the expenses incurred year in which the Change in Control occurs, multiplied by a fraction, (A) the numerator of which equals the number of full or partial days in such annual performance period during which you were employed by the Company and (B) the denominator of which is 365, and (2) the entire target bonus opportunity with respect to each performance period in progress under all other Bonus Plans in effect at the time of termination; and
(j) starting at age fifty-five (55) you shall receive retiree medical and life benefits from the Company. Such benefits shall be no less favorable than the benefits that you would have received had you, at the time Notice of Termination is given, both (1) attained age fifty-five (55) and (2) retired from the Company. Notwithstanding the foregoing, any benefit described in the preceding sentence shall constitute secondary coverage with respect to retiree medical and life benefits actually received by you in connection with such relocation any subsequent employment (including expenses incurred in selling or self-employment) following your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsetermination.
(iv) Notwithstanding anything in this Agreement to In the contrary, whether or not event that you become entitled to the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Code, (or any similar federal, state or local tax that may hereafter be imposed), the Company shall pay to you at the time specified in Subsection (v) below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and Excise Tax upon the payment provided for by this subsection, shall be equal to the Total Payments. For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payment payments or benefit benefits received or to be received by you in connection with a change Change in control of the Company Control or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person Person whose actions result in a change Change in control of the Company Control or any person Person affiliated with the Company or such personPerson) (collectively which, together with the Severance Payments, “constitute the "Total Payments”") would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that treated as "parachute payments" within the amount meaning of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes , and all "excess parachute payments" within the meaning of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there section 280G(b)(1) shall be taken into account any treated as subject to the Excise Tax that would be imposed Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and all federalacceptable to you such other payments or benefits (in whole or in part) do not constitute parachute payments, state and local taxes required to be paid or borne by you such excess parachute payments (in respect whole or in part) represent reasonable compensation for services actually rendered within the meaning of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (ivsection 280G(b)(4) (including application and interpretation of the Code in excess of the base amount within the meaning of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (b) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (1) the total amount of the Total Payments and related regulatory(2) the amount of excess parachute payments within the meaning of section 280G(b)
(1) (after applying clause (a), administrative above), and judicial authorities, (c) the value of any non-cash benefits or any deferred payment payments or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection principles of section as 280G(d) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company within ten (10) days after the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then at the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) within ten (10) days after the time that the amount of such excess or shortfall is finally determined.
(v) The payments provided for in Subsections (iii)(b), (d), (e), (f), (g) and (i) shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change in control of the Company, as defined by Subsection 2(i), upon termination of your employment or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) benefits: During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation benefits payable to you under the Company's disability plan or program or ’s Salary Continuation Program, together with all other similar plan compensation payable to you during such period, until this Agreement is terminated pursuant to Section 3(ii3(i) hereof. Thereafter, or in the event your employment shall be terminated by the Company or by you for Retirement, or by reason of your death, your benefits shall be determined under the Company's ’s retirement, insurance and other compensation plans and programs then in effect in accordance with the terms of such programs.
(ii) . If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, Disability, death or Retirement, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) . If your employment by the Company should shall be terminated (a) by the Company other than for Cause Cause, Retirement or Disability or if (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(a) : the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) , except as otherwise provided below; in lieu of any further (i) salary payments to you for periods subsequent to the Date of TerminationTermination or (ii) payments to you under the Company’s Salary Continuation Program, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs (d), (e) and (f) below, the “Severance Payments”) equal to three two (32) times the sum of (1) the greater of (ix) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change occurrence of the circumstance giving rise to the Notice of Termination given in control respect thereof, and (y) a full annual bonus payment (without regard to actual attainment of all relevant performance goals) calculated by using the Executive Annual Compensation Plan Target Percentages found in section "J" of such plan, as amended on June 22, 2000, times your base salary referenced in (x), above ; in lieu of shares of common stock of the Company ("Company Shares") issuable upon exercise of outstanding options ("Options") or any related stock appreciation rights ("Rights"), if any, granted to you under the Long-Term Incentive Program (which Options and (2) Rights shall be canceled upon the greater making of the payment referred to below), you shall receive an amount in cash equal to the product of (i) the average excess of the last three (3) annual bonuses (annualized in higher of the case closing price of any bonus paid with respect to a partial year) paid to you preceding the Company’s Shares as reported on the New York Stock Exchange-Composite Tape on or nearest the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;
(c) the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, including all such fees and expensesor, if anynot listed on such exchange, incurred on the nationally recognized exchange or Quotation System on which trading volume in contesting Company Shares is highest) or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred the highest per share price for Company Shares actually paid in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes , over the per share exercise price of section 409A each Option or Right held by you (whether or not then fully exercisable), times (ii) the number of Company Shares covered by each such Option or Right; and an amount in cash equal to the Code, sum of (i) the right present value of your accrued benefit (determined by using the ongoing actuarial assumptions in effect immediately prior to your Date of Termination under the Company’s defined benefit plan in which you are a series of monthly installment payments participant) under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, any Pension Plans or other defined benefit plan sponsored by the Company shall not provide and (ii) your account balance under any benefit otherwise receivable defined contribution plan sponsored by you pursuant to this paragraph (d) the Company, in either case to the extent that a similar such accrued benefit is actually received by you from a subsequent employer during such thirty-six (36) month periodor account balance, and any such benefit actually received by you as the case may be, shall not be reported to fully vested at the Company;
(e) in time of your Date of Termination. In addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company Pension Plan or any of its subsidiaries (collectively, the “Plans”)successor plans thereto, the Company shall pay to you a lump sumsum amount, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (ix) the retirement pension (determined as a straight life annuity commencing at age 65Normal Retirement Age or, if later, two years after the Date of Termination) which you would have accrued under the terms of the Plans Pension Plan (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans Pension Plan made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company accumulated (after the Date of Termination) for three twenty-four (324) additional years and as if you had accumulated three additional calendar years months of service credit thereunder at your highest annual rate of compensation during the twelve (for purposes 12) months immediately preceding the Date of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereofTermination, over (iiy) the vested retirement pension (determined as a straight life annuity commencing at age 65), Normal Retirement Age which you had then accrued pursuant to the provisions of the PlansPension Plan). For the purposes of this paragraph (eSection 4(iii)(E), “the actuarial equivalent” value of the retirement benefits shall be determined calculated as the present value of a single life annuity using the same methods and assumptions UP 1984 mortality table adjusted one year forward. The interest rate used to calculate in the calculation shall be the rate specified for purposes of determining the present value of lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control section 417(e)(3) of the Code established for the second month preceding the date of your termination. The payments provided for in paragraphs (B), (C) and (D), above, shall be made not later than the fifth day following the Date of Termination, and the payment described in (E) not later than the fifth day following the date of your election, under Section 4(iii)(G)(1) to receive such payment, provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined in good faith by the Company;
, of the minimum amount of such payments and shall pay the remainder of such payments (ftogether with interest at the rate provided in Section 1274(b)(2)(B) should you move your residence of the Code) as soon as the amount thereof can be determined but in order to pursue other business opportunities within one (1) year no event later then the thirtieth day after the Date of Termination, . In the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so event that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal estimated payments exceeds the amount of the Total Paymentssubsequently determined to have been due, reduced such excess shall constitute a loan by the minimum amount necessary Company to prevent any portion of you, payable on the Total Payments from being a “parachute payment” as defined fifth day after demand by the Company (together with interest at the rate provided in section 280G(b)(2Section 1274(b)(2)(B) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount of such excess or shortfall is finally determined (a) to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Code.
Appears in 1 contract
Sources: Special Severance Agreement (Carpenter Technology Corp)
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illnessillness or disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated (i) by the Company other than for Cause or Disability or Disability, (ii) if you should terminate your employment for Good ReasonReason or (iii) your employment terminates due to the expiration of your employment agreement, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with in addition to the payments provided in paragraphs (c), (d), (e), (f), (g), (h), (i) and (fj) below, the “"Severance Payments”") equal to three (3) times the sum of (1) 300% of the greater of (iA) your annual rate of base salary in effect on the Date of Termination or (iiB) your annual rate of base salary in effect immediately prior to the change Change in control of the Company Control, and (2) the greater of (iX) the average 300% of the last three (3) annual bonuses (annualized in the case of any your guideline bonus paid with respect to a partial year) paid to you preceding the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change the Change in control occursControl occurs and (Y) $2,100,000;
(c) you shall immediately vest in your benefits under the Supplemental Executive Benefit Plan and your annual base salary and guideline bonus (as taken into account under the first half of this Subsection (iii)(b)) shall count for three years additional credited service and be included in final average earnings calculations for participants in the Company's Retirement Account Plan, Supplemental Executive Benefit Plan, Pension Benefit Equalization Plan and any successor or substitute plans thereto, a sample calculation of which appears in Exhibit A to this Agreement;
(d) in lieu of shares of common stock of the Company ("Common Shares") issuable upon exercise of outstanding options (other than options qualifying as incentive stock options ("ISOs") under Section 422A of the Internal Revenue Code of 1986 (the "Code") which ISOs were granted on or before the date hereof) ("Options"), and stock appreciation rights ("SARs"), if any, granted to you under the Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any successor or substitute plans thereto (except those SARs applicable to ISOs granted on or before the date hereof) (which Options shall be cancelled upon the making of the payment referred to below), the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the excess of, in the case of an ISO granted after the date hereof, the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) and, in the case of all other Options, the higher of such closing price or the highest per share price for Common Shares actually paid in connection with any Change in Control, over the per share option price of each Option held by you (whether or not then fully exercisable), and (2) the number of Common Shares covered by each such Option;
(e) in lieu of Common Shares issuable upon the lapse of restrictions, if any, granted to you under the Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any successor or substitute plan(s) thereto, the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) or the highest per share price for Common Shares actually paid in connection with any Change in Control, whichever is greater (such price, the "Price"), and (2) the number of Common Shares granted to you subject to such restrictions;
(1) all outstanding performance units awarded to you under the Company's 1998 Key Employees' Stock Incentive Plan, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the amount you would have earned at a 100% target award valuation; and (2) all outstanding unrestricted stock awarded to you under such plan, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the product of (A) the number of cancelled unrestricted shares and (B) the Price;
(g) the Company shall provide you with a cash allowance, at the time specified in Subsection (v), for outplacement counseling and job search activities in the amount of 20% of your annual salary and guideline bonus as in effect on the Date of Termination but not to exceed a maximum allowance of $100,000; and the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”to any payment or benefit provided hereunder);
(dh) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident life and health insurance benefits and perquisites substantially similar to those which you were receiving immediately prior to the change in control Notice of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate paymentsTermination. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (dh) to the extent that a similar if an equivalent benefit is actually received by you from a subsequent employer during such the thirty-six (36) month periodperiod following your termination, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), the Company shall pay to you, in lieu of amounts which may otherwise be payable to you under any bonus plan (a "Bonus Plan"), an amount in cash equal to (1) your annual target bonus for the expenses incurred year in which the Change in Control occurs, multiplied by a fraction, (A) the numerator of which equals the number of full or partial days in such annual performance period during which you were employed by the Company and (B) the denominator of which is 365, and (2) the entire target bonus opportunity with respect to each performance period in progress under all other Bonus Plans in effect at the time of termination; and
(j) you shall receive retiree medical and life benefits from the Company. Such benefits shall be no less favorable than the benefits that you would have received had you, at the time Notice of Termination is given, both (1) attained age 55 and (2) retired from the Company. Notwithstanding the foregoing, any benefit described in the preceding sentence shall constitute secondary coverage with respect to retiree medical and life benefits actually received by you in connection with such relocation any subsequent employment (including expenses incurred in selling or self-employment) following your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapsetermination.
(iv) Notwithstanding anything in this Agreement to In the contrary, whether or not event that you become entitled to the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Code, (or any similar federal, state or local tax that may hereafter be imposed), the Company shall pay to you at the time specified in Subsection (v) below, an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income tax and Excise Tax upon the payment provided for by this subsection, shall be equal to the Total Payments. For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax and the amount of such Excise Tax, (a) any other payment payments or benefit benefits received or to be received by you in connection with a change Change in control of the Company Control or the your termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person Person whose actions result in a change Change in control of the Company Control or any person Person affiliated with the Company or such personPerson) (collectively which, together with the Severance Payments, “constitute the "Total Payments”") would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that treated as "parachute payments" within the amount meaning of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes , and all "excess parachute payments" within the meaning of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there section 280G(b)(1) shall be taken into account any treated as subject to the Excise Tax that would be imposed Tax, unless in the opinion of tax counsel selected by the Company's independent auditors and all federalacceptable to you such other payments or benefits (in whole or in part) do not constitute parachute payments, state and local taxes required to be paid or borne by you such excess parachute payments (in respect whole or in part) represent reasonable compensation for services actually rendered within the meaning of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (ivsection 280G(b)(4) (including application and interpretation of the Code in excess of the base amount within the meaning of section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (b) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (1) the total amount of the Total Payments and related regulatory(2) the amount of excess parachute payments within the meaning of section 280G(b)
(1) (after applying clause (a), administrative above), and judicial authorities, (c) the value of any non-cash benefits or any deferred payment payments or benefit) with the assistance of tax counsel selected benefit shall be determined by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by in accordance with the Company, the benefits payable pursuant to Subsection principles of sections 280G(d) (iii) shall be reduced in the following order: (b), (e), (f), (c), (d3) and (g)4) of the Code. The Company For purposes of determining the amount of the Gross-Up Payment, you shall provide you with a reasonable opportunity be deemed to review pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and comment state and local income taxes at the highest marginal rate of taxation in the state and locality of your residence on the Company's calculations Date of Termination, net of the Capped Payment Amountmaximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), In the Capped Payment Amount is, at any time and from time to time, event that the Excise Tax is subsequently determined to be greater or less than the amount determined taken into account hereunder at the time of termination of your employment, you shall repay to the Company within ten (10) days after the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by you if such repayment results in a reduction in Excise Tax and/or a federal and state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then at the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) within ten (10) days after the time that the amount of such excess or shortfall is finally determined.
(v) The payments provided for in Subsections (iii)(b), (d), (e), (f), (g) and (i) shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(h) and (iii)(j) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits described below during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement. The benefits to which you are entitled, subject to the terms and conditions of this Agreement, are:
(i) During any period that during which you fail to perform your full-time duties with the Company Corporation as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the CompanyCorporation's disability plan or program or other similar plan during such period, until this Agreement is terminated by the Corporation pursuant to Section 3(ii) hereofhereof or by you. Thereafter, or in the event your employment shall be is terminated by reason of your death, your benefits shall be determined under the CompanyCorporation's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company Corporation for Cause or by you other than for Good Reason, the Company Corporation shall pay you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company Corporation at the time such payments are due, and the Company Corporation shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should Corporation shall be terminated by you for Good Reason or by the Company Corporation other than for Cause or Disability or if you should terminate your employment for Good Reason(including Disability), then you shall be entitled to the benefits provided below:
(a) the Company Corporation shall pay to you your full base salary salary, when due, through the Date of Termination at the rate in effect at the time Notice of Termination is given given, at the time specified in Section 4(v), plus all other amounts to which you are entitled under any compensation plan of the Company, Corporation at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company Corporation shall pay as severance pay to you, at the time specified in Subsection (vSection 4(v), a lump sum severance payment (together with the payments provided in paragraphs (d), (eSections 4(iii)(c) and (fd) below, the “"Severance Payments”") equal to three (3) times the sum 200% of (1) the greater of (i) your annual rate of base salary as in effect on as of the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change Change in control Control, whichever is greater and without regard to whether you have been employed by the Corporation or any of its subsidiaries for at least 12 consecutive months, and 200% of the Company average of the annual bonuses awarded to you pursuant to the Corporation's bonus plan(s) for executive officers, or any successor bonus plan(s) thereto, with respect to the three fiscal years preceding the Date of Termination; provided January 15, 2002 that if you shall not have been continuously employed by the Corporation or any of its subsidiaries for the preceding three full fiscal years, such average annual bonuses shall be determined based on the aggregate of all bonuses paid to you with respect to any of such three fiscal years and the actual period of your employment through the end of the preceding fiscal year (2stated in years, including a fraction thereof); and provided further that if no bonuses shall have been paid to you with respect to the preceding fiscal year, such bonuses (for purposes of computing both the average annual bonuses and the aggregate amount of Severance Payments) shall be the greater of (ix) the average of the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid award to you preceding for such fiscal year, if any, theretofore approved by the Date Corporation's Board of Termination Directors or a duly constituted committee thereof, (iiy) your target bonus under for such fiscal year, stated as a percentage of your base annual salary, theretofore approved by the CompanyCorporation's executive performance compensation plans Board of Directors or a duly constituted committee thereof, or (z) your current annual salary multiplied by the highest percentage that your bonuses represented in which you participate for relation to your base annual salary with respect to either of the year in which such change in control occurs;first two of the three preceding fiscal years.
(c) the Company Corporation shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any as set forth in Section 10 of this Agreement); and
(d) for a twenty-four (24) month period after such fees or expenses incurred in connection termination, the Corporation shall arrange to provide you with any such claim which is determined life, disability, accident and group health insurance benefits substantially similar to those that you were receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by you pursuant to this Section 4(iii)(d) shall be frivolous) or in connection with any tax audit or proceeding reduced to the extent attributable comparable benefits are actually received by you during the twenty-four (24) month period following your termination, and any such benefits actually received by you shall be reported to the application Corporation.
(iv) The payments provided for in Section 4(iii)(a) shall be made not later than the fifth day following the Date of Termination. The payments provided for in Sections 4(iii)(b), (c) and (d) shall be made not later than the thirtieth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined on or before such day, the Corporation shall pay to you on such day an estimate, as determined in good faith by the Corporation, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in section 4999 1274(b)(2)(B) of the Internal Revenue Code of 1986, as amended (the “"Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”"), as soon as the Company shall pay you a lump sum, amount thereof can be determined but in cash, equal to no event later than the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (thirtieth day after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to . In the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so event that the amount of the Total Payments, as so reduced, is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal estimated payments exceeds the amount of the Total Paymentssubsequently determined to have been due, reduced such excess shall constitute a loan by the minimum amount necessary Corporation to prevent any portion of you, payable on the Total Payments from being a “parachute payment” as defined fifth day January 15, 2002 after demand by the Corporation (together with interest at the rate provided in section 280G(b)(21274(b)(2)(B) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there ).
(v) You shall not be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than mitigate the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence provided for in this Section 4 by seeking other employment or amount of which cannot be determined at the timeotherwise nor, except as provided in Section 4(iii)(d), then at the time that shall the amount of such excess any payment or shortfall is finally determined (a) benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer or self-employment, by retirement benefits, by offset against any amount claimed to be owed by you to the extent the Capped Payment Amount is determined to be greaterCorporation, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codeor otherwise.
Appears in 1 contract
Compensation Upon Termination or During Disability. Following a change Change in control of the CompanyControl, you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company's disability plan or program or other similar plan during such period, until this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter, or in the event your employment shall be terminated by reason of your death, your benefits shall be determined under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause or by you other than for Good Reason, the Company shall pay you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which you are entitled under any compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should be terminated by the Company other than for Cause or Disability or if you should terminate your employment for Good Reason, you shall be entitled to the benefits provided below:
(a) the Company shall pay to you your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given given, no later than the fifth day following the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;
(b) in lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), a lump sum severance payment (together with in addition to the payments provided in paragraphs (c), (d), (e), (f), (g), (h) and (fi) below, the “"Severance Payments”") equal to three (3) times the sum of (1) 200% of the greater of (iA) your annual rate of base salary in effect on the Date of Termination or (iiB) your annual rate of base salary in effect immediately prior to the change Change in control Control, and (2) 200% of your guideline bonus with respect to the year in which the Change in Control occurs; your annual base salary and guideline bonus (as taken into account under the first half of this Subsection (iii)(b)) shall count for two years additional credited service and be included in final average earnings calculations for participants in the Company's Retirement Account Plan, Supplemental Executive Retirement Plan, Pension Benefit Equalization Plan and any successor or substitute plans thereto, a sample calculation of which appears in Exhibit A to this Agreement;
(c) Plan or any successor or substitute plans thereto (except those SARs applicable to ISOs granted on or before the date hereof) (which Options shall be cancelled upon the making of the payment referred to below), the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (1) the excess of, in the case of an ISO granted after the date hereof, the closing price of Common Shares as reported on the New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) and, in the case of all other Options, the higher of such closing price or the highest per share price for Common Shares actually paid in connection with any Change in Control, over the per share option price of each Option held by you (whether or not then fully exercisable), and (2) the greater number of Common Shares covered by each such Option;
(d) in lieu of Common Shares issuable upon the lapse of restrictions, if any, granted to you under the Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any successor or substitute plan(s) thereto, the Company shall pay to you, at the time specified in Subsection (v), an amount in cash equal to the product of (i1) the average closing price of Common Shares as reported on the last three (3) annual bonuses (annualized in the case of any bonus paid with respect to a partial year) paid to you preceding New York Stock Exchange on or nearest the Date of Termination (or, if not listed on such exchange, on a nationally recognized exchange or quotation system on which trading volume in the Common Shares is highest) or the highest per share price for Common Shares actually paid in connection with any Change in Control, whichever is greater (iisuch price, the "Price"), and (2) your target bonus the number of Common Shares granted to you subject to such restrictions;
(1) all outstanding performance units awarded to you under the Company's executive performance compensation plans in which 1998 Key Employees' Stock Incentive Plan, whether or not vested, shall be cancelled, and you participate for shall receive a cash payment equal to the year in which amount you would have earned at a 100% target award valuation; and (2) all outstanding unrestricted stock awarded to you under such change in control occursplan, whether or not vested, shall be cancelled, and you shall receive a cash payment equal to the product of (A) the number of cancelled unrestricted shares and (B) the Price;
(cf) to exceed a maximum allowance of $50,000; and the Company shall pay to you all legal fees and expenses incurred by you as a result of such termination, termination (including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”to any payment or benefit provided hereunder);
(dg) for a thirtytwenty-six four (3624) month period after such termination, the Company shall arrange to provide you with life, accident life and health insurance benefits and perquisites substantially similar to those which you were receiving immediately prior to the change in control Notice of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate paymentsTermination. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (dg) to the extent that a similar if an equivalent benefit is actually received by you from a subsequent employer during such thirtythe twenty-six four (3624) month periodperiod following your termination, and any such benefit actually received by you shall be reported to the Company;
(eh) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), the Company shall pay to you, in lieu of amounts which may otherwise be payable to you under any bonus plan (a "Bonus Plan"), an amount in cash equal to (1) your annual target bonus for the expenses incurred year in which the Change in Control occurs, multiplied by a fraction, (A) the numerator of which equals the number of full or partial days in such annual performance period during which you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed employed by the Company and (B) the denominator of which is 365, and (2) the entire target bonus opportunity with respect to transferred Employees prior to each performance period in progress under all other Bonus Plans in effect at the change in control time of the Company) and which are not reimbursed by another employertermination; and
(gi) all options starting at age 55, you shall receive retiree medical and stock appreciation rights to purchase or acquire shares of Common Stock of life benefits from the Company held by Company. Such benefits shall be no less favorable than the benefits that you immediately prior to would have received had you, at the Date time Notice of Termination is given, both (1) attained age 55 and (2) retired from the Company. Notwithstanding the foregoing, any benefit described in the preceding sentence shall become exercisable in full, whether or not otherwise exercisable in accordance constitute secondary coverage with the terms of the employee benefit plans pursuant respect to which such options retiree medical and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapse.
(iv) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be life benefits actually received by you in connection with a change in control of the Company or the termination of your any subsequent employment (whether pursuant to or self-employment) following your termination.
(1) days after the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would be subject to the tax (the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so time that the amount of such reduction in Excise Tax is finally determined the Total Payments, as so reduced, is equal portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Capped Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment Amount (as defined below), but only being repaid by you if after such repayment results in a reduction you would receive in Excise Tax and/or a greater after-federal and state and local income tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal deduction) plus interest on the amount of such repayment at the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined rate provided in section 280G(b)(21274(b)(2)(B) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from In the Capped Payment Amount than from event that the unreduced Total Payments, there shall be Excise Tax is determined to exceed the amount taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid or borne by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g). The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of the termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the timetime of the Gross-Up Payment), then at the Company shall make an additional gross-up payment in respect of such excess (plus any interest payable with respect to such excess) within ten (10) days after the time that the amount of such excess or shortfall is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d), (e), (f) and (h) shall be made not later than the fifth day following the Date of Termination; provided, however, that if the amounts of such payments cannot be finally determined (a) to the extent the Capped Payment Amount is determined to be greateron or before such day, the Company shall make an additional payment pay to you equal to on such excessday an estimate, and (b) to as determined in good faith by the extent Company, of the Capped Payment Amount is determined to be less, you shall repay to the Company the minimum amount of such shortfall, in each case payments and shall pay the remainder of such payments (together with interest at the discount rate applicable under provided in section 280G(d)(41274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to you, payable on the fifth day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i) hereof, you shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.
Appears in 1 contract
Sources: Change in Control Agreement (Dun & Bradstreet Corp /De/)
Compensation Upon Termination or During Disability. Following a change in control Change of Control, as defined by Section 2 hereof, upon termination of your employment within 2 years after the Company, occurrence of such Change of Control or during a period of Disability you shall be entitled to the following benefits during a period of disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreementbenefits:
(i) During any period that you fail to perform your full-time duties with the Company as a result of incapacity due to physical or mental illness, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation amounts payable to you under any compensation plan of the Company's disability plan or program or other similar plan Company during such period, until this Agreement is terminated pursuant to Section 3(iiSubsection 3(i) hereof. Thereafter, or in the event your employment shall be terminated by you other than for Good Reason or by reason of your death, your benefits shall be determined under the Company's retirement, ’s insurance and or other compensation programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Company for Cause Cause, Disability or death, or by you other than for Good Reason, the Company shall shall, to the extent not theretofore paid, pay you in a lump sum your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is givengiven within 10 business days of the Date of Termination, plus all other amounts to which you are entitled under any insurance and other compensation plan programs of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company should shall be terminated (a) by the Company other than for Cause or Cause, Disability or if death or (b) by you should terminate your employment for Good Reason, then you shall be entitled to the benefits provided below:
(aA) The Company shall, to the Company shall extent not theretofore paid, pay to you in a lump sum your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given within 10 business days of the Date of Termination, plus all other amounts to which you are entitled under any compensation plan of the Company, at the time such payments are due;, except as otherwise provided below.
(bB) in In lieu of any further salary payments to you for periods subsequent to the Date of Termination, the Company shall pay as severance pay to you, at the time specified in Subsection (v), you a lump sum severance payment (together with the payments provided in paragraphs paragraph (dC) of this Subsection 4(iii), (e) and (f) below, the “Severance Payments”) equal to three (3) times the sum of (1) the greater of (ia) your annual rate of base salary in effect on the Date of Termination or (ii) your annual rate of base salary in effect immediately prior to the change in control occurrence of the Company circumstance giving rise to the Notice of Termination given in respect thereof, and (2b) 100% of your target bonus amount established pursuant to the greater of (i) compensation or bonus plan in effect immediately prior to the average occurrence of the last three (3) annual bonuses (annualized in circumstance giving rise to the case Notice of any bonus paid with respect to a partial year) paid to you preceding Termination. The Severance Payments shall be made within 10 business days of the Date of Termination or (ii) your target bonus under the Company's executive performance compensation plans in which you participate for the year in which such change in control occurs;Termination.
(cC) the The Company shall pay to you any deferred compensation, including but not limited to deferred bonuses, allocated or credited to you as of the Date of Termination.
(D) The Company shall also pay to you all legal fees and expenses incurred by you prior to December 31 of the second calendar year following the calendar year that includes the Date of Termination as a result of such termination, termination including all such fees and expenses, if any, incurred in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement (other than any such fees or expenses incurred in connection with any such claim which is determined to be frivolous) or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”);
(d) for a thirty-six (36) month period after such termination, the Company shall arrange to provide you with life, accident and health insurance benefits substantially similar to those which you were receiving immediately prior to the change in control of the Company. For purposes of section 409A of the Code, the right to a series of monthly installment payments under this paragraph (d) shall be treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by you pursuant to this paragraph (d) to the extent that a similar benefit is actually received by you from a subsequent employer during such thirty-six (36) month period, and any such benefit actually received by you shall be reported to the Company;
(e) in addition to the retirement benefits to which you are entitled under the qualified pension plan(s) and any supplemental or excess benefit pension plan(s) maintained by the Company or any of its subsidiaries (collectively, the “Plans”), the Company shall pay you a lump sum, in cash, equal to the actuarial equivalent of a straight life annuity equal to the excess of (i) the retirement pension (commencing at age 65) which you would have accrued under the terms of the Plans (without regard to the limitations imposed by section 401(a)(17) of the Code or any amendment to the Plans made subsequent to a change in control of the Company and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of retirement benefits thereunder), determined as if you were fully vested thereunder and had continued to be employed by the Company (after the Date of Termination) for three (3) additional years and as if you had accumulated three additional calendar years of compensation (for purposes of determining your pension benefits thereunder), each in an amount equal to the amount determined under clause (i) of Subsection (iii)(b) hereof, over (ii) the vested retirement pension (commencing at age 65), which you had then accrued pursuant to the provisions of the Plans. For purposes of this paragraph (e), “actuarial equivalent” shall be determined using the same methods and assumptions used to calculate lump sum distributions under the Precision Castparts Corp. Retirement Plan immediately prior to the change in control of the Company;
(f) should you move your residence in order to pursue other business opportunities within one (1) year after the Date of Termination, the Company will pay you, at the time specified in Subsection (v), an amount equal to the expenses incurred by you in connection with such relocation (including expenses incurred in selling your home to the extent such expenses were customarily reimbursed by the Company to transferred Employees prior to the change in control of the Company) and which are not reimbursed by another employer; and
(g) all options and stock appreciation rights to purchase or acquire shares of Common Stock of the Company held by you immediately prior to the Date of Termination shall become exercisable in full, whether or not otherwise exercisable in accordance with the terms of the employee benefit plans pursuant to which such options and stock appreciation rights were granted, and all restrictions on any restricted stock held by you shall lapseAgreement.
(ivE) Notwithstanding anything in this Agreement to the contrary, whether or not you become entitled to the Severance Payments, if any of the Severance Payments or any other payment or benefit received or to be received by you in connection with a change in control of the Company or the termination of your employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change in control of the Company or any person affiliated with the Company or such person) (collectively with the Severance Payments, “Total Payments”) would Taxes - All payments shall be subject to the tax (withholding of such amounts as the “Excise Tax”) imposed by section 4999 of the Code (or any similar tax that may hereafter be imposed), the Total Payments payable to you pursuant to this Agreement shall be reduced so that the amount of the Total Payments, as so reduced, Company is equal to the Capped Payment Amount (as defined below), but only if after such reduction you would receive a greater after-tax benefit than if you had been paid the full amount of the Total Payments. The “Capped Payment Amount” shall equal the amount of the Total Payments, reduced by the minimum amount necessary to prevent any portion of the Total Payments from being a “parachute payment” as defined in section 280G(b)(2) of the Code. For purposes of determining whether you would receive a greater after-tax benefit from the Capped Payment Amount than from the unreduced Total Payments, there shall be taken into account any Excise Tax that would be imposed and all federal, state and local taxes required to be paid withheld pursuant to any applicable federal, state, or borne local law or regulation, and you are responsible for any tax liability on such payments.
(F) All payments under this Agreement will be contingent upon the execution of a Release of Claims by you in respect of the receipt of such payments. The Company shall make all calculations and determinations under this Subsection (iv) (including application and interpretation of the Code and related regulatory, administrative and judicial authorities, the value of any non-cash benefits or any deferred payment or benefit) with the assistance of tax counsel selected by the Company's independent auditors and reasonably acceptable to you; provided, however, that unless otherwise determined by the Company, and this Release of Claims shall govern the benefits payable pursuant to Subsection (iii) shall be reduced in the following order: (b), (e), (f), (c), (d) and (g)timing of all payments made. The Company shall provide you with a reasonable opportunity to review and comment on the Company's calculations A copy of the Capped Payment Amount. If, after payment of any reduced amount under this Agreement as a result of application of this Subsection (iv), the Capped Payment Amount is, at any time terms and from time to time, subsequently determined to be greater or less than the amount determined hereunder at the time of termination of your employment (including by reason of any payment the existence or amount of which cannot be determined at the time), then at the time that the amount conditions of such excess or shortfall Release of Claims is finally determined (a) attached as an appendix to the extent the Capped Payment Amount is determined to be greater, the Company shall make an additional payment to you equal to such excess, and (b) to the extent the Capped Payment Amount is determined to be less, you shall repay to the Company the amount of such shortfall, in each case with interest at the discount rate applicable under section 280G(d)(4) of the Codethis Agreement.
Appears in 1 contract
Sources: Change of Control Agreement (Apex Silver Mines LTD)