Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination: (a) During any period that the Executive fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him under this Agreement at the rate in effect at the commencement of any such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement. (b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year. (c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"): (i) The Company shall pay to the Executive 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 he is entitled under any compensation plan of the Company, in each case at the time such payments are due; (ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year; (iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination; (iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him. (d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions. (e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 1 contract
Sources: Employment Agreement (Zenith National Insurance Corp)
Compensation Upon Termination or During Disability. The Executive (i) Upon Vercillo's death, the Corporation shall be entitled pay to the following benefits during person ▇▇▇▇gnated by Consultant in a notice filed with the Corporation or, if no person is designated, to Vercillo's estate as a lump sum death benefit, Consu▇▇▇▇▇'▇ ▇▇ll compensation for a period of disabilitysix (6) months after the date of Vercillo's death. Upon full payment of amounts requi▇▇▇ ▇▇ ▇▇ paid under this subsection, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:Corporation shall have no further obligation under this Agreement.
(aii) During any period that the Executive Vercillo fails to perform his full-time duties with the Company as under this Agre▇▇▇▇▇ ▇▇ a result of incapacity due to physical or mental illness, injury or similar incapacity, he Consultant shall continue to receive his its full compensation and other benefits payable to him under this Agreement at until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyConsultant's disability plan or program or other similar plan during such period, or under any governmental program, until his employment relationship is terminated pursuant to Section 9(a7(ii) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions or until Consultant shall receive a lump sum of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementsix months' compensation.
(biii) If at any time the ExecutiveConsultant's employment shall be retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement. In addition, .
(iv) If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii) (b) or his appropriate payee7 (iii) shall be entitled (c) (it being understood that a purported termination pursuant to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in Sections 7(iii) (b) or 7(iii) (c) which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) In the event of a Change in Control as defined in Section 7(iv), the Corporation shall pay Consultant, in a lump sum, an amount equal to the greater of (a) twice the amount then due through the end of the Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined in Section 7(iv) above, the total number of outstanding unexercised options (warrants) granted to Consultant under this Agreement as well as any previous employment, consultant or other agreements, shall be doubled in quantity while retaining the original exercise price.
(4) The Company Corporation shall pay all reasonable legal fees and expenses incurred by Consultant in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit in this Agreement.
(v) Unless the ExecutiveConsultant is terminated for Cause, at the time such payments would have been made had Corporation shall maintain in full force and effect, for the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed benefit of Consultant for the greater of (x) the remaining Term term of this Agreement or eighteen (y18) two years (the "Severance Period") (assuming for the purpose months after termination of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)this Agreement, plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been all health and hospitalization plans and programs in which Consultant was entitled to a bonus equal participate in immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as defined in Section 4 of this Agreement, provided that Consultant's continued participation is possible under the general terms and provisions of the Date of Termination;
(iv) During plans and programs. If Consultant's participation in any plan or program is barred, the Severance Period the Company shall, at its cost, Corporation shall arrange to provide the Executive Consultant with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit which Consultant would otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes have been entitled to receive under the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) plan and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments program from which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment his continued participation is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedbarred.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of her death, the Employer shall pay to such person as she shall designate in a notice filed with the Employer, or if no such person shall be designated, to her estate as a lump sum benefit, her full Salary to the date of her death in addition to any payments the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time her duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation her Salary and other benefits payable to him under this Agreement at compensation until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration Sections 6.2 of this Agreement, not withstanding or until the provisions Employee terminates her employment pursuant to Section 6.4(a) of this Agreement, whichever first occurs.
(c) After termination by Employer without Cause or pursuant to Section 206.2 of this Agreement or termination by Employee pursuant to Section 6.4 of this Agreement, his pay the Employee shall cease and his benefitsbe paid, if anyin one lump sum, shall, be determined solely under the Company's retirement, insurance 100% of her Salary and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
benefits set forth in Sections 4(a) and (b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofc), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding one year.
(cd) If the ExecutiveEmployee's employment should shall be terminated by for Cause, the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive his Employee her full base salary Salary and other compensation through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus all other amounts to which he and the Employer shall, assuming the Employer is entitled under any compensation plan of in compliance with the Company, in each case at the time such payments are due;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term provisions of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)Agreement, plus any bonus that would otherwise have been payable to the Executive no further obligations with respect to the Severance Period; providedSection 3 of this Agreement, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and but all other similar rights theretofore granted obligations of the Employer under this Agreement, including the obligations to indemnify, defend and hold harmless the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreementsEmployee, shall vest and shall then be exercisable remain in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissionseffect.
(e) Notwithstanding anything The Employee shall not be required to mitigate the amount of any payment provided for in this Section 9 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 9 be reduced by any compensation earned by the Employee as the result of employment by another employer or business or by profits earned by the Employee from any other source at any time before and after the Date of Termination. The amounts payable to Employee under this Agreement shall not be treated as damages but as severance compensation to which Employee is entitled by reason of her employment in the circumstances contemplated by this Agreement.
(f) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement, in form and reasonably substance satisfactory to the contrary Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Employer in the same amount and on the same terms as she would be entitled to hereunder if she terminated her employment within six months after a Change in Control, except for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in writing filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c6.4(c) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 60% of his appropriate payeeSalary, as determined in accordance with Section 12 (c) hereof) 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 amountsfor one year, if anyunless and except for any such amounts actually received by the Employee pursuant to the Company's long-term disability insurance program. To the extent physically and mentally capable of so doing without potentially impairing or damaging his health, the Employee shall provide consulting services to which the Employer during the period that he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such receiving payments are due, and the Company shall have no further obligations pursuant to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 9(b).
(c) If the ExecutiveEmployee's employment should shall be terminated for Cause or terminated by the Company other Employee without Good Reason prior to or more than for Cause or Disability or by twelve months after, a Change of Control, the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the Employee's employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), including as a result of a Change of Control, or (B) the Employee shall terminate his employment for Good Reason or at any time within twelve months after a Change of Control, then the Employer shall pay to the Employee:
(i) his full Salary through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable for periods subsequent to the Executive Date of Termination (in lieu of any further payments pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term Section 3 of this Agreement or Agreement), Severance Pay (y) two years (as hereinafter defined), payable on the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at tenth day following the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and follows: If the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable Employee's employment is terminated either by the Executive Employee for Good Reason or by the Employer other than pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer Sections 6.2 or source 6.3 hereof, at any time during the Severance Period. Executive agrees Initial Term or any Renewal Term or within twelve months after a Change of Control (provided that if the Change of Control is pursuant to report any such benefit actually received by him.
(dSection 6.4.2(b) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnificationthis Agreement, defense or hold-harmless of officers or directors of the Company that are in effect it is ascertainable on the date of such Termination that such Change of Control has occurred), a lump sum amount equal to (A) Salary (excluding any bonus or perquisites, such as health and life insurance and car allowance, etc). received by Employee received or earned by the Notice of Termination is sent Employee from the Employer during the twelve months prior to the Executive or the Company with respect to all of his acts Termination Date, multiplied by (B) two and omissions while an officer or director ninety-nine hundredths (if applicable2.99)) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.("Severance Pay")
(e) Notwithstanding anything In the event any excise tax is due on the Severance Pay, then the Severance Pay shall be increased so that the excise tax on the Severance Pay shall be paid as well as any income tax payable on such excise tax.
(f) The Employee shall as a condition to receiving any amounts under Section IX(d), provide the Employer with an acceptable form of release agreement, whereby the Employer is released from its obligations hereunder.
(g) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and substance satisfactory to the contrary Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Employer in the same amount and on the same terms as he would be entitled to under Section 9(d)(ii)(B) if he terminated his employment for Good Reason, except for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The (a) If the Executive’s employment shall be terminated by reason of his death, the Employer shall pay to such person as the Executive shall designate in writing filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments the Executive’s spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer’s obligations with respect to Section II of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to indemnify, defend and hold harmless the Executive's termination:, shall remain in effect.
(ab) During any period that the Executive fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Executive shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until his Executive’s employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 5.2 of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year.
(c) If the Executive's ’s employment should shall be terminated for Cause or terminated by the Company other than for Cause or Disability or by Executive, the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive his full base salary Salary (but excluding bonus or other compensation) through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section II of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, in each case at including the time such payments are due;
(ii) The Company shall pay obligations to indemnify, defend and hold harmless the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash remain in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by himeffect.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined.
Appears in 1 contract
Compensation Upon Termination or During Disability. (i) The Executive shall be entitled Consultant's employment will terminate immediately upon the Executive's death. If the Consultant becomes physically or mentally disabled so as to the following benefits during become unable for a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive fails more than three consecutive months to perform his the Consultant 's duties hereunder on a substantially full-time duties with basis, the Company Consultant 's employment will terminate as of the end of such three-month and this shall be considered a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him "disability" under this Agreement at Agreement. The Consultant agrees to submit to reasonable examination by a licensed physician selected by the rate in effect at the commencement Corporation to confirm existence or extent of any such period, less any amounts payable to him disability. Such termination shall not affect the Consultant 's benefits under the CompanyCorporation's disability plan or program or other similar plan during such period, or under any governmental insurance program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementeffect.
(bii) If at any time the Executive's employment shall be Consultant’s retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement. In addition, .
(iii) If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii) (b) or his appropriate payee7 (iii) shall be entitled (c) (it being understood that a purported termination pursuant to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in Sections 7(iii) (b) or 7(iii) (c) which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in In the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to as defined in Section 7(iv), the terms of this Agreement or any other planCorporation shall pay Consultant, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (whichlump sum, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the an amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) annual compensation. The Corporation shall continue to pay the total amount of premiums for the Total Payments or (B) Consultant’s benefit plans as indicated on Exhibit A for a period up to 18 months, as compensation for the amount of excess parachute payments within Consultant’s availability for consulting services as may be reasonably requested by the meaning of section 280G(b)(1) (after applying clause (i)Company. Thereafter, above)if the Consultant elects to continue coverage under COBRA guidelines then in effect, and (iii) the value of any non-cash benefits or any deferred payment or benefit premium shall be determined by Company's independent auditors paid in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid full by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedConsultant.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive fails Finl▇▇ ▇▇▇ls to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illnessillness ("disability period"), injury or similar incapacity, he shall Finl▇▇ ▇▇▇ll continue to receive his compensation and other benefits payable to him under this Agreement full salary at the rate then in effect at the commencement of any for such period, less any amounts payable period and all employment benefits due to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until Finl▇▇ ▇▇▇il his employment is terminated pursuant to Section 9(a) hereof. If7 above, during any provided that payments so made to Finl▇▇ ▇▇▇ing the disability period of disability, the Executive's employment shall be terminated reduced by reason the sum of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefitsamounts, if any, shall, be determined solely payable to Finl▇▇ ▇▇ or prior to the time of any such payment under disability benefit plans of the Company's retirement, insurance Corporation and other compensation programs then in effect in accordance with the terms of which were not previously applied to reduce any such programs, and the Company shall have no further obligations to him under this Agreementpayment.
(b) If at any time Finl▇▇'▇ ▇▇▇loyment is terminated by his death, the Executive's Corporation shall pay to Finl▇▇'▇ ▇▇▇use, or if he leaves no spouse, to his estate, within thirty (30) days of Finl▇▇'▇ ▇▇▇th, all salary and employment shall be terminated (i) by reason benefits due to Finl▇▇ ▇▇▇rued through the date of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 .
(c) hereof) his If Finl▇▇'▇ ▇▇▇loyment shall be properly terminated for cause pursuant to all of the applicable provisions of this agreement, the Corporation shall pay Finl▇▇ ▇▇▇ full base salary only through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, given and the Company Corporation shall have no further obligations to him under Finl▇▇ ▇▇▇er or pursuant to this Agreement. In addition.
(d) If (i) in breach of this agreement, in the event the Executive's employment is terminated Corporation shall terminate Finl▇▇'▇ ▇▇▇loyment other than pursuant to subsection 7 (a) above (termination for cause) or Section 14 below (termination by reason of the Executive's death or Disability, disability)(it being understood that a purported termination by the Executive Corporation pursuant to subsection 7 (a) above or his appropriate payee) shall be entitled Section 14 below which is disputed and finally determined not to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive proper shall be deemed to have been entitled to a bonus equal to termination by the bonus paid Corporation in breach of this agreement) or payable to the Executive with respect to the immediately preceding year.(ii) Finl▇▇ ▇▇▇ll terminate his employment for Good Reason, then
(cI) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Corporation shall pay Finl▇▇ ▇▇▇ full salary and all employment benefits due to the Executive his full base salary through Finl▇▇ ▇▇▇ough the Date of Termination, Termination at the rate in effect at the time the Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan of the Company, in each case at the time such payments are due;; 5
(iiII) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all in lieu of any further salary payments that would have been payable to the Executive pursuant Finl▇▇ ▇▇▇ periods subsequent to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination, the Corporation shall pay to Finl▇▇, ▇▇ severance pay (and not as a penalty to the Corporation), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus an amount equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
product of (iiiA) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash Finl▇▇'▇ ▇▇▇ual base salary rate in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse effect as of the Date of Termination, multiplied by (B) the number two (2), such payment to be made (X) if resulting from a termination based on a Change of Control of the Corporation or of MKP, in a lump sum on or before the thirtieth (30th) day following the Date of Termination, or (Y) if resulting from any other cause, in substantially equal semimonthly installments on the fifteenth and last days of each month commencing with the month in which the Date of Termination occurs and continuing for forty-eight (48) consecutive semimonthly payment dates (including the first such date as aforesaid), without interest;
(ivIII) During in addition to all other salary, employment benefits and other payments due to Finl▇▇ ▇▇▇suant to the Severance Period provisions of this subsection 8(d), the Company shallCorporation shall issue to Finl▇▇, ▇▇thin ten (10) days after the Date of Termination, such number of shares of the Corporation's common stock (such shares of common stock are hereinafter referred to as the "Termination Stock") as shall have an aggregate fair market value as of the Date of Termination equal to one million ($1,000,000.00) dollars less the aggregate fair market value of all of the shares of the Corporation's common stock and all of the warrants, options and other derivative securities to purchase shares of the Corporation's common stock which are owned of record by Finl▇▇ ▇▇ the Date of Termination. For purposes of this clause (III), (x) the fair market value of each share of the Corporation's common stock as of the Date of Termination shall be the average of the bid and ask prices for the Corporation's common stock for the ten (10) trading days immediately preceding the Date of Termination and (y) the fair market value of each warrant, option or other derivative security to purchase one (1) share of the Corporation's common stock as of the Date of Termination shall be equal to the fair market value of one (1) share of the Company's common stock as of the Date of Termination less the per share exercise price of such warrant, option or other derivative security (but in no event shall such fair market value of any warrant, option or other derivative security be less than zero). If the Corporation's common stock shall not be publicly traded on the Date of Termination, then the fair market value of the Corporation's common stock shall be mutually determined by two investment banking firms with experience related to the business of the Corporation and its subsidiaries. In such event, one such firm shall be designated by Finl▇▇ ▇▇▇ the other firm shall be designated by the Corporation. The fair market value of the Corporation's common stock and the fair market value of the warrants, options and other derivative securities to purchase shares of the Corporation's common stock as determined pursuant to this clause (III) of this subsection 8(d) shall be final, conclusive and binding upon the parties hereto. The Corporation shall be obligated to register the Termination Stock, at the Corporation's sole cost and expense, pursuant to a registration statement filed within sixty (60) days after the Date of Termination and declared effective as soon thereafter as is reasonably practicable. Further, if from and after the Date of Termination, the shares of the Corporation's common stock underlying the warrants, options and other derivative securities owned of record by Finl▇▇ ▇▇ the Date of Termination (such underlying shares of common stock hereinafter referred to as "Underlying Shares") shall not be freely tradeable by Finl▇▇ ▇▇▇suant to an effective registration statement, then the Corporation shall also be obligated to register all of the Underlying Shares together with the Termination Stock, at the Corporation's sole cost and expense, pursuant to the aforementioned registration statement. The Corporation shall be obligated to use its costbest efforts to cause such registration statement to be declared effective as soon as possible after filing and to maintain such effectiveness until all of the Termination Stock and all of the Underlying Shares shall have been sold by Finl▇▇; ▇▇d 6
(IV) in addition to the payments referred to in clauses (I), (II) and (III) above, if termination of Finl▇▇'▇ ▇▇▇loyment arises out of a breach by the Corporation of this agreement, the Corporation shall pay all other damages to which Finl▇▇ ▇▇▇ be entitled as a result of such breach, including damages for any and all loss of benefits to Finl▇▇ ▇▇▇er the Corporation's employee benefit plans which Finl▇▇ ▇▇▇ld have received if the Corporation had not breached this agreement and had Finl▇▇'▇ ▇▇▇loyment continued for the full term provided in Section 2 hereof. In addition to the occurrences specified in clauses (i) and (ii) of the preamble to this subsection 8(d), the Termination Stock shall also be issued to Finl▇▇ ▇▇ provided in subsection 2(b) above.
(e) Unless Finl▇▇'▇ ▇▇▇loyment is properly terminated by the Corporation for cause, the Corporation shall maintain in full force and effect, for the continued benefit of Finl▇▇ ▇▇▇ the greater of the number of years (including partial years) remaining in the term of employment hereunder or the number two (2), all employee benefit plans and programs in which Finl▇▇ ▇▇▇ entitled to participate immediately prior to the Date of Termination, provided that Finl▇▇ ▇▇▇tinued participation is possible under the general terms and provisions of such plans and programs. In the event that Finl▇▇'▇ ▇▇▇ticipation in any such plan or program is barred, the Corporation shall arrange to provide the Executive with life, disability, dental, accident and group health insurance Finl▇▇ ▇▇▇h benefits substantially similar to those that he was receiving immediately prior which Finl▇▇ ▇▇▇ld otherwise have been entitled to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of receive under such plans and programs from which his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit continued participation is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by himbarred.
(df) The Company Corporation may withhold from any payments or other benefits payable to Finl▇▇ ▇▇▇suant to this Section 8 or any other provision of this agreement all federal, state, city or other taxes as shall continue be required pursuant to any law, government regulation or ruling."
6. Section 14 of the Executive Employment Agreement is hereby amended by the addition of the following words at the end thereof: "except as otherwise specifically set forth in effect for Section 8 above".
7. The following provisions are hereby added as Section 23 of the Executive Employment Agreement: "Restated Agreement. This agreement has been restated and amended effective as of October 1, 1998 to incorporate the provisions of the First Amendment to the Executive Employment Agreement dated as of October 1, 1998 by and between the Corporation and Finl▇▇."
8. Any capitalized term not specifically defined herein shall have the meaning ascribed to such term in the Executive Employment Agreement.
9. Except as otherwise set forth in this agreement, all of the terms and provisions of the Executive Employment Agreement, shall remain unmodified and in full force and effect.
10. The covenants, agreements, terms, provisions and conditions contained in this agreement shall bind and inure to the benefit of the Executive all insurance or other provisions for indemnificationparties hereto and their respective heirs, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts successors, legal representatives and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes entitled to the Severance Paymentspermitted assigns, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedany.
Appears in 1 contract
Sources: Executive Employment Agreement (Financial Performance Corp)
Compensation Upon Termination or During Disability. The Executive (a) If P▇▇▇▇▇’▇ employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in a notice filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments P▇▇▇▇▇’▇ spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer’s obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless P▇▇▇▇▇, shall remain in effect.
(ab) During any period that the Executive P▇▇▇▇▇ fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he P▇▇▇▇▇ shall continue to receive his compensation Salary and other benefits payable to him under this Agreement at the rate in effect at the commencement of any such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, compensation until his P▇▇▇▇▇’▇ employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year.
(c) If the Executive's P▇▇▇▇▇’▇ employment should shall be terminated by for Cause, the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive P▇▇▇▇▇ his full base salary Salary and other compensation through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus all other amounts to which he and the Employer shall, assuming the Employer is entitled under any compensation plan of in compliance with the Company, in each case at the time such payments are due;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term provisions of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)Agreement, plus any bonus that would otherwise have been payable to the Executive no further obligations with respect to the Severance Period; providedSection 3 of this Agreement, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and but all other similar rights theretofore granted obligations of the Employer under this Agreement, including the obligations to the Executiveindemnify, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreementsdefend and hold harmless P▇▇▇▇▇, shall vest and shall then be exercisable remain in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by himeffect.
(d) The Company If (A) in breach of this Agreement, the Employer shall continue terminate P▇▇▇▇▇’▇ employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), and/or (B) P▇▇▇▇▇ shall terminate his employment for Good Reason, then the Employer shall pay to P▇▇▇▇▇:
(i) his full Salary and other compensation through the last day of the Initial Term or Renewal Term, as the case may be, at the rate in effect for at the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the time Notice of Termination is sent given; and
(ii) all other damages to which P▇▇▇▇▇ may be entitled as a result of the Executive or the Company with respect to all termination of his acts employment under this Agreement, including all legal fees and omissions while an officer expenses incurred by him in contesting or director (if applicable) as fully and completely as if disputing any such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable in seeking to such acts obtain or omissionsenforce any right or benefit provided by this Agreement.
(e) Notwithstanding anything The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement, in form and reasonably substance satisfactory to P▇▇▇▇▇, to expressly assume and agree to perform this Agreement in the same manner and to the contrary in this Agreement, in the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such same extent that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall Employer would be equal required to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of perform it if no such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount succession had taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedplace.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive 4.1 Provisions of this Article 4 shall be entitled to apply only if the following benefits during a period Date of disability, or upon termination Termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:employment occurs during the periods specified in Sections 3.1(ii) or (iii).
(a) 4.2 During any period that the Executive fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him under this Agreement full base salary at the rate then in effect at the commencement of and any such period, less any amounts payable to him awards under the Company's disability plan or program or other similar plan Executive Compensation Plan paid during such period, or under any governmental program, period until his employment is terminated pursuant to Section 9(a) hereof3.2. IfThereafter, during any period of disabilityhis benefits shall be determined in accordance with the Corporation's Disability Income Insurance Plan, or a substitute plan then in effect.
4.3 If the Executive's employment shall be is terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof)Cause, the Company Corporation shall pay him (or the unpaid portion of his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary through the Date of Termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, Payment shall be made at the time provided in the event Section 4.4.
4.4 If the Executive's employment is terminated by reason during either of the Executive's death periods specified in Section 3.1(ii) or Disability3.1(iii) by the Corporation other than pursuant to Section 3.2 or 3.3 or by the Executive pursuant to Section 3.4, or is terminated by the Executive during the period specified in Section 3.1(i) (in no event including termination because of death), the Executive Corporation shall pay him (or his appropriate payeei) shall be entitled to receive a pro rata any unpaid portion of his base salary through the Date of Termination at the highest annual rate in effect during the preceding twenty-four (24) months, and (ii) shall, in addition to any bonus that would otherwise have been severance benefits payable to the Executive under the Corporation's normal severance policies, pay to him no later than the fifth business day following the occurrence of both a Change in Control and the Executive's Date of Termination an amount equal to two (2) times the highest annual total compensation (including base salary and incentive compensation) paid or payable by the Corporation to him for any one of the three (3) calendar years ending with respect the year prior to the year in which the Date of Termination occurs. One-half of the amount under (ii) above shall be severance pay and the other half a payment contingent on the Executive's employment is terminatednot competing with the Corporation for a period of one year from the occurrence of both a Change in Control and the Executive's Date of Termination. If the Corporation determines that the Executive has competed against the Corporation in violation of this covenant, the Executive shall repay, within 10 business days, the full amount paid to the Executive for the covenant not to compete. For purposes of this provisionAgreement, competing with the Corporation means to engage in any activity or render any service, directly or indirectly (whether as principal, director, officer, investor, employee, consultant or otherwise), for or on behalf of any person or entity if said activity or service directly or indirectly consists of any product or service the Executive's bonus Corporation offers for such year has not been determined, sale to its customers. It is understood that nothing in this Agreement shall prevent the Executive shall be deemed from discussing any business arrangements to have been entitled become effective after the expiration of this covenant not to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearcompete.
(c) 4.5 If the Executive's employment should be is terminated during either of the periods specified in Section 3.1(ii) or 3.1(iii) by the Company Corporation other than for Cause pursuant to Section 3.2 or Disability 3.3 or by the Executive by reason of a constructive termination pursuant to Section 9(c3.4, or is terminated by the Executive during the period specified in Section 3.1(i) hereof(in no event including termination because of death), he the Corporation shall also pay at the time specified in Section 4.4 an additional $40,000 which is hereby deemed to be an amount equal to two (2) times the annual cost to the Executive to continue from the Date of Termination all employee benefit plans, programs or arrangements (such as, medical, dental, long-term disability insurance, life insurance, perquisites, and the like but not including retirement or stock option plans) in which Executive was entitled to participate immediately prior to the Date of Termination. The Corporation shall, in addition to the foregoing, continue to provide the Executive with health and dental benefits until the third anniversary of the date severance payments are made pursuant to Section 4.4(ii). Such benefits shall be entitledsubstantially the same as the benefits offered to the Company's executives generally, in exchange for including family coverage, during this three year period but at no cost to the Executive. In addition, the Corporation shall provide financial planning services to the Executive following a release termination under Section 3.1 (ii) or (iii) through the third anniversary of the Company, Zenith and any subsidiaries and affiliates date severance payments are made pursuant to Section 4.4(ii) at the reimbursement rates in effect immediately preceding the Change in Control.
4.6 If the Executive's employment is terminated during either of the Company and their respective officersperiods specified in Section 3.1(ii) or 3.1(iii) by the Corporation other than pursuant to Section 3.2 or 3.3 or by the Executive pursuant to Section 3.4, directorsor is terminated by the Executive during the period specified in Section 3.1(i) (in no event including termination because of death), shareholders employees and agents, then in addition to the benefits provided below ("Severance Payments"):
(i) The Company shall pay to which he is entitled under the Executive his full base salary through qualified defined benefit retirement plans or programs in which he participates or any successor plans or programs in effect on the Date of Termination, the Corporation shall pay him in one sum in cash at the rate date specified in 4.4 the amount equal to the actuarial equivalent of the retirement pension to which he would have been entitled under the terms of such retirement plans or programs without regard to "vesting" thereunder, had he accumulated two (2) additional years, or the period from the Date of Termination to his normal retirement date, whichever is less, of continuous service and age after the Date of Termination at the compensation level in effect at on the time Notice Date of Termination is given, plus all other under such retirement plans or programs reduced by the single sum actuarial equivalent of any amounts to which he is entitled pursuant to the provisions of said retirement plans and programs. For purposes of this Section, "actuarial equivalent" shall be determined using the same methods and assumptions utilized under the Corporation's retirement plans and programs immediately prior to commencement to the Corporation's knowledge of active pendency of a proposed transaction, whether favored or opposed by the Corporation, which resulted in the Change in Control. Executive shall be entitled to an additional amount from the Corporation's Supplement Retirement Plan which shall not be considered to duplicate the payment called for in this section. In the case of any compensation plan defined contribution plan, in lieu of the Companyamount determined above, in each case at the time such payments are due;
(ii) The Company Corporation shall pay to the Executive, at Executive the time such payments amount it would have been made had contributed during the two- year period following the Executive's employment not been terminated hereunderDate of Termination or to age 65 if less than two years, all salary payments that would have been payable to assuming the Executive pursuant to this Agreement had the Executive continued to be employed for the greater plan provisions remain in effect as they were on Date of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that Termination and the Executive's salary for each year annual compensation were the highest annual compensation actually received in the two years preceding his Date of such period is equal Termination and the Executive were to his salary continue, where relevant, to contribute at the highest rate he had contributed in the two years preceding his Date of Termination).
4.7 The Executive shall not be required to mitigate the amount of any payment provided for in this Article by seeking other employment. In the case of a Change in Control, plus any bonus that would otherwise have been payable in addition to the Executive with respect payment pursuant to the Severance Period; provided, however, that Section 4.4 on account of a termination pursuant to the extent the Executive's bonus for any portion of such Severance Period had not been determinedSection 3.1 or 3.4, the Executive shall be deemed also receive severance payments pursuant to have been entitled general Corporation termination policies.
4.8 In the event payments to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, under this Agreement and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may plan or agreement would be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(ivexcept for this provision) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes entitled to the Severance Payments, if any of the Severance Payments will be subject to the excise tax (the "Excise Tax") imposed by section sections 280G and 4999 of the Internal Revenue Code Code, the amount payable pursuant to this Agreement shall be reduced to the extent necessary to avoid the imposition of 1986such tax.
4.9 The Corporation shall be entitled to withhold from any amounts payable hereunder such amount or amounts, if any, as amended (are required by law.
4.10 In the "Code")event of any delay in payment of the amounts due Executive, Company the Corporation shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax interest on the Total Payments amounts delayed at the rate of prime (as hereinafter definedreported in the Wall Street Journal during the relevant period) and any federal, state and local income and other tax and Excise Tax upon plus one percent.
4.11 The Corporation may fund some or all of the payment provided payments called for by this Paragraph 10(f), Agreement by establishing an irrevocable trust under the direction and control of an independent trustee. The amounts potentially due shall be equal separately stated (and updated for changes) as shown on Appendix A attached to this Agreement to enable the Executive, Corporation and trustee to know the amount due Executive. The agreement with such trustee shall provide that upon receipt of a statement by the Executive that a Termination has occurred, such trustee (to the Total Payments. For purposes of determining whether any extent possible in terms of the Total Payments will be subject trust's funding) shall make payment to Executive on the Excise Tax and the amount 5th business day following receipt of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether notice pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result Agreement. Any funds set aside in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, trust shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and at all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as times remain subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 280G(b)(4) claims of the Code in excess creditors of the base amount, within Corporation. The creation of such trust shall not lessen the meaning of section 280G(b)(3) contractual obligation of the CodeCorporation under this Agreement, except that no payments shall be duplicated. Any funds attributable to Executive remaining in such trust after all payments have been made to Executive (or are otherwise not subject the possibility of payments shall have been extinguished) shall revert to the Excise Tax, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedCorporation.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive Employee shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's terminationduring the Term of this Agreement:
(a) During any period that the Executive Employee fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him under this Agreement at the rate in effect at the commencement of any such period, less any amounts together with all compensation payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a8(a) hereof. IfThereafter, during any period of disability, or in the Executiveevent the Employee's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay benefits shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the ExecutiveEmployee's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability Disability, or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c8(c) hereof), the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c11(c) hereof) 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, if any, amounts to which he is entitled from the Company through the Date of Termination under any compensation plan in each case of the Company at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event the ExecutiveEmployee's employment is terminated by reason of the ExecutiveEmployee's death or Disability, the Executive Employee (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive Employee with respect to the year in which the ExecutiveEmployee's employment is terminated. For purposes of this provision, if the ExecutiveEmployee's bonus for such year has not been determined, the Executive Employee shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive Employee with respect to the immediately preceding year.
(c) If the ExecutiveEmployee's employment should be terminated by the Company other than for Cause or Disability or by the Executive Employee by reason of a constructive termination pursuant to Section 9(c8(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, entitled to the benefits provided below ("Severance Payments"):below:
(i) The Company shall pay to the Executive 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 he is entitled under any compensation plan of the Company, in each case at the time such payments are due;
(ii) The Company shall pay the ExecutiveEmployee, at the time such payments would have been made had the ExecutiveEmployee's employment not been terminated hereunder, all salary payments that would have been payable to the Executive Employee pursuant to this Agreement had the Executive Employee continued to be employed for the greater of (x) the remaining Term of this Agreement Agreement, or (y) two years one year (the "Severance Period") (assuming for the purpose of such continuing payments that the ExecutiveEmployee's salary for each year of such period is equal to his salary at the Date of Termination), plus a pro rata portion of any bonus that would otherwise have been payable to the Executive Employee with respect to the Severance Periodyear in which the Employee's employment is terminated; provided, however, that to if the extent the ExecutiveEmployee's bonus for any portion of such Severance Period had year has not been determined, the Executive Employee shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive Employee with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the ExecutiveEmployee, including, but not limited to, the ExecutiveEmployee's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive Employee shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive Employee that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive Employee with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive Employee for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive Employee pursuant to this subparagraph if an equivalent benefit benefits is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report Period and any such benefit actually received by himhim shall be reported to the Company.
(d) The Company shall continue in effect for the benefit of the Executive employee all insurance or other provisions for the indemnification, defense or of hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive Employee or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) The Employee shall have the right to terminate his employment under this Agreement upon thirty (30) days notice to the Company without liability to the Company for damages incurred solely by reason of such termination.
(f) Notwithstanding anything to the contrary in this Agreement, in the event that, in the opinion of counsel for the Company, it is more likely than not that Executive becomes entitled any payment or benefit under this Agreement or under any other plan or agreement would not be deemed to be deductible in whole or in part in the Severance Payments, if any calculation of the Severance Payments will be subject to federal income tax of the tax (the "Excise Tax") imposed Company, or of any other person making such payment or providing such benefit, by section 4999 reason of Section 280G of the Internal Revenue Code of 1986, including the rules and regulations promulgated thereunder, as amended from time to time and including any successor legislation thereto (the "Code"), the aggregate payments and benefits provided by this Agreement shall be reduced (if necessary, to zero) (with the cash payments provided by this Agreement being the first reduced) to the minimum extent necessary so that no portion of such aggregate payments and benefits is not deductible for federal income tax purposes by reason of Section 280G of the Code. The Company shall pay hold such portions not paid to Executive the Employee in escrow. At the end of each calendar quarter during the term of such escrow, the Company shall deposit into escrow an additional amount (the "Gross-Up Payment") equal to interest accrued during such that the net amount retained by Executive, after deduction of any Excise Tax calendar quarter on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be amount held in escrow during such calendar quarter at a rate equal to the Total Paymentsrate than payable on judgments in California. If it shall be determined at any point in time, by counsel selected by the Company and the Employee, that it is more likely than not that the payment to the Employee of any or all of such amount held in escrow would be deductible for tax purposes, such amount shall be paid out of escrow to the Employee. In the event of a final determination by the Internal Revenue Service or of an arbitration aware pursuant to Section 16 hereof, that any such amount held in escrow would not be deductible for tax purposes under the then applicable provisions of the Code if paid to the Employee, or if it shall be determined at any point in time, by counsel selected by the company and the Employee, that it is more likely than not that the payment to the Employee of any such amount held in escrow would not be deductible for tax purposes under the then applicable provisions of the Code, such amount shall be paid out of escrow to the Company. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iiiSubsection 9(f),(i) the value of any non-cash benefits or any deferred or contingent payment or benefit shall be determined by Companythe company's independent auditors public accountants in accordance with the principles of sections 280G(d)(3) and (4) Section 280G of the Code. For purposes , (ii) no payment or benefit not constituting, in the opinion of such accountants, a "parachute payment" within the meaning of Section 280G of the code shall be included in determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to Company, at the time that the aggregate amount of such reduction payments and benefits, and (iii) no payment or benefit the receipt or enjoyment of which has been waived in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid writing by the Executive to Employee shall be included in determining the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or local income tax deduction) plus interest on the aggregate 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedpayments and benefits.
Appears in 1 contract
Sources: Employment Agreement (Zenith National Insurance Corp)
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illnessillness ("disability period"), injury or similar incapacity, he Employee shall continue to receive his compensation and other benefits payable to him under this Agreement full salary at the rate then in effect at the commencement of any for such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, period until his employment is terminated pursuant to Section 9(a) hereof. If10(b), provided that payments so made to Employee during any the disability period of disability, the Executive's employment shall be terminated reduced by reason the sum of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefitsamounts, if any, shall, be determined solely payable to Employee at or prior to the time of any such payment under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms disability benefit plans of such programs, and the Company shall have no further obligations and which were not previously applied to him under this Agreementreduce any such payment.
(b) If Employee's employment is terminated by his death, the Company shall pay to Employee's spouse, or if he leaves no spouse to his estate, an amount equal to his full salary at any time the Executiverate then in effect for a period of one year after the date of death.
(c) If Employee's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof)Cause, the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) Employee his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given.
(d) If (i) in breach of this Agreement, plus all other amounts, if any, to which he is entitled from the Company shall terminate Employee's employment other than pursuant to Section 10(b) or 10(c) (it being understood that a purported termination pursuant to Section 10(b) or 10(c) which is disputed and finally determined not to have been proper shall be a termination by the Company in breach of this Agreement) or (ii) Employee shall terminate his employment for Good Reason, then
(A) the Company shall (I) pay Employee his full salary and provide Employee his benefits through the Date of Termination under any compensation plan at the rate or level in each case effect at the time Notice of Termination is given and (II) pay Employee his full Bonus for the calendar year in which the Date of Termination occurs, at such time as such Bonus would have been paid if Employee's employment by the Company had not so terminated;
(B) in lieu of any further salary or bonus payments are dueto Employee for periods subsequent to the Date of Termination, and the Company shall pay as severance pay to Employee an amount equal to (1) Employee's average annual cash compensation received from the Company during the three full calendar years immediately preceding the Date of Termination, multiplied by (2) the greater of (w) the number of years (including partial years) that would have no further obligations been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to him the proviso of Section 3 and (x) three, such payment to be made (y) if Employee's termination is based on a change of control of the Company, in a lump sum on or before the fifth day following the Date of Termination, or (z) if Employee's termination results from any other cause, in substantially equal semimonthly installments on the fifteenth and last days of each month commencing with the month in which the Date of Termination occurs and continuing for the number of consecutive semimonthly payment dates (including the first such date as aforesaid) equal to the product obtained by multiplying the number of years (including partial years) applicable under this Agreementclause (w) above by 24;
(C) all options to purchase the Company's common stock granted to Employee under the Company's option plan or otherwise shall immediately become fully vested and shall terminate on such date as they would have terminated if Employee's employment by the Company had not terminated and, if Employee's termination is based on a change of control of the Company and Employee elects, not more than 30 days after the Date of Termination, to surrender any or all of such options to the Company, the Company shall pay Employee on or before the fifth day following such surrender a lump sum cash payment equal to the excess of (1) the fair market value on the Date of Termination of the securities issuable upon exercise of the options surrendered over (2) the aggregate exercise price of the options surrendered;
(D) the Company shall maintain in full force and effect, for the continued benefit of Employee, for a number of years equal to the greater of (1) the number of years (including partial years) that would have been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to the proviso of Section 3 and (2) three, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In addition, in the event the Executivethat Employee's employment participation in any such plan or program is terminated by reason of the Executive's death or Disabilitybarred, the Executive (or his appropriate payee) Company shall be entitled arrange to receive a pro rata portion of any bonus that provide Employee with benefits substantially similar to those which Employee would otherwise have been payable entitled to receive under such plans and programs from which his continued participation is barred; and
(E) if termination of Employee's employment arises out of a breach by the Company of this Agreement, the Company shall pay all other damages to which Employee may be entitled as a result of such breach, including damages for any and all loss of benefits to Employee under the Company's employee benefit plans which Employee would have received if the Company had not breached this Agreement and had Employee's employment continued for the then remaining term of the Employment Period but the Employment Period were not thereafter extended pursuant to the Executive with respect to the year in which the Executive's employment is terminated. For purposes proviso of this provisionSection 3, if the Executive's bonus for and including all reasonable legal fees and expenses incurred by him as a result of such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yeartermination.
(ce) If Employee shall terminate his employment under Section 10(d)(ii), the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company shall pay to the Executive Employee his full base salary through the Date of Termination, Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan of the Company, in each case at the time such payments are due;.
(iif) The Company Employee shall pay not be required to mitigate the Executive, at the time such payments would have been made had the Executive's amount of any payment provided for in this Section 11 by seeking other employment not been terminated hereunder, all salary payments that would have been payable or otherwise.
(g) Notwithstanding anything in this Agreement to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoingcontrary, the Company shall not provide be obligated to pay any benefit portion of any amount otherwise receivable by the Executive payable to Employee pursuant to this subparagraph Section 11 if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice could not reasonably deduct such portion solely by operation of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes entitled to the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedamended.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in notice filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments to the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c6.4(a) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 100% of his appropriate payeeSalary, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are duefor one year, and thereafter for one additional year at an annual rate equal to 50% of the Company shall Salary which would have no further obligations to him been in effect under this Agreement. In addition, plus, in each case, any disability payments otherwise payable by or pursuant to plans provided by the event Employer. To the Executive's employment is terminated by reason extent physically and mentally capable of the Executive's death so doing without potentially impairing or Disabilitydamaging his health, the Executive (or his appropriate payee) Employee shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable provide consulting services to the Executive with respect Employer during the period that he is receiving payments pursuant to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 9(b).
(c) If the ExecutiveEmployee's employment should shall be terminated by for Cause, the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the Employee's employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), including as a result of a Change of Control, and/or (B) the Employee shall terminate his employment for Good Reason or at any time within six months after a Change of Control, then the Employer shall pay to the Employee:
(i) his full Salary through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable for periods subsequent to the Executive Date of Termination (in lieu of any further payments pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term Section 3 of this Agreement or Agreement), Severance Pay (y) two years (as hereinafter defined), payable on the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at first day following the Date of Termination), plus as follows:
(A) if the Employee, without Good Reason, terminates his employment at any bonus that would otherwise have been payable time within six months after a Change of Control, or if, prior to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion and not as a result of such Severance Period had not been determineda Change of Control, the Executive shall be deemed Employee's employment is terminated either by the Employee for Good Reason or by the Employer other than pursuant to have been entitled to Sections 6.2 or 6.3 hereof, a bonus lump sum amount equal to the bonus paid highest of (a) $1,000,000 or payable (b) total compensation (including the value of all perquisites, such as health and life insurance and car allowance, etc.) received or earned by the Employee from the Employer during the twelve months prior to the Executive with respect Termination Date, multiplied by the fraction the numerator of which is the number of months remaining in the unexpired of this Agreement and the denominator of which is 12, or
(B) if after or as a result of a Change of Control, the Employee's employment is terminated either by the Employee for Good Reason or by the Employer other than pursuant to Sections 6.2 or 6.3 hereof, a lump sum amount equal to ten (10) times the immediately preceding year;total compensation, (including the value of all perquisites, such as health and life insurance and car allowance, etc.) and the value of all stock options, received or earned by the Employee during the twelve (12) months prior to such Date of Termination (in case of either (ii)(A) or (ii)(B), "Severance Pay"); and
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted damages to which the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as Employee may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse entitled as result of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason termination of his receipt of such benefits following his termination of employment. Notwithstanding the foregoingemployment under this Agreement, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received including all legal fees and expenses incurred by him from another employer in contesting or source at any time during the Severance Period. Executive agrees to report disputing any such termination or in seeking to obtain or enforce any right or benefit actually received provided by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissionsthis Agreement.
(e) Notwithstanding anything The Employee shall not be required to mitigate the amount of any payment provided for in this Section 9 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 9 be reduced by any compensation earned by the Employee as the result of employment by another employer or business or by profits earned by the Employee from any other source at any time before and after the Date of Termination.
(f) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and substance satisfactory to the contrary Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Employer in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (i) Upon Purches's death, the Corporation shall be entitled pay to the following benefits during person designated by Consultant in a notice filed with the Corporation or, if no person is designated, to Purches's estate as a lump sum death benefit, Consultant's full compensation for a period of disabilitysix (6) months after the date of Purches's death. Upon full payment of amounts required to be paid under this subsection, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:Corporation shall have no further obligation under this Agreement.
(aii) During any period that the Executive Purches fails to perform his full-time duties with the Company under this Agreement as a result of incapacity due to physical or mental illness, injury or similar incapacity, he Consultant shall continue to receive his its full compensation and other benefits payable to him under this Agreement at until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyConsultant's disability plan or program or other similar plan during such period, or under any governmental program, until his employment relationship is terminated pursuant to Section 9(a7(ii) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions or until Consultant shall receive a lump sum of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementsix months' compensation.
(biii) If at any time the ExecutiveConsultant's employment shall be retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement. In addition, .
(iv) If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii) (b) or his appropriate payee7 (iii) shall be entitled (c) (it being understood that a purported termination pursuant to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in Sections 7(iii) (b) or 7(iii) (c) which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) In the event of a Change in Control as defined in Section 7(iv), the Corporation shall pay Consultant, in a lump sum, an amount equal to the greater of (a) twice the amount then due through the end of the Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined in Section 7(iv) above, the total number of outstanding unexercised options (warrants) granted to Consultant under this Agreement as well as any previous employment, consultant or other agreements, shall be doubled in quantity while retaining the original exercise price.
(4) The Company Corporation shall pay all reasonable legal fees and expenses incurred by Consultant in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit in this Agreement.
(v) Unless the ExecutiveConsultant is terminated for Cause, at the time such payments would have been made had Corporation shall maintain in full force and effect, for the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed benefit of Consultant for the greater of (x) the remaining Term term of this Agreement or eighteen (y18) two years (the "Severance Period") (assuming for the purpose months after termination of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)this Agreement, plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been all health and hospitalization plans and programs in which Consultant was entitled to a bonus equal participate in immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as defined in Section 4 of this Agreement, provided that Consultant's continued participation is possible under the general terms and provisions of the Date of Termination;
(iv) During plans and programs. If Consultant's participation in any plan or program is barred, the Severance Period the Company shall, at its cost, Corporation shall arrange to provide the Executive Consultant with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit which Consultant would otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes have been entitled to receive under the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) plan and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments program from which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment his continued participation is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedbarred.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive i. Upon ▇▇▇▇▇▇▇▇'▇ death, the Corporation shall be entitled pay to the following benefits during person designated by Consultant in a notice filed with the Corporation or, if no person is designated, to ▇▇▇▇▇▇▇▇'▇ estate as a lump sum death benefit, Consultant's full compensation for a period of disabilitythree months after the date of ▇▇▇▇▇▇▇▇'▇ death. Upon full payment of amounts required to be paid under this subsection, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:Corporation shall have no further obligation under this Agreement.
(a) ii. During any period that the Executive ▇▇▇▇▇▇▇▇ fails to perform his full-time duties with the Company under this Agreement as a result of incapacity due to physical or mental illness, injury or similar incapacity, he Consultant shall continue to receive his its full compensation and other benefits payable to him under this Agreement at until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyConsultant's disability plan or program or other similar plan during such period, or under any governmental program, until his employment relationship is terminated pursuant to Section 9(a7(ii) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions or until Consultant shall receive a lump sum of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementsix months' compensation.
(b) iii. If at any time the ExecutiveConsultant's employment shall be retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement.
iv. In addition, If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii) (b) or his appropriate payee7(iii) shall be entitled (c) (it being understood that a purported termination pursuant to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in Sections 7(iii) (b) or 7(iii) (c) which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) In the event of a Change in Control as defined in Section 7(iv), the Corporation shall pay Consultant, in a lump sum, an amount equal to the greater of (a) twice the amount then due through the end of the Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined in Section 7(iv) above, the total number of outstanding unexercised options (warrants) granted to Consultant under this Agreement as well as any previous employment, consultant or other agreements, shall be doubled in quantity while retaining the original exercise price.
(4) The Company Corporation shall pay all reasonable legal fees and expenses incurred by Consultant in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit in this Agreement.
v. Unless the ExecutiveConsultant is terminated for Cause, at the time such payments would have been made had Corporation shall maintain in full force and effect, for the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed benefit of Consultant for the greater of (x) the remaining Term term of this Agreement or eighteen (y18) two years (the "Severance Period") (assuming for the purpose months after termination of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)this Agreement, plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been all health and hospitalization plans and programs in which Consultant was entitled to a bonus equal participate in immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as defined in Section 4 of this Agreement, provided that Consultant's continued participation is possible under the general terms and provisions of the Date of Termination;
(iv) During plans and programs. If Consultant's participation in any plan or program is barred, the Severance Period the Company shall, at its cost, Corporation shall arrange to provide the Executive Consultant with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit which Consultant would otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes have been entitled to receive under the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) plan and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments program from which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment his continued participation is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedbarred.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illnessillness ("disability period"), injury or similar incapacity, he Employee shall continue to receive his compensation and other benefits payable to him under this Agreement full salary at the rate then in effect at the commencement of any for such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, period until his employment is terminated pursuant to Section 9(a) hereof. If10(b), provided that payments so made to Employee during any the disability period of disability, the Executive's employment shall be terminated reduced by reason the sum of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefitsamounts, if any, shall, be determined solely payable to Employee at or prior to the time of any such payment under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms disability benefit plans of such programs, and the Company shall have no further obligations and which were not previously applied to him under this Agreementreduce any such payment.
(b) If Employee's employment is terminated by his death, the Company shall pay to Employee's spouse, or if he leaves no spouse to his estate, an amount equal to his full salary at any time the Executiverate then in effect for a period of one year after the date of death.
(c) If Employee's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof)Cause, the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) Employee his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given.
(d) If (i) in breach of this Agreement, plus all other amounts, if any, to which he is entitled from the Company shall terminate Employee's employment other than pursuant to Section 10(b) or 10(c) (it being understood that a purported termination pursuant to Section 10(b) or 10(c) which is disputed and finally determined not to have been proper shall be a termination by the Company in breach of this Agreement) or (ii) Employee shall terminate his employment for Good Reason (other than as a result of a management change of control), then
(A) the Company shall (I) pay Employee his full salary and provide Employee his benefits through the Date of Termination under any compensation plan at the rate or level in each case effect at the time Notice of Termination is given and (II) pay Employee his full Bonus for the calendar year in which the Date of Termination occurs, at such time as such Bonus would have been paid if Employee's employment by the Company had not so terminated;
(B) in lieu of any further salary or bonus payments are dueto Employee for periods subsequent to the Date of Termination, and the Company shall pay as severance pay to Employee an amount equal to (1) Employee's average annual cash compensation received from the Company during the three full calendar years immediately preceding the Date of Termination, multiplied by (2) the greater of (w) the number of years (including partial years) that would have no further obligations been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to him the proviso of Section 3 and (x) three, such payment to be made (y) if Employee's termination is based on a change of control of the Company, in a lump sum on or before the fifth day following the Date of Termination, or (z) if Employee's termination results from any other cause, in substantially equal semimonthly installments on the fifteenth and last days of each month commencing with the month in which the Date of Termination occurs and continuing for the number of consecutive semimonthly payment dates (including the first such date as aforesaid) equal to the product obtained by multiplying the number of years (including partial years) applicable under this Agreementclause (w) above by 24;
(C) all options to purchase the Company's common stock granted to Employee under the Company's option plan or otherwise shall immediately become fully vested and shall terminate on such date as they would have terminated if Employee's employment by the Company had not terminated and, if Employee's termination is based on a change of control of the Company and Employee elects, not more than 30 days after the Date of Termination, to surrender any or all of such options to the Company, the Company shall pay Employee on or before the fifth day following such surrender a lump sum cash payment equal to the excess of (1) the fair market value on the Date of Termination of the securities issuable upon exercise of the options surrendered over (2) the aggregate exercise price of the options surrendered;
(D) the Company shall maintain in full force and effect, for the continued benefit of Employee, for a number of years equal to the greater of (1) the number of years (including partial years) that would have been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to the proviso of Section 3 and (2) three, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In addition, in the event the Executivethat Employee's employment participation in any such plan or program is terminated by reason of the Executive's death or Disabilitybarred, the Executive (or his appropriate payee) Company shall be entitled arrange to receive a pro rata portion of any bonus that provide Employee with benefits substantially similar to those which Employee would otherwise have been payable entitled to receive under such plans and programs from which his continued participation is barred; and (E) if termination of Employee's employment arises out of a breach by the Company of this Agreement, the Company shall pay all other damages to which Employee may be entitled as a result of such breach, including damages for any and all loss of benefits to Employee under the Company's employee benefit plans which Employee would have received if the Company had not breached this Agreement and had Employee's employment continued for the then remaining term of the Employment Period but the Employment Period were not thereafter extended pursuant to the Executive with respect to proviso of Section 3, and including all reasonable legal fees and expenses incurred by him as a result of such termination.
(e) If Employee shall terminate his employment for Good Reason as a result of a management change of control, then
(A) the Company shall (I) pay Employee his full salary and provide Employee his benefits through the Date of Termination at the rate or level in effect at the time Notice of Termination is given and (II) pay Employee his full Bonus for the calendar year in which the ExecutiveDate of Termination occurs, at such time as such Bonus would have been paid if Employee's employment is by the Company had not so terminated. For purposes ;
(B) in lieu of this provisionany further salary or bonus payments to Employee for periods subsequent to the Date of Termination, the Company shall pay as severance pay to Employee an amount equal to Employee's average annual cash compensation received from the Company during the three full calendar years immediately preceding the Date of Termination, such payment to be made in a lump sum on or before the fifth day following the Date of Termination;
(C) all options to purchase the Company's common stock granted to Employee under the Company's option plan or otherwise shall immediately become fully vested and shall terminate on such date as they would have terminated if Employee's employment by the Company had not terminated and, if Employee elects, not more than 30 days after the Executive's bonus for Date of Termination, to surrender any or all of such year has not been determinedoptions to the Company, the Executive Company shall be deemed pay Employee on or before the fifth day following such surrender a lump sum cash payment equal to the excess of (1) the fair market value on the Date of Termination of the securities issuable upon exercise of the options surrendered over (2) the aggregate exercise price of the options surrendered; and
(D) the Company shall maintain in full force and effect, for the continued benefit of Employee, for one year, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In the event that Employee's participation in any such plan or program is barred, the Company shall arrange to provide Employee with benefits substantially similar to those which Employee would otherwise have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearreceive under such plans and programs from which his continued participation is barred.
(cf) If Employee shall terminate his employment under Section 10(d)(ii), the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company shall pay to the Executive Employee his full base salary through the Date of Termination, Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan of the Company, in each case at the time such payments are due;.
(iig) The Company Employee shall pay not be required to mitigate the Executive, at the time such payments would have been made had the Executive's amount of any payment provided for in this Section 11 by seeking other employment not been terminated hereunder, all salary payments that would have been payable or otherwise.
(h) Notwithstanding anything in this Agreement to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoingcontrary, the Company shall not provide be obligated to pay any benefit portion of any amount otherwise receivable by the Executive payable to Employee pursuant to this subparagraph Section 11 if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice could not reasonably deduct such portion solely by operation of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes entitled to the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedamended.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in writing filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c6.4(c) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 100% of his appropriate payeeSalary, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are duefor one year, and thereafter for one additional year at an annual rate equal to 50% of the Company shall Salary which would have no further obligations to him been in effect under this Agreement. In addition, plus, in each case, any disability payments otherwise payable by or pursuant to plans provided by the event Employer to its executive officers. To the Executive's employment is terminated by reason extent physically and mentally capable of the Executive's death so doing without potentially impairing or Disabilitydamaging his health, the Executive (or his appropriate payee) Employee shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable provide consulting services to the Executive with respect Employer during the period that he is receiving payments pursuant to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 9(b).
(c) If the ExecutiveEmployee's employment should shall be terminated for Cause or terminated by the Company other Employee without Good Reason prior to or more than for Cause or Disability or by twelve months after, a Change of Control, the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the
(i) his full Salary through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay for periods subsequent to the ExecutiveDate of Termination (in lieu of any further payments pursuant to Section 3 of this Agreement), Severance Pay (as hereinafter defined), payable on the first day following the Date of Termination, as follows:
(A) if the Employee, without Good Reason, terminates his employment at any time within twelve months after a Change of Control (provided that if the time Change of Control is pursuant to Section 6.4.2(b) of this Agreement, it is ascertainable on the date of such payments would have been made had Termination that such Change of Control has occurred), or if, prior to and not as a result of a Change of Control, the ExecutiveEmployee's employment not been is terminated hereundereither by the Employee for Good Reason or by the Employer other than pursuant to Sections 6.2 or 6.3 hereof, all salary payments that would have been payable a lump sum amount equal to the Executive highest of (a) $525,000 or (b) total compensation (including the value of all perquisites, such as health and life insurance and car allowance, etc.) received or earned by the Employee from the Employer during the twelve months prior to the Termination Date, multiplied by three (3), or
(B) if after or as a result of a Change of Control, the Employee's employment is terminated either by the Employee for Good Reason or by the Employer other than pursuant to Sections 6.2 or 6.3 hereof, a lump sum amount equal to six (6) times: (i) the total compensation received or earned (including the value of all perquisites, such as health and life insurance and car allowance, etc.) and (ii) the value of all stock options granted to the Employee by the Employer, during the twelve (12) months prior to such Date of Termination (in case of either (ii)(A) or (ii)(B), "Severance Pay"); and
(iii) all other damages to which the Employee may be entitled as a matter of law or equity as result of the termination of his employment under this Agreement, including all costs and expense and expenses incurred by him (including attorneys fees) in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement.
(iv) The value of the stock options described above will be determined using a Black-Scholes valuation methodology by an investment bank reasonably acceptable to
(e) The amount (if any) payable pursuant to this Agreement had the Executive continued to be employed for the greater of (xSection 9(d) the remaining Term of this Agreement or (y) two years (the "Severance PeriodTotal") shall be increased by an amount (assuming for the purpose "Increase") sufficient so that after the payment by the Employee of (A) any income taxes on the Increase and (B) any excise tax on the sum of (I) the Severance Total and (II) the Increase, the Employee shall have received an amount (net of such continuing payments that the Executive's salary for each year of such period is taxes) equal to his salary the Severance Total. The Employee shall be entitled to receive initially the entire Severance Total (together with any such additional payments required to cover any excise and income taxes payable as aforesaid) and shall not be required to repay to the Employer any amount which is ultimately and finally determined by the Internal Revenue Service (or an appropriate court) to have been in excess of the amount permitted to be received without incurring such excise tax, and Employer agrees to use its best efforts to support the Employee's position that such amounts are not subject to excise tax in any dispute with the Internal Revenue Service or in any other administrative or judicial proceedings.
(f) The Employee shall not be required to mitigate the amount of any payment provided for in this Section 9 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 9 be reduced by any compensation earned by the Employee as the result of employment by another employer or business or by profits earned by the Employee from any other source at any time before and after the Date of Termination).
(g) The Employer will require any successor (whether direct or indirect, plus any bonus that would otherwise have been payable by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and substance satisfactory to the Executive with respect Employee, to expressly assume and agree to perform this Agreement in the same manner and to the Severance Period; provided, however, same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the extent effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive's bonus Employee to compensation from the Employer in the same amount and on the same terms as he would be entitled to under Section 9(d)(ii)(B) if he terminated his employment for any portion Good Reason, except for purposes of such Severance Period had not been determinedimplementing the foregoing, the Executive date on which any such succession becomes effective shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illnessillness ("Disability Period"), injury or similar incapacity, he the Executive shall continue to receive his compensation and other benefits payable to him under this Agreement Base Salary at the rate then in effect at the commencement of any for such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, period until his employment is terminated pursuant to Section 9(a6(a)(ii) hereof. If, during provided that payments so made to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive at or prior to the time of any period such payment under disability benefit plans of disabilitythe Company or under the Social Security disability insurance program, and which amounts were not previously applied to reduce any such payment.
(b) If the Executive's employment is terminated by his death, the Company shall pay, in accordance with Section 10(b) hereof, any amounts due to the Executive under Section 4 hereof through the date of his death.
(c) If the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination Cause, pursuant to Section 9(csection 6(a)(iii) hereof), the Company shall pay him the Executive (or his appropriate payee, as determined in accordance with Section 12 (c) hereofi) his full base salary Base Salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, ; (ii) any Bonus declared -6- 7 and payable pursuant to which he is entitled from Section 4(b) hereof and (iii) any expense reimbursements due the Company through the Date of Termination under any compensation plan in each case at the time Executive pursuant to Section 4(f) hereof. Following such payments are due, and the Company shall have no further obligations to him the Executive under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year.
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company shall pay to the Executive 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 he is entitled under any compensation plan of the Company, in each case at the time such payments are due;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, If (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or the Company shall terminate the Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2Section 6(b) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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 Taxhereof, (ii) the amount of the Total Payments which Executive shall be treated as subject terminate his employment for Good Reason pursuant to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (iSection 6(c)(ii), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined.then:
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive shall be entitled to 8.1 In the following benefits during a period event of disability, either the death of the Consultant or upon the termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him under this Agreement at the rate in effect at the commencement of any such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability5.1(d), the ExecutiveCompany shall pay to the Consultant or the Consultant's employment personal representatives, as soon as reasonably practicable thereafter, any Base Salary and incentive compensation accrued and unpaid on the occurrence of such event, plus for the succeeding twelve (12) months after such event the sum of 100% of the Consultant's then-current Base Salary and incentive compensation.
8.2 If this Agreement shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (the Consultant for other than by reason of a constructive termination pursuant to Section 9(c) hereof)Good Reason, the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) the Consultant his full base salary and accrued and unpaid incentive compensation through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him the Consultant under this Agreement. In addition, .
8.3 If in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Company shall terminate this Agreement (it being understood that a purported termination for Disability or his appropriate payee) shall be entitled to receive for Cause which is disputed and finally determined by a pro rata portion court of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has competent jurisdiction not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year.
(c) If the Executive's employment should be terminated termination by the Company other than in breach of this Agreement), or if the Consultant shall terminate his employment for Cause or Disability or by the Executive by reason Good Reason, then, within 30 days of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):such termination:
(ia) The the Company shall pay to the Executive Consultant his full base salary Base Salary and accrued and unpaid incentive compensation through the Date of TerminationTermination is given and all other unpaid amounts, at if any, to which the rate in effect at Consultant is entitled as of the time Notice Date of Termination is given, plus all other amounts to which he is entitled under any compensation plan or program of the Company, in each case Company at the time such payments are due;; and
(iib) The the Company shall pay all other damages to which the ExecutiveConsultant may be entitled as a result of such breach, including damages for any and all loss of benefits to the Consultant under any of the Company's employee benefit plans in effect at the time of such payments termination which the Consultant would have been made received if the Company had not breached this Agreement and had this Agreement continued for the Executive's employment not been full term provided in Section 2 hereof, and including all legal fees and expenses incurred by him as a result of such termination, including the fees and expenses of enforcing the terms of this Agreement.
8.4 Unless the Consultant is terminated hereunderfor Cause, the Company shall maintain in full force and effect, for the continued benefit of the Consultant or his personal representatives for twelve (12) months, all salary payments that would have been payable to employee benefit plans and programs in which the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been Consultant was entitled to a bonus equal participate immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of provided that the Date of Termination;
(iv) During Consultant's continued participation is possible under the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident general terms and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt provisions of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts plans and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxesprograms. In the event that the Excise Tax Consultant's participation in any such plan or program is subsequently determined to be less than barred or any of such plans have been discontinued by the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of arrange to provide the Consultant with benefits substantially equivalent to those which the Consultant would otherwise have been entitled to receive under such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedplans and programs.
Appears in 1 contract
Sources: Consulting Agreement (Fact Corp)
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive fails to perform his full-time duties with the Company as a result of incapacity due to physical or mental illness, injury or similar incapacity, he shall continue to receive his compensation and other benefits payable to him under this Agreement at the rate in effect at the commencement of any such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, If the Executive's employment shall be terminated by reason of his death, disability the Employer shall pay to such person as he shall designate in a notice filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the expiration date of his death in addition to any payments the Executive's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the Employer, and such payments shall, assuming the Employer is in compliance with the provisions of this Agreement, not withstanding fully discharge the provisions Employer's obligations with respect to Section 3 of Section 20this Agreement, his pay shall cease and his benefits, if any, shall, be determined solely under but all other obligations of the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him Employer under this Agreement, including the obligations to indemnify, defend and hold harmless the Executive, shall remain in effect.
(b) If at During any time period that the Executive's employment shall be terminated (i) by reason Executive fails to perform his duties hereunder as a result of his death, (ii) by the Company for Cause incapacity due to physical or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof)mental illness, the Company Executive shall pay him (or continue to receive his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus all Salary and other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, and the Company shall have no further obligations to him under this Agreement. In addition, in the event until the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled pursuant to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes Section 6.2 of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearAgreement.
(c) If the Executive's employment should shall be terminated by for Cause, the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive his full base salary Salary and other compensation through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, in each case at including the time such payments are due;
(ii) The Company shall pay obligations to indemnify, defend and hold harmless the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash remain in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by himeffect.
(d) The Company If (A) in breach of this Agreement, the Employer shall continue terminate the Executive's employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), and/or (B) the Executive shall terminate his employment for Good Reason, then the Employer shall pay to the Executive:
(i) his full Salary and other compensation through the last day of the Initial Term or Renewal Term, as the case may be, at the rate in effect for at the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the time Notice of Termination is sent given; and
(ii) all other damages to which the Executive or may be entitled as a result of the Company with respect to all termination of his acts employment under this Agreement, including all legal fees and omissions while an officer expenses incurred by him in contesting or director (if applicable) as fully and completely as if disputing any such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable in seeking to such acts obtain or omissionsenforce any right or benefit provided by this Agreement.
(e) Notwithstanding anything The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement, in form and reasonably substance satisfactory to the contrary in Executive, to expressly assume and agree to perform this Agreement, Agreement in the event that Executive becomes entitled same manner and 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such same extent that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall Employer would be equal required to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of perform it if no such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount succession had taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedplace.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in notice filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments to the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 4 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 8.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c8.4(a) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 100% of his appropriate payeeBase Compensation, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are duefor one year, and thereafter for one additional year at an annual rate equal to 50% of the Company shall Base Compensation which would have no further obligations to him been in effect under this Agreement. In addition, plus, in each case, any disability payments otherwise payable by or pursuant to plans provided by the event Employer. To the Executive's employment is terminated by reason extent physically and mentally capable of the Executive's death so doing without potentially impairing or Disabilitydamaging his health, the Executive (or his appropriate payee) Employee shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable provide consulting services to the Executive with respect Employer during the period that he is receiving payments pursuant to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 11(b).
(c) If the ExecutiveEmployee's employment should shall be terminated by for Cause, the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Base Compensation through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 4 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the Employee's employment other than pursuant to Sections 8.2 or 8.3 hereof (it being understood that a purported termination pursuant to Section 8.2 or 8.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), including as a result of a Change of Control, and/or (B) the Employee shall terminate his employment for Good Reason or at any time within six months after a Change of Control, then the Employer shall pay to the Employee:
(i) his full Base Compensation through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable for periods subsequent to the Executive Date of Termination (in lieu of any further payments pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term Section 4 of this Agreement or (y) two years (Agreement), severance, payable on the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at first day following the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to in a bonus lump sum amount equal to the bonus paid higher of (a) $1,250,000 or payable (b) the total compensation (including the value of all perquisites, such as health and life insurance and car allowance and the value of all stock options granted to Employee by Employer received or earned by the Employee from the Employer during the twelve months prior to the Executive with respect to the immediately preceding yearTermination Date, multiplied by five (5) ("Severance Pay") and;
(iii) All stock option rightsall other damages to which the Employee may be entitled as result of the termination of his employment under this Agreement, stock appreciation rightsincluding all legal fees and expenses incurred by him in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement. The amount (if any) payable pursuant to this Section 11(d) (the "Severance Total") shall be increased by an amount (the "Increase") sufficient so that after the payment by the Employee of (A) any income taxes on the Increase and (B) any excise tax on the sum of (I) the Severance Total and (II) the Increase, the Employee shall have received an amount (net of such taxes) equal to the Severance Total. The Employee shall be entitled to receive initially the entire Severance Total (together with any such additional payments required to cover any excise and income taxes payable as aforesaid) and shall not be required to repay to the Employer any amount which is ultimately and finally determined by the Internal Revenue Service (or an appropriate court) to have been in excess of the amount permitted to be received without incurring such excise tax, and Employer agrees to use its best efforts to support the Employee's position that such amounts are not subject to excise tax in any and all dispute with the Internal Revenue Service or in any other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;administrative or judicial proceedings.
(iv) During The value of the Severance Period the stock options described above will be determined using a Black-Scholes valuation methodology by an investment bank reasonably acceptable to both Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive Employee. The fees for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable valuation will be paid by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissionsCompany.
(e) Notwithstanding anything The Employee shall not be required to mitigate the amount of any payment provided for in this Section 11 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 11 be reduced by any compensation earned by the Employee as the result of employment by another employer or business or by profits earned by the Employee from any other source at any time before and after the Date of Termination.
(f) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and substance satisfactory to the contrary Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Employer in the same amount and on the same terms as he would be entitled to hereunder if he terminated his employment for Good Reason, except for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in writing filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments to the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c6.4(a) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 100% of his appropriate payeeSalary, as determined in accordance with Section 12 (c) hereof) 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, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are duefor one year, and thereafter for one additional year at an annual rate equal to 50% of the Company shall Salary which would have no further obligations to him been in effect under this Agreement. In addition, plus, in each case, any disability payments otherwise payable by or pursuant to plans provided by the event Employer to its executive officers. To the Executive's employment is terminated by reason extent physically and mentally capable of the Executive's death so doing without potentially impairing or Disabilitydamaging his health, the Executive (or his appropriate payee) Employee shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable provide consulting services to the Executive with respect Employer during the period that he is receiving payments pursuant to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 9(b).
(c) If the ExecutiveEmployee's employment should shall be terminated for Cause or terminated by the Company other Employee without Good Reason prior to or more than for Cause or Disability or by twelve months after, a Change of Control, the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the Employee's employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), including as a result of a Change of Control, and/or (B) the Employee shall terminate his employment for Good Reason or at any time within twelve months after a Change of Control, then the Employer shall pay to the Employee:
(i) his full Salary through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay for periods subsequent to the ExecutiveDate of Termination (in lieu of any further payments pursuant to Section 3 of this Agreement), Severance Pay (as hereinafter defined), payable on the first day following the Date of Termination, as follows:
(A) if (i) the Employee, with or without Good Reason, terminates his employment at any time within twelve months after a Change of Control; or (ii) the time such payments would have been made had the ExecutiveEmployee's employment not been is terminated hereundereither by the Employee for Good Reason or by the Employer other than pursuant to Sections 6.2 or 6.3 hereof, all salary payments that would have been payable a lump sum amount equal to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater highest of (x) the remaining Term of this Agreement $375,000 or (y) two years three (3) time total compensation (including value of the stock options granted during such period) earned by the Employee during the twelve month period prior to such Date of Termination ("Severance PeriodPay") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;and
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted damages to which the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as Employee may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares entitled as a matter of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse law or equity as result of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason termination of his receipt of such benefits following his termination of employment. Notwithstanding the foregoingemployment under this Agreement, the Company shall not provide any benefit otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received including all costs and expense and expenses incurred by him from another employer (including attorneys fees) in contesting or source at any time during the Severance Period. Executive agrees to report disputing any such termination or in seeking to obtain or enforce any right or benefit actually received provided by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissionsthis Agreement.
(e) Notwithstanding anything to the contrary in this Agreement, in In the event that Executive becomes entitled of a termination of this Agreement by the Employee as a result of a Change of Control pursuant to which the Severance PaymentsPay is as set forth above in Section 9(d), if any the Severance Pay shall be the average taxable compensation of the Severance Payments will Employee for the five taxable years prior to such termination or such higher amount as may be subject permitted by the Internal Revenue Service to the tax (the compute "Excise Tax") imposed by section 4999 base amount" for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments 1986 (as hereinafter definedamended) and any federal, state and local income and other tax and Excise Tax upon the payment multiplied by three (but in no event may this amount exceed Severance Pay as provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (iSection 9(d) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions unless agreed to by the Employee). In the event of a termination of this Agreement by the Employee as a result in of a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within Change of Control the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1amount payable pursuant to Section 9(d) shall be treated as subject increased so that after payment of any excise tax the Employee shall receive the amount specified in Section 9(d). The Employee shall be entitled to initially receive the entire amount provided for in Section 9(d) and shall not be required to repay to the Excise Tax, unless in Employer any amount which is ultimately and finally determined by the opinion of tax counsel selected by Company's independent auditors and acceptable Internal Revenue Service (or an appropriate court) to Executive, such other payments or benefits (in whole or in part) 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 280G(b)(4) of the Code have been in excess of the base amount, within permitted amount and the meaning of section 280G(b)(3) of Employer agrees to use its best efforts to support the Code, or Employee's position that such payments are otherwise not subject to excise tax in any dealings with the Excise Tax, Internal Revenue Service any in any appropriate legal proceedings.
(iif) The Employee shall not be required to mitigate the amount of the Total Payments which any payment provided for in this Section 9 by seeking other employment or otherwise, nor shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within any payment provided for in this Section 9 be reduced by any compensation earned by the meaning Employee as the result of section 280G(b)(1employment by another employer or business or by profits earned by the Employee from any other source at any time before and after the Date of Termination.
(g) The Employer will require any successor (after applying clause (i)whether direct or indirect, above)by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and (iii) substance satisfactory to the value Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any non-cash benefits or any deferred payment or benefit such succession shall be determined by Company's independent auditors a breach of this Agreement and shall entitle the Employee to compensation from the Employer in accordance with the principles of sections 280G(d)(3same amount and on the same terms as he would be entitled to under Section 9(d)(ii)(B) and (4) of the Code. For if he terminated his employment for Good Reason, except for purposes of determining implementing the amount of foregoing, the Gross-Up Payment, Executive date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, "Employer" shall mean the Employer and any successor to pay federal income taxes at its business and/or assets which executes the highest marginal rate of federal income taxation in the calendar year in Agreement or 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 Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid otherwise becomes bound by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or local income tax deduction) plus interest on the amount terms and conditions of such repayment at the rate provided in section 1274(b)(2)(B) this Agreement by operation 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive shall be entitled to the following benefits during a period of disability, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:
(a) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illnessillness ("disability period"), injury or similar incapacity, he Employee shall continue to receive his compensation and other benefits payable to him under this Agreement full salary at the rate then in effect at the commencement of any for such period, less any amounts payable to him under the Company's disability plan or program or other similar plan during such period, or under any governmental program, period until his employment is terminated pursuant to Section 9(a) hereof. If10(b), provided that payments so made to Employee during any the disability period of disability, the Executive's employment shall be terminated reduced by reason the sum of his death, disability or the expiration of this Agreement, not withstanding the provisions of Section 20, his pay shall cease and his benefitsamounts, if any, shall, be determined solely payable to Employee at or prior to the time of any such payment under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms disability benefit plans of such programs, and the Company shall have no further obligations and which were not previously applied to him under this Agreementreduce any such payment.
(b) If Employee's employment is terminated by his death, the Company shall pay to Employee's spouse, or if he leaves no spouse to his estate, an amount equal to his full salary at any time the Executiverate then in effect for a period of one year after the date of death.
(c) If Employee's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereof)Cause, the Company shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) Employee his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given.
(d) If (i) in breach of this Agreement, plus all other amounts, if any, to which he is entitled from the Company shall terminate Employee's employment other than pursuant to Section 10(b) or 10(c) (it being understood that a purported termination pursuant to Section 10(b) or 10(c) which is disputed and finally determined not to have been proper shall be a termination by the Company in breach of this Agreement) or (ii) Employee shall terminate his employment for Good Reason (other than as a result of a management change of control), then
(A) the Company shall (I) pay Employee his full salary and provide Employee his benefits through the Date of Termination under any compensation plan at the rate or level in each case effect at the time Notice of Termination is given and (II) pay Employee his full Bonus for the calendar year in which the Date of Termination occurs, at such time as such Bonus would have been paid if Employee's employment by the Company had not so terminated;
(B) in lieu of any further salary or bonus payments are dueto Employee for periods subsequent to the Date of Termination, and the Company shall pay as severance pay to Employee an amount equal to (1) Employee's average annual cash compensation received from the Company during the three full calendar years immediately preceding the Date of Termination, multiplied by (2) the greater of (w) the number of years (including partial years) that would have no further obligations been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to him the proviso of Section 3 and (x) three, such payment to be made (y) if Employee's termination is based on a change of control of the Company, in a lump sum on or before the fifth day following the Date of Termination, or (z) if Employee's termination results from any other cause, in substantially equal semimonthly installments on the fifteenth and last days of each month commencing with the month in which the Date of Termination occurs and continuing for the number of consecutive semimonthly payment dates (including the first such date as aforesaid) equal to the product obtained by multiplying the number of years (including partial years) applicable under this Agreementclause (w) above by 24;
(C) all options to purchase the Company's common stock granted to Employee under the Company's option plan or otherwise shall immediately become fully vested and shall terminate on such date as they would have terminated if Employee's employment by the Company had not terminated and, if Employee's termination is based on a change of control of the Company and Employee elects, not more than 30 days after the Date of Termination, to surrender any or all of such options to the Company, the Company shall pay Employee on or before the fifth day following such surrender a lump sum cash payment equal to the excess of (1) the fair market value on the Date of Termination of the securities issuable upon exercise of the options surrendered over (2) the aggregate exercise price of the options surrendered;
(D) the Company shall maintain in full force and effect, for the continued benefit of Employee, for a number of years equal to the greater of (1) the number of years (including partial years) that would have been remaining in the Employment Period if Employee's employment by the Company had not so terminated but the Employment Period were not thereafter extended pursuant to the proviso of Section 3 and (2) three, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In addition, in the event the Executivethat Employee's employment participation in any such plan or program is terminated by reason of the Executive's death or Disabilitybarred, the Executive (or his appropriate payee) Company shall be entitled arrange to receive a pro rata portion of any bonus that provide Employee with benefits substantially similar to those which Employee would otherwise have been payable entitled to receive under such plans and programs from which his continued participation is barred; and (E) if termination of Employee's employment arises out of a breach by the Company of this Agreement, the Company shall pay all other damages to which Employee may be entitled as a result of such breach, including damages for any and all loss of benefits to Employee under the Company's employee benefit plans which Employee would have received if the Company had not breached this Agreement and had Employee's employment continued for the then remaining term of the Employment Period but the Employment Period were not thereafter extended pursuant to the Executive with respect to proviso of Section 3, and including all reasonable legal fees and expenses incurred by him as a result of such termination.
(e) If Employee shall terminate his employment for Good Reason as a result of a management change of control, then
(A) the Company shall (I) pay Employee his full salary and provide Employee his benefits through the Date of Termination at the rate or level in effect at the time Notice of Termination is given and (II) pay Employee his full Bonus for the calendar year in which the ExecutiveDate of Termination occurs, at such time as such Bonus would have been paid if Employee's employment is by the Company had not so terminated. For purposes ;
(B) in lieu of this provisionany further salary or bonus payments to Employee for periods subsequent to the Date of Termination, the Company shall pay as severance pay to Employee an amount equal to twice Employee's average annual cash compensation received from the Company during the three full calendar years immediately preceding the Date of Termination, such payment to be made in a lump sum on or before the fifth day following the Date of Termination;
(C) all options to purchase the Company's common stock granted to Employee under the Company's option plan or otherwise shall immediately become fully vested and shall terminate on such date as they would have terminated if Employee's employment by the Company had not terminated and, if Employee elects, not more than 30 days after the Executive's bonus for Date of Termination, to surrender any or all of such year has not been determinedoptions to the Company, the Executive Company shall be deemed pay Employee on or before the fifth day following such surrender a lump sum cash payment equal to the excess of (1) the fair market value on the Date of Termination of the securities issuable upon exercise of the options surrendered over (2) the aggregate exercise price of the options surrendered; and
(D) the Company shall maintain in full force and effect, for the continued benefit of Employee, for two years, all employee benefit plans and programs in which Employee was entitled to participate immediately prior to the Date of Termination provided that Employee's continued participation is possible under the general terms and provisions of such plans and programs. In the event that Employee's participation in any such plan or program is barred, the Company shall arrange to provide Employee with benefits substantially similar to those which Employee would otherwise have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearreceive under such plans and programs from which his continued participation is barred.
(cf) If Employee shall terminate his employment under Section 10(d)(ii), the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company shall pay to the Executive Employee his full base salary through the Date of Termination, Termination at the rate in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan of the Company, in each case at the time such payments are due;.
(iig) The Company Employee shall pay not be required to mitigate the Executive, at the time such payments would have been made had the Executive's amount of any payment provided for in this Section 11 by seeking other employment not been terminated hereunder, all salary payments that would have been payable or otherwise.
(h) Notwithstanding anything in this Agreement to the Executive pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term of this Agreement or (y) two years (the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoingcontrary, the Company shall not provide be obligated to pay any benefit portion of any amount otherwise receivable by the Executive payable to Employee pursuant to this subparagraph Section 11 if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice could not reasonably deduct such portion solely by operation of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes entitled to the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedamended.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive i. Upon Purches's death, the Corporation shall be entitled pay to the following benefits during person designated by Consultant in a notice filed with the Corporation or, if no person is designated, to Purches's estate as a lump sum death benefit, Consultant's full compensation for a period of disabilitysix (6) months after the date of Purches's death. Upon full payment of amounts required to be paid under this subsection, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:Corporation shall have no further obligation under this Agreement.
(a) ii. During any period that the Executive Purches fails to perform his full-time duties with the Company under this Agreement as a result of incapacity due to physical or mental illness, injury or similar incapacity, he Consultant shall continue to receive his its full compensation and other benefits payable to him under this Agreement at until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyConsultant's disability plan or program or other similar plan during such period, or under any governmental program, until his employment relationship is terminated pursuant to Section 9(a7(ii) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions or until Consultant shall receive a lump sum of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementsix months' compensation.
(b) iii. If at any time the ExecutiveConsultant's employment shall be retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement.
iv. In addition, If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii)(b) or 7(iii)(c) (it being understood that a purported termination pursuant to Sections 7(iii)(b) or his appropriate payee7(iii)(c) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) In the event of a Change in Control as defined in Section 7(iv), the Corporation shall pay Consultant, in a lump sum, an amount equal to the greater of (a) twice the amount then due through the end of the Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined in Section 7(iv) above, the total number of outstanding unexercised options (warrants) granted to Consultant under this Agreement as well as any previous employment, consultant or other agreements, shall be doubled in quantity while retaining the original exercise price.
(4) The Company Corporation shall pay all reasonable legal fees and expenses incurred by Consultant in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit in this Agreement.
v. Unless the ExecutiveConsultant is terminated for Cause, at the time such payments would have been made had Corporation shall maintain in full force and effect, for the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed benefit of Consultant for the greater of (x) the remaining Term term of this Agreement or eighteen (y18) two years (the "Severance Period") (assuming for the purpose months after termination of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)this Agreement, plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been all health and hospitalization plans and programs in which Consultant was entitled to a bonus equal participate in immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as defined in Section 4 of this Agreement, provided that Consultant's continued participation is possible under the general terms and provisions of the Date of Termination;
(iv) During plans and programs. If Consultant's participation in any plan or program is barred, the Severance Period the Company shall, at its cost, Corporation shall arrange to provide the Executive Consultant with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit which Consultant would otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes have been entitled to receive under the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) plan and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments program from which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment his continued participation is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedbarred.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive i. Upon Purches's death, the Corporation shall be entitled pay to the following benefits during person designated by Consultant in a notice filed with the Corporation or, if no person is designated, to Purches's estate as a lump sum death benefit, Consultant's full compensation for a period of disabilitythree months after the date of Purches's death. Upon full payment of amounts required to be paid under this subsection, or upon termination of his employment, as the case may be, if such period or termination occurs prior to Executive's termination:Corporation shall have no further obligation under this Agreement.
(a) ii. During any period that the Executive Purches fails to perform his full-time duties with the Company under this Agreement as a result of incapacity due to physical or mental illness, injury or similar incapacity, he Consultant shall continue to receive his its full compensation and other benefits payable to him under this Agreement at until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyConsultant's disability plan or program or other similar plan during such period, or under any governmental program, until his employment relationship is terminated pursuant to Section 9(a7(ii) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration of this Agreement, not withstanding the provisions or until Consultant shall receive a lump sum of Section 20, his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreementsix months' compensation.
(b) iii. If at any time the ExecutiveConsultant's employment shall be retention is terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c) hereofas defined in subsection 7(iii), the Company Corporation shall pay him (or his appropriate payee, as determined in accordance with Section 12 (c) hereof) his full base salary the Consultant its compensation through the Date date of Termination termination at the rate in effect at the time Notice of Termination is given, plus all other amounts, if any, to which he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such payments are due, delivered and the Company Corporation shall have no further obligations obligation to him Consultant under this Agreement.
iv. In addition, If (a) in the event the Executive's employment is terminated by reason breach of the Executive's death or Disabilitythis Agreement, the Executive Corporation shall terminate the Consulting relationship other than pursuant to Sections 7(iii)(b) or 7(iii)(c) (it being understood that a purported termination pursuant to Sections 7(iii)(b) or his appropriate payee7(iii)(c) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has disputed and finally determined not been determined, the Executive shall be deemed to have been entitled to proper shall be a bonus equal to termination by the bonus paid Corporation in breach of this Agreement), or payable to (b) the Executive with respect to Consultant shall terminate the immediately preceding year.relationship for Good Reason, then
(c) If the Executive's employment should be terminated by the Company other than for Cause or Disability or by the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i1) The Company Corporation shall pay to the Executive his Consultant its full base salary compensation through the Date date of Termination, termination at the rate then in effect at the time Notice of Termination is given, plus all other amounts to which he is entitled under any compensation plan given through the end of the Company, in each case at the time such payments are dueTerm;
(ii2) In the event of a Change in Control as defined in Section 7(iv), the Corporation shall pay Consultant, in a lump sum, an amount equal to the greater of (a) twice the amount then due through the end of the Term; or (b) two times the annual compensation paid to Consultant.
(3) In the event of a Change in Control of the Corporation as defined in Section 7(iv) above, the total number of outstanding unexercised options (warrants) granted to Consultant under this Agreement as well as any previous employment, consultant or other agreements, shall be doubled in quantity while retaining the original exercise price.
(4) The Company Corporation shall pay all reasonable legal fees and expenses incurred by Consultant in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit in this Agreement.
v. Unless the ExecutiveConsultant is terminated for Cause, at the time such payments would have been made had Corporation shall maintain in full force and effect, for the Executive's employment not been terminated hereunder, all salary payments that would have been payable to the Executive pursuant to this Agreement had the Executive continued to be employed benefit of Consultant for the greater of (x) the remaining Term term of this Agreement or eighteen (y18) two years (the "Severance Period") (assuming for the purpose months after termination of such continuing payments that the Executive's salary for each year of such period is equal to his salary at the Date of Termination)this Agreement, plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been all health and hospitalization plans and programs in which Consultant was entitled to a bonus equal participate in immediately prior to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as defined in Section 4 of this Agreement, provided that Consultant's continued participation is possible under the general terms and provisions of the Date of Termination;
(iv) During plans and programs. If Consultant's participation in any plan or program is barred, the Severance Period the Company shall, at its cost, Corporation shall arrange to provide the Executive Consultant with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit which Consultant would otherwise receivable by the Executive pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer or source at any time during the Severance Period. Executive agrees to report any such benefit actually received by him.
(d) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnification, defense or hold-harmless of officers or directors of the Company that are in effect on the date the Notice of Termination is sent to the Executive or the Company with respect to all of his acts and omissions while an officer or director (if applicable) as fully and completely as if such termination had not occurred, and until the final expiration or running of all periods of limitation against actions that may be applicable to such acts or omissions.
(e) Notwithstanding anything to the contrary in this Agreement, in the event that Executive becomes have been entitled to receive under the Severance Payments, if any of the Severance Payments will be subject to the tax (the "Excise Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) plan and any federal, state and local income and other tax and Excise Tax upon the payment provided for by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments program from which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment his continued participation is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedbarred.
Appears in 1 contract
Compensation Upon Termination or During Disability. The Executive (a) If the Employee's employment shall be terminated by reason of his death, the Employer shall pay to such person as he shall designate in writing filed with the Employer, or if no such person shall be designated, to his estate as a lump sum benefit, his full Salary to the date of his death in addition to any payments the Employee's spouse, beneficiaries or estate may be entitled to receive pursuant to any pension or employee benefit plan or life insurance policy or similar plan or policy then maintained by the following benefits during a period Employer, and such payments shall, assuming the Employer is in compliance with the provisions of disabilitythis Agreement, or upon termination fully discharge the Employer's obligations with respect to Section 3 of his employmentthis Agreement, as but all other obligations of the case may beEmployer under this Agreement, if such period or termination occurs prior including the obligations to Executive's termination:indemnify, defend and hold harmless the Employee, shall remain in effect.
(ab) During any period that the Executive Employee fails to perform his full-time duties with the Company hereunder as a result of incapacity due to physical or mental illness, injury or similar incapacity, he the Employee shall continue to receive his compensation and other benefits payable to him under this Agreement at Salary until the rate in effect at the commencement of any such period, less any amounts payable to him under the CompanyEmployee's disability plan or program or other similar plan during such period, or under any governmental program, until his employment is terminated pursuant to Section 9(a) hereof. If, during any period of disability, the Executive's employment shall be terminated by reason of his death, disability or the expiration 6.2 of this Agreement, not withstanding or until the provisions of Section 20, Employee terminates his pay shall cease and his benefits, if any, shall, be determined solely under the Company's retirement, insurance and other compensation programs then in effect in accordance with the terms of such programs, and the Company shall have no further obligations to him under this Agreement.
(b) If at any time the Executive's employment shall be terminated (i) by reason of his death, (ii) by the Company for Cause or Disability or (iii) by him (other than by reason of a constructive termination pursuant to Section 9(c6.4(c) hereof)of this Agreement, whichever first occurs. After termination, the Company Employee shall pay him (or be paid, in equal monthly installments, 60% of his appropriate payeeSalary, as determined in accordance with Section 12 (c) hereof) 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 amountsfor one year, if anyunless and except for any such amounts actually received by the Employee pursuant to the Company's long-term disability insurance program. To the extent physically and mentally capable of so doing without potentially impairing or damaging his health, the Employee shall provide consulting services to which the Employer during the period that he is entitled from the Company through the Date of Termination under any compensation plan in each case at the time such receiving payments are due, and the Company shall have no further obligations pursuant to him under this Agreement. In addition, in the event the Executive's employment is terminated by reason of the Executive's death or Disability, the Executive (or his appropriate payee) shall be entitled to receive a pro rata portion of any bonus that would otherwise have been payable to the Executive with respect to the year in which the Executive's employment is terminated. For purposes of this provision, if the Executive's bonus for such year has not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding yearSection 9(b).
(c) If the ExecutiveEmployee's employment should shall be terminated for Cause or terminated by the Company other Employee without Good Reason prior to or more than for Cause or Disability or by twelve months after, a Change of Control, the Executive by reason of a constructive termination pursuant to Section 9(c) hereof, he shall be entitled, in exchange for a release of the Company, Zenith and any subsidiaries and affiliates of the Company and their respective officers, directors, shareholders employees and agents, to the benefits provided below ("Severance Payments"):
(i) The Company Employer shall pay to the Executive Employee his full base salary Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given, plus and the Employer shall, assuming the Employer is in compliance with the provisions of this Agreement, have no further obligations with respect to Section 3 of this Agreement, but all other amounts to which he is entitled under any compensation plan obligations of the CompanyEmployer under this Agreement, including the obligations to indemnify, defend and hold harmless the Employee, shall remain in each case effect.
(d) If (A) in breach of this Agreement, the Employer shall terminate the Employee's employment other than pursuant to Sections 6.2 or 6.3 hereof (it being understood that a purported termination pursuant to Section 6.2 or 6.3 hereof which is disputed and finally determined not to have been proper shall be a termination by the Employer in breach of this Agreement), including as a result of a Change of Control, or (B) the Employee shall terminate his employment for Good Reason or at any time within twelve months after a Change of Control, then the Employer shall pay to the Employee:
(i) his full Salary through the Date of Termination at the rate in effect at the time such payments are dueNotice of Termination is given;
(ii) The Company shall pay the Executive, at the time such payments would have been made had the Executive's employment not been terminated hereunder, all salary payments that would have been payable for periods subsequent to the Executive Date of Termination (in lieu of any further payments pursuant to this Agreement had the Executive continued to be employed for the greater of (x) the remaining Term Section 3 of this Agreement or Agreement), Severance Pay (y) two years (as hereinafter defined), payable on the "Severance Period") (assuming for the purpose of such continuing payments that the Executive's salary for each year of such period is equal to his salary at tenth day following the Date of Termination), plus any bonus that would otherwise have been payable to the Executive with respect to the Severance Period; provided, however, that to the extent the Executive's bonus for any portion of such Severance Period had not been determined, the Executive shall be deemed to have been entitled to a bonus equal to the bonus paid or payable to the Executive with respect to the immediately preceding year;
(iii) All stock option rights, stock appreciation rights, and any and all other similar rights theretofore granted to the Executive, including, but not limited to, the Executive's right to receive cash in lieu of exercising stock options, as may be provided in his stock option agreements, shall vest and shall then be exercisable in full, and follows: If the Executive shall have 90 days following his termination within which to exercise any and all such rights and the restrictions on any and all shares of restricted stock granted to the Executive that are outstanding on the Date of Termination shall lapse as of the Date of Termination;
(iv) During the Severance Period the Company shall, at its cost, arrange to provide the Executive with life, disability, dental, accident and group health insurance benefits substantially similar to those that he was receiving immediately prior to the Notice of Termination plus an additional amount necessary to reimburse the Executive for any taxes imposed solely by reason of his receipt of such benefits following his termination of employment. Notwithstanding the foregoing, the Company shall not provide any benefit otherwise receivable Employee's employment is terminated either by the Executive Employee for Good Reason or by the Employer other than pursuant to this subparagraph if an equivalent benefit is actually received by him from another employer Sections 6.2 or source 6.3 hereof, at any time during the Severance Period. Executive agrees Initial Term or any Renewal Term or within twelve months after a Change of Control (provided that if the Change of Control is pursuant to report any such benefit actually received by him.
(dSection 6.4.2(b) The Company shall continue in effect for the benefit of the Executive all insurance or other provisions for indemnificationthis Agreement, defense or hold-harmless of officers or directors of the Company that are in effect it is ascertainable on the date of such Termination that such Change of Control has occurred), a lump sum amount equal to (A) Salary and bonus received by Employee (including the Notice value of Termination is sent all perquisites, such as health and life insurance and car allowance, etc.) received or earned by the Employee from the Employer during the twelve months prior to the Executive or Termination Date, multiplied by (B) three (3) ("Severance Pay") Provided however, in no event shall the Company with respect to all of his acts and omissions while an officer or director (if applicableamount payable under this Section 9(d) as fully and completely as if such termination had not occurredfrom the execution hereof until April 22, and until the final expiration or running of all periods of limitation against actions that may 2003 be applicable to such acts or omissionsless than $1,000,000.
(e) Notwithstanding anything In the event any excise tax is due on the Severance Pay, then the Severance Pay shall be increased so that the excise tax on the Severance Pay shall be paid as well as any income tax payable on such excise tax.
(f) The Employee shall as a condition to receiving any amounts under this Section IX(d), provide the Employer with an acceptable form of release agreement, whereby the Employer is released from its obligations hereunder.
(g) The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer, by agreement in form and substance satisfactory to the contrary Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. Failure of the Employer to obtain such Agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Employee to compensation from the Employer in the same amount and on the same terms as he would be entitled to under Section 9(d)(ii)(B) if he terminated his employment for Good Reason, except for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, in "Employer" shall mean the event that Executive becomes 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 Internal Revenue Code of 1986, as amended (the "Code"), Company shall pay to Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) Employer and any federal, state and local income and other tax and Excise Tax upon successor to its business and/or assets which executes the payment provided for Agreement or which otherwise becomes bound by this Paragraph 10(f), shall be equal to the Total Payments. For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive's termination of employment (whether pursuant to the terms and conditions of this Agreement or any other plan, arrangement or agreement with Company, any person whose actions result in a change in control or any person affiliated with Company or such person (which, together with Severance Payments, shall constitute "Total Payments"), shall be treated as "parachute payments" within the meaning by operation of section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company's independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) 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 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, (ii) the amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to 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 state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive's residence on the date of termination of employment, net of the maximum 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 subsequently determined to be less than the amount taken into account hereunder at the time of termination of Executive's employment, Executive shall repay to 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 that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax and/or a federal, state or 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 Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determinedlaw.
Appears in 1 contract