Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied. b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied. c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction. d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs. e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee. f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date. g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 2 contracts
Sources: Executive Severance Agreement (Alerus Financial Corp), Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the (A) Employee shall be entitled to receive an amount (the “Release Amount”) equal to the aggregate of one times: ten percent (i10%) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus payAggregate Separation Payment (as defined in Section 3(A) below). Subject to Section 2(E), plus the Release Amount will be paid on the next business day following the Release Deadline (iiias defined in Section 2(E) below) in a lump sum.
(B) Employee shall be entitled to receive an amount (the Company’s portion “Severance Amount”) equal to ninety percent (90%) of 12 months’ premiums under any healththe Aggregate Separation Payment, disability such amount to be paid in six (6) equal monthly installments. Subject to Section 2(D), the first installment will be paid on the next business day following the Release Deadline and life insurance plan or program the remaining payments will begin on the first business day of the month following the month in which the Employee was entitled to participate immediately prior to the Termination Date Release Deadline occurs.
(the aggregated amount, the “Severance Pay”), which C) All payments shall be paid subject to Employee by applicable taxes, and shall be capped at an amount such that the Company over a period aggregate present value of 12 months from all “parachute payments” (computed as of the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided ) does not exceed 2.99 times Employee's ”base amount” determined for purposes of Internal Revenue Service Code Section 280G.
(D) Notwithstanding anything to the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)contrary contained herein, the Company will not be obligated Company's obligations to make any payments to Employee pursuant to Section 2(C)(2)(B) above shall immediately cease without any required notice or further action on behalf of the Company's part if at any time Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company engages in a form Conflicting Activity (as prepared by the Company (the “Release”defined in Section 3(F) and delivered to Employee no later than five business days after the Termination Date, (iibelow) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law following his or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s her termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (ia) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior Subsequent to the Termination Date Date, and on the express condition that Employee has not revoked this Agreement, the Parent shall cause the Company to provide Employee with the severance payments (the aggregated amount, the “Severance PayPayments”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date ) in accordance with the Company’s regular payroll cycleschedule attached hereto as Annex I, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date due and payable within thirty (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 30) days following the Termination Date); provided however, provided that no payments under this Section 2 shall be made until the conditions specified Parent’s receipt of the stock certificates set forth on Annex II attached hereto. Such amounts when paid in Section 5(c) full shall constitute complete and full payment of any and all amounts due under the Employment Agreement, including salary and bonus amounts that have been satisfiedearned by the Executive but have not yet been paid as of the Termination Date.
b. Notwithstanding (b) The Company shall issue an IRS Form W-2 to Employee reflecting the Severance Payments made pursuant to this Section 5(a2. For purposes of clarity, the Company shall withhold amounts for payment of taxes as required by local, state and federal law. Employee shall be solely responsible for payment of taxes as required by local, state and federal law. If a claim is made against the Company for any tax or withholding in connection with or arising out of the Severance Payments pursuant to Section 2, Employee shall pay any such claim within thirty (30) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated days of being notified by the Company without Cause and agrees to indemnify the Company and hold it harmless against such claims, including but not limited to any taxes, attorneys’ fees, penalties or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a)interest, which shall be paid to Employee by are or become due from the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfiedCompany.
c. Notwithstanding the foregoing provisions of Section 5(a(c) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company Parent shall pay to the Employee shall be either a lump sum amount equivalent to the cost of maintaining continuous medical and dental coverage for the Employee for a period of two (i2) years from the full Termination Date under Parent’s current medical plan . The current payment or (ii) such lesser for Employee under the Parent’s current medical plan is approximately $520 per month, for an aggregate amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code $12,480 (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting FirmMedical Payments”). The Company Medical Payment shall cause due and payable within thirty (30) days following the Accounting Firm to provide detailed supporting calculations of its determinations Termination Date subject to the Company conditions set forth in Section 2(a) above.
(d) Employee understands and agrees that he would not receive the monies and/or benefits specified in this Section 2, except for Employee. Notice must be given to ’s execution of this Agreement and General Release and the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses fulfillment of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeepromises contained herein.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Severance Agreement (Cellular Biomedicine Group, Inc.)
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, if (1) a Change in Section 5(b)Control occurs on or prior to December 31, upon 2004, and (2) the termination of Employee’s Executive's employment is terminated (other than (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason) and the Date of Termination in connection therewith occurs within three (3) years after such Change in Control then the Company shall pay the Executive the amounts, and provide the Executive the benefits, hereinafter described in this Section 6.1 ("Severance Payments"), together with any payments that may be due under Section 6.2 hereof, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive's employment shall be deemed to have been terminated following a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated Control by the Company without Cause or by the Employee Executive for Good ReasonReason if (a) in connection with Executive's termination of employment by the Company without Cause or by the Executive for Good Reason (determined by treating the event or transaction hereinafter described as the Change in Control), a Notice of Termination is furnished following an event or transaction described in Section 15(G)(1)(x) or Section 15(G)(3)(x) which occurs on or prior to December 31, 2004, and (iib) the Termination Date a Management Change occurs in connection with or within 24 twelve (12) months immediately following a Change in Controlsuch event or transaction and subsequent to, but not more than six (6) months after, the Employee shall receive 2.99 times furnishing of such Notice of Termination.
(A) In lieu of any further salary payments to the Severance Pay calculated Executive for periods subsequent to the Date of Termination and in accordance with Section 5(a), which shall be paid to Employee lieu of any severance benefit otherwise payable by the Company in or any of its subsidiaries to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to (1) if the Date of Termination occurs on or prior to the later second anniversary of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided two and twenty-five hundredths (2.25) times the conditions specified sum of (i) the Executive's base salary as in Section 5(ceffect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the Change in Control (the "Base Salary"), plus (ii) have been satisfied.
c. Notwithstanding the target annual bonus established for the Executive under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change in Control), or (2) if the Date of Termination occurs after the second anniversary of the Change in Control, one (1.0) times the sum of such Base Salary plus such target annual bonus. If, notwithstanding the foregoing provisions provision that the lump sum severance is to be in lieu of Section 5(a) and (b)any severance benefit otherwise payable, the Company will not or any of its subsidiaries is required by applicable law to pay such a benefit, the Company's obligation to pay such lump sum severance hereunder shall be obligated offset and reduced by the amount of the benefit required to make any payments be paid by applicable law.
(B) For the 27-month period immediately following the Date of Termination, the Company shall arrange to or on behalf provide the Executive and his dependents with life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Employee under Section 5(a) Termination (or, if more favorable to the Executive, those provided to the Executive and (bhis dependents immediately prior to the Change in Control), as applicableat no greater cost to the Executive on an after-tax basis than the cost to the Executive immediately prior to such date or occurrence; PROVIDED, unless HOWEVER, that the foregoing benefits shall be provided for a period of only twelve (i12) Employee signs a release months if the Date of claims in favor Termination occurs after the second anniversary of the Company Change in a form as prepared Control. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive at no greater cost by a subsequent employer during the applicable period set forth above (and any such benefits received by or made available to the Executive shall be reported to the Company (by the “Release”Executive). If the Severance Payments shall be decreased pursuant to Section 6.2(B) hereof, and delivered the Section 6.1(B) benefits which remain payable after the application of Section 6.2 hereof are thereafter reduced pursuant to Employee the immediately preceding sentence, the Company shall, no later than five (5) business days after following such reduction, pay to the Termination DateExecutive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (b) the amount of the subsequent reduction in these Section 6.1(B) benefits, or (c) the maximum amount which can be paid to the Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the Code.
(C) Notwithstanding any provision of any incentive, stock, retirement, savings or other plan to the contrary, as of the Date of Termination, (i) the Executive shall be fully vested in (1) all then outstanding options to acquire stock of the Company (or if such options have been assumed by, or replaced with options for shares of, a parent, surviving or acquiring company, such assumed or replacement options), and all then outstanding restricted shares of stock of the Company (or the stock of any parent, surviving or acquiring company into which such restricted shares have been converted or for which they have been exchanged) held by the Executive, (2) all accrued basic match and incremental match employer contributions under the Company's Capital Appreciation Plan (but not deemed participation match contributions thereunder), and (3) to the extent permissible under the Code and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), all amounts credited to his account under the Company's 401(k) Savings and Investment Plan which are attributable to employer contributions; and (ii) all applicable consideration periods and rescission periods provided by law with respect stock options referred to in clause (i) above shall remain exercisable until the Release have expired without Employee rescinding earlier of (x) the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as third anniversary of the dates Date of Termination or (y) the otherwise applicable expiration date of such option. To the extent that the full vesting of the payments. The cessation Executive under clause (i)(3) of these payments will be in addition to, and not as an alternative to, any other remedies at law the preceding sentence would violate either ERISA or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount which cannot become fully vested.
(D) The Company shall pay to the Executive a lump sum amount, in cash, equal to the Executive's target annual bonus under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change of Control) multiplied by a fraction, the numerator of which is the number of days in such fiscal year through and including the Date of Termination, and the denominator of which is 365. For purposes of this clause (D), the Executive's target annual bonus in respect of 2001 shall be deemed to be 150% of his actual target annual bonus in respect of 2001 (less, if previously paid to the Executive, 60% of his actual target annual bonus in respect of 2001).
(A) Except as otherwise provided in Section 6.2(B), if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, Payments together with all other payments and the value of any payment or benefit received or to be received by the Employee under this Agreement would result Executive in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance connection with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes or the “deferral of compensation” under Section 409A termination of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only Executive's employment (whether pursuant to the extent necessary to satisfy terms of this Agreement or otherwise) (iiall such payments and benefits, excluding the Gross- Up Payment, being hereinafter called "Total Payments") above. All determinations required to will be made under this Section 5(esubject (in whole or part) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Tax, then the Company shall pay to Employee only his base salary the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any accrued but unused vacation or PTO earned through federal, state and local income and employment taxes and Excise Tax upon the Termination Date.
g. In addition Gross-Up Payment, shall be equal to the benefits otherwise provided in Section 5Total Payments. For purposes of determining the amount of the Gross- Up Payment, the Employee Executive shall be entitled deemed to pay federal income taxes at the following benefits and payments upon highest marginal rate of federal income taxation in the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights calendar year in which the Employee Gross-Up Payment is vested to be made and state and local income taxes at the highest marginal rate of taxation in the state and localities of the Executive's residence and employment, as applicable, on the Date of Termination, net of the maximum reduction in federal income tax which could be obtained from deduction of such state and local taxes.
(B) If the Total Payments would (but for this Section 6.2(B)) be subject (in whole or part) to the Excise Tax, but the aggregate value of the portion of the Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is less than 330% of the Executive's Base Amount, then subsection (A) of this Section 6.2 shall not apply, and the cash Severance Payments shall be reduced (if necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to zero), to the extent necessary to cause the Total Payments not to be subject to the Excise Tax.
(C) 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) all of the Total Payments shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, unless in the opinion of the accounting firm which was, immediately prior to the Change in Control, the Company's independent auditor (the "Auditor"), such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the terms principles of all awards sections 280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section 6.3 hereof, the Company shall provide the Executive with its calculation of the amounts referred to in this Section 6.2(C) and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations. If the Executive disputes the Company's calculations (in whole or in part), the reasonable opinion of the Auditor with respect to the matter in dispute shall prevail.
(I) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, the Gross-Up Payment and the amount of the reduction in the Severance Payments, plus interest on the amount of such repayments at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(II) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are not to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, 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 and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(III) Except as otherwise provided in clause (IV) below, in the event there is a Final Determination that the Excise Tax exceeds the amount taken into account hereunder in determining the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall pay to the Executive, within five (5) business days following the date of the Final Determination, the sum of (1) a Gross-Up Payment in respect of such excess and in respect of any portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up Payment, including a Gross-Up Payment in respect of any Excise Tax attributable to amounts payable under clauses (2) and (3) of this paragraph (III) (plus any interest, penalties or additions payable by the Executive with respect to such excess and such portion), (2) if Severance Payments were reduced pursuant to Section 6.2(B) but after giving effect to such Final Determination, the Severance Payments should not have been reduced pursuant to Section 6.2(B), the amount by which the Severance Payments were reduced pursuant to Section 6.2(B), and (3) interest on such amounts at 120% of the rate provided in section 1274(b)(2) of the Code.
(IV) In the event that (1) Severance Payments were reduced pursuant to Section 6.2(B) and (2) the aggregate value of Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is subsequently redetermined in a Final Determination, but such redetermined value still does not exceed 330% of the Executive's Base Amount, then, within five (5) business days following such Final Determination, (x) the Company stock purchase and stock incentive plans or programsshall pay to the Executive the amount (if any) by which the reduced Severance Payments (after taking the Final Determination into account) exceeds the amount of the reduced Severance Payments actually paid to the Executive, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b) of the Code, or any successor (y) the Executive shall pay to any the Company the amount (if any) by which the reduced Severance Payments actually paid to the Executive exceeds the amount of the reduced Severance Payments (after taking the Final Determination into account), plus interest on the amount of such plans repayment at 120% of the rate provided in section 1274(b) of the Code.
6.3 The payments provided in subsection (A) and (D) (and to the extent applicable, subsection (C)) of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifteenth (15th) day following the Date of Termination, PROVIDED, HOWEVER, that if the amounts of such payments, and the potential limitation on such payments set forth in Section 6.2 hereof, cannot be finally determined on or programs.before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company or, in the case of payments under Section 6.2 hereof, in accordance with said Section 6.2, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the sixtieth (60th) day after the Date of Termination. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculation
Appears in 1 contract
Sources: Severance Agreement (Chiquita Brands International Inc)
Severance Payments. a. Except as provided in Section 5(b), upon 2.1 If the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one timesis: (ia) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates terminated during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated Term by the Company Spectrum without Cause (as defined below) or by the Employee for Good Reason, and due to death or Disability (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(aas defined below), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) ; and (b)) the Executive (or in the event of death or Disability, the Company will not be obligated to make any payments to Executive's estate, heirs, or on behalf of Employee under Section 5(a) and (b)administrator, as applicable, unless (i) Employee signs executes a separation agreement in form and content agreeable to Spectrum and with a full release of claims in favor of the Company Company, which becomes irrevocable within fifty-five (55) days after the Executive’s termination (or such longer applicable time period if required by applicable law), then Spectrum shall pay the Executive the amounts, and provide the Executive the benefits, described in Section 2.2 (the “Severance Period”) and Section 2.3 (the “Severance Payments”) for the duration of the Severance Period (as defined in Section 2.2 below). For the avoidance of doubt, if the Executive fails to execute the separation agreement in a form timely manner so as prepared to permit any revocation period to expire prior to the end of the applicable fifty-five (55) day period (or such longer applicable time period if required by applicable law), or timely revokes acceptance of the separation agreement following its execution, the Executive shall not be entitled to any benefits under this Agreement (including, but not limited to, Sections 2.3(a) or 2.3(b)). For the avoidance of doubt, any decision by Spectrum not to renew the Term of this Agreement that results in the Executive’s separation shall be deemed a termination without Cause as of the expiration of the Term for all purposes of this Agreement, unless the failure to renew is because of Executive’s refusal to renew or because a termination has occurred prior to the expiration of the Term.
2.2 The “Severance Period” shall be: (a) twenty-six (26) weeks in the event the Executive’s total employment with Spectrum or its subsidiaries is between zero (0) and twelve (12) months; (b) thirty-two (32) weeks in the event the Executive’s total employment with Spectrum or its subsidiaries is longer than twelve (12) months but less than three (3) years; (c) forty (40) weeks in the event the Executive’s total employment with Spectrum or its subsidiaries is longer than three (3) but less than six (6) years; and (d) fifty-two (52) weeks in the event the Executive’s total employment with Spectrum or its subsidiaries is longer than six (6) years. By way of example, if the Executive’s total employment with Spectrum or its subsidiaries at the time of the Executive’s termination is eighteen (18) months, the Executive will be entitled to thirty-two (32) weeks of Severance Payment. Alternatively, if the Executive’s total employment with Spectrum or its subsidiaries at the time of the Executive’s termination is eight (8) years, the Executive will be entitled to fifty-two (52) weeks of Severance Payment.
(a) To the extent owed pursuant to this Agreement, following a termination pursuant to Section 2.1, Spectrum shall pay, during the Severance Period, to the Executive as severance an amount in cash equal to the sum of 100% of the Executive’s weekly base salary in effect at the time such termination occurs for each week of the Severance Period, subject to required witholdings and deductions, to be paid in accordance with Spectrum’s regular payroll process and schedule. Severance payments pursuant to this Section 2.3(a) shall cease immediately upon the discovery by the Company of the Executive’s breach of the covenants contained in Sections 5, 6 or 7 hereof.
(b) To the extent owed pursuant to this Agreement, following a termination pursuant to Section 2.1, and during the Severance Period (this period may end earlier if the Executive obtains or has the opportunity to participate in individual or family coverage through another employer), Spectrum shall arrange to provide the Executive and, to the extent applicable, the Executive’s dependents, subsidized health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“ReleaseCOBRA”) as described below. The Executive’s right to subsidized COBRA is contingent on the Executive being eligible for and delivered timely electing COBRA coverage, and subject to Employee no later than five business days after the Termination Dateconditions that: (i) the Executive shall be responsible for immediately notifying Spectrum if the Executive obtains or has the opportunity to participate in individual or family coverage through another employer during the Severance Period, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding Executive will be responsible for the Release, entire COBRA premium amount after the end of the Severance Period; and (iii) Employee if the Executive declines COBRA coverage, then Spectrum will not make any alternative payment to the Executive in lieu of paying for COBRA premiums. During the Severance Period, Spectrum agrees that Spectrum shall pay for the employer portion of providing such healthcare coverage, and the Executive shall pay the employee portion of providing such healthcare coverage that is substantially similar to other employees of the same level as the Executive. Health benefit contributions pursuant to this Section 2.3(b) shall cease immediately upon the discovery by the Company of the Executive’s breach of the covenants contained in strict compliance Sections 5, 6 or 7 hereof.
(c) Notwithstanding the foregoing, if any payment or benefit in accordance with the terms of this Agreement as is reasonably determined by either party to be subject, for any reason, to a material risk of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation additional tax under section 409A of the CodeInternal Revenue Code of 1986, and finally if an exemption from as amended, then payment will be suspended until the six-month delay requirement parties can agree, in good faith, on provisions to avoid such risk without materially changing the economic value of section 409A(a)(2)(B)(i) of this Agreement to either party.
2.4 Notwithstanding anything else herein to the Code is not availablecontrary, the EmployeeExecutive will not be eligible to receive any Severance Payments if the Executive: (a) is terminated by Spectrum for Cause (as defined below); (b) resigns for any reason; (c) fails (or in the event of death or Disability, the Executive's estate, heirs or administrator, as applicable, fail) to execute the separation agreement with a release of claims in form and content agreeable to Spectrum within fifty-five (55) days after the Executive’s Severance Pay payments for separation (or such longer applicable time period if required by applicable law); or (d) as reasonably determined by Spectrum, breaches the first six months following separation from service shall be paid covenants contained in Sections 5, 6 or 7 hereof.
2.5 Notwithstanding anything else herein to the Employee contrary, in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vestingExecutive executes a separation agreement that becomes effective according to its terms, acceleration and payment of any equity awards or other compensation or benefitsif the Company, together with all other payments and during the value of any benefit received or to be received by two-year period after the Employee under this Agreement would result separation agreement’s effective date (as defined in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”applicable separation agreement), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employmentacquires evidence that: (i) the payment of Executive has failed to abide by the EmployeeExecutive’s base salary and any other form continuing obligations under Sections 5, 6 or type of compensation earned, vested and payable through the Date of Termination7 hereof; or (ii) a “Cause” condition existed prior to the right Executive’s termination date that, had the Company been fully aware of such condition, would have resulted in the termination of the Executive’s employment for Cause pursuant to receive this Agreement, then, upon written notice from the Company to the Executive, in addition to any and all benefits to rights that the Company shall have under contract or law, the Executive shall promptly return all severance or benefit payments with the exception of $1,000, which the Employee is vested on Executive agrees shall remain the Date consideration for the Executive’s release of Termination in accordance with claims pursuant to the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsapplicable separation agreement.
Appears in 1 contract
Severance Payments. a. Except 6.1 Subject to Section 6.2 hereof and subject to Executive entering into a release of claims in substantially the form attached hereto as provided Appendix I, the Company shall pay the Executive the payments and provide the benefits described in this Section 5(b), 6.1 ("Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control during the term of this Agreement, in addition to the payments and benefits described in Section 5.0 hereof, unless such termination is (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason. The Executive's employment shall be deemed to have been terminated following a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated Control by the Company without Cause or by the Employee for Executive with Good Reason, and (ii) Reason if the Termination Date occurs within 24 months immediately following Executive's employment is terminated prior to a Change in ControlControl without Cause at the direction (or action which constitutes a direction) of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control or if the Executive terminates his employment with Good Reason prior to a Change in Control (determined by treating a Potential Change in Control as a Change in Control in applying the definition of Good Reason) if the circumstance or event which constitutes Good Reason occurs at the direction (or action which constitutes a direction) of such Person.
(i) Subsequent to the Date of Termination, the Employee Company shall receive 2.99 make cash severance payments to the Executive over a twenty-four (24) month period in substantially equal bi-weekly installments, in an amount equal to two (2) times the Severance Pay calculated sum of (a) the higher of the Executive's annual base salary in accordance with Section 5(a), which shall be paid effect immediately prior to Employee by the Company in a lump sum on the later occurrence of 60th day following the Termination Date or the closing on the event constituting or circumstance upon which the Notice of Termination is based or in effect immediately prior to the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)) the higher of the highest annual bonus paid to the Executive in the three years preceding the year in which the Date of Termination occurs or paid in the three years preceding the year in which the Change in Control occurs.
(ii) For a twenty-four (24) month period after the Date of Termination, the Company will not be obligated shall arrange to make provide the Executive with medical and dental insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any payments reduction in such benefits subsequent to or on behalf of Employee under Section 5(a) and (ba Change in Control which reduction constitutes Good Reason), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared . Benefits otherwise receivable by the Company (the “Release”Executive pursuant to this Section 6.1(ii) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect shall be reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Executive without limitation cost during the right to seek specific performance or an injunction.
d. If, when twenty-four (24) month period following the Employee’s Executive's termination of employment occurs(and any such benefits actually received by the Executive shall be reported to the Company by the Executive). If the benefits provided to the Executive under this Section 6.1(ii) shall result in a decrease, pursuant to Section 6.2, in the Change in Control Payments and these Section 6.1(ii) benefits are thereafter reduced pursuant to the immediately preceding sentence because of the receipt of comparable benefits, the Employee is a specified employee within Company shall, at the meaning time of section 409A such reduction, pay to the Executive the lesser of (a) the amount of the Code, and if decrease made in the Severance Pay would be considered deferred compensation under section 409A of Payments pursuant to Section 6.2, or (b) the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the seventh month after the month in which the Employee’s separation from service occursCode.
e. In 6.2 Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result Executive in all connection with a Change in Control or a portion of such payment being subject to excise tax under Section 4999 the termination of the CodeExecutive' s employment (whether or not received pursuant to the terms of this Agreement) (all such payments and benefits, including but not limited to the Severance Payments, being hereinafter called the "Total Payments") would be subject in whole or in part to the Excise Tax, then the amounts due under Section 5(b) that the Company Severance Payments shall pay be reduced to the Employee shall be either (i) extent, but only to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent, necessary so that would result in no portion of the payment being Total Payments is subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax; provided, results in that no such reduction shall be effected unless the receipt by the Employee, on an after-tax basis, of the greatest net amount of the payment notwithstanding that all or some portion Total Payments after such reduction in the Severance Payments and after deduction of the payment may net amount of federal, state and local income taxes on such reduced Total Payments would be taxable under Section 4999 greater than the excess of (a) the net amount of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced Total Payments without such reduction in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A Severance Payments but after deduction of the Code net amount of federal, state and regulations promulgated thereunderlocal income taxes (other than the Excise Tax) on such unreduced Total Payments, disregard over (b) the acceleration Excise Tax to which the Total Payments are subject. The determination as to whether a reduction in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required Severance Payments is to be made under this Section 5(e) 6.2 and, if so, the amount of any such reduction shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately 's auditors or by such other firm of certified public accountants, benefits consulting firm or legal counsel as the Board may designate prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”)Change in Control. The Company shall cause provide the Accounting Firm to provide detailed supporting executive with its calculations of its determinations the amounts referred to in this Section 6.2 and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations.
6.3 The Company also shall pay to the Company Executive all legal fees and Employee. Notice must be given expenses incurred by the Executive as a result of a termination which entitles the Executive to the Accounting Firm Severance Payments (including all such fees and expenses, if any, incurred in disputing any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). Such payments shall be made within 15 five (5) business days after an event entitling Employee to an amount due under this Agreement. All delivery of the Executive's written requests for payment accompanied with such evidence of fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination incurred as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeereasonably may require.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Officer Change in Control Agreement (Polycom Inc)
Severance Payments. a. Except as provided in Section 5(b), upon 5.1 If the termination of EmployeeExecutive’s employment is terminated following a Change in Control and during the Term, other than (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then, the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 5.1 (“Severance Payments”) and Section 5.2, in addition to any payments and benefits to which the Executive is entitled under Section 4 hereof. Solely for purposes of determining whether termination occurred following a Change in ControlControl pursuant to this Agreement (and without any implication that a Change in Control has in fact occurred), the Employee Executive’s employment shall be entitled deemed to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program have been terminated following a Change in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee Control by the Company over a period of 12 months from without Cause or by the Termination Date in accordance Executive with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e)Good Reason, if (i) the EmployeeExecutive’s employment is terminated by the Company without Cause prior to a Change in Control and such termination was at the request, direction or by suggestion, directly or indirectly, of a Person who has entered into an agreement or with whom the Employee for Good ReasonCompany contemplates will enter into an agreement with the Company the consummation of which would constitute a Change in Control or, and (ii) the Termination Date occurs within 24 months immediately following Executive terminates his employment for Good Reason prior to a Change in ControlControl and the circumstance or event which constitutes Good Reason occurs at the request, direction or suggestion of such Person described in clause (i). For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Executive shall be presumed to be correct unless the Company establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Employee Company shall receive 2.99 times pay to the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in Executive a lump sum severance payment, in cash, equal to $2,250,000.
(B) For the thirty-six (36) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, disability, accident and health insurance benefits and perquisites (including, but not limited to, executive life insurance, club memberships, financial planning and tax preparation, annual physical examination and charitable contributions), in each case, substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method (after taking into account the effect of such method on the later calculation of 60th day “parachute payments” pursuant to Section 5.2 hereof), such health insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 5.1(B) shall be reduced to the extent benefits of the same type are received by the Executive under any individual or group policy or program, or made available to the Executive under a group plan whether by reason of the employment of the Executive or the employment of the spouse of the Executive, during the thirty-six (36) month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination Date or, if more favorable to the Executive, the first occurrence of an event or the closing on the event circumstance constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfiedGood Reason.
c. (C) Notwithstanding any provision of that certain Employment Agreement between the foregoing provisions Company and the Executive effective as of Section 5(a) and February 1, 2004 (bthe “Employment Agreement”), the Company will not be obligated shall pay to make any payments the Executive a lump sum amount, in cash, equal to or on behalf the aggregate value of Employee under the contingent bonus award contemplated by Section 5(a4(b) and of the Employment Agreement that the Executive would have earned as of the last day of the Base Period (bas defined in the Employment Agreement), as applicableassuming the achievement, unless (i) Employee signs a release of claims in favor at the expected value target level, of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law performance goals established with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunctionsuch award.
d. If(D) The committee (as defined by the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Services, when Inc. 1998 Nonstatutory Stock Option Plan) shall deem the EmployeeExecutive’s termination of employment occursas a retirement for purposes of the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Services, Inc. 1998 Nonstatutory Stock Option Plan.
(E) If a Change in Control occurs prior to January 4, 2005 the Company shall pay to the Executive a lump sum payment, in cash, equal to the Black-Scholes value, as reasonably determined by the Company as of March 31, 2004, of an option to purchase 100,000 shares of the Company’s common stock, assuming for this purpose the option was granted on March 31, 2004, the Employee per share exercise price under the option is a specified employee within $ 14.62, the meaning option has the same terms and conditions as applied to the option granted by the Company to the Executive on March 31, 2004 (other than the number of section 409A shares subject to the option), and the option remains outstanding for the full ten year term; and utilizing the risk free interest rate, dividend yield, and expected volatility assumptions used by the Company for purposes of valuing stock options for its 2003 fiscal year as reflected in its fiscal year 2003 Form 10-K filed with the Securities and Exchange Commission.
5.2 (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit benefits received or to be received by the Employee under Executive in connection with a Change in Control or the Executive’s termination of employment (whether pursuant to the terms of this Agreement would or any other plan, arrangement or agreement with the Company, any Person whose actions result in all a Change in Control or a portion of any Person affiliated with the Company or such payment Person) (such payments or benefits, excluding the Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be subject to excise tax under Section 4999 of the CodeExcise Tax, then the amounts due under Section 5(b) that the Company shall pay to the Employee Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, shall be either equal to the Total Payments.
(B) 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) all of the full payment Total Payments shall be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) such lesser amount determined by all “excess parachute payments” within the Company in accordance with this Section 5(emeaning of section 280G(b)(1) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code shall be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the “Excise Tax”), whichever meaning of section 280G(b)(4)(B) of the foregoing amountsCode) in excess of the Base Amount allocable to such reasonable compensation, taking into account the applicable Federal, state, and local employment taxes, income taxes, and or are otherwise not subject to the Excise Tax, results in and (iii) the receipt value of any noncash benefits or any deferred payment or benefit shall be determined by the Employee, on an after-tax basis, Auditor in accordance with the principles of section 280G(d)(3) and (4) of the greatest Code. For purposes of determining the amount of the payment notwithstanding Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the Date of Termination (or if there is no Date of Termination, then the date on which the Gross-Up Payment is calculated for purposes of this Section 5.2), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
(C) In the event that all or some the Excise Tax is finally determined to be less than the amount taken into account hereunder in calculating the Gross-Up Payment, the Executive shall repay to the Company, within five (5) business days following the time that the amount of such reduction in the Excise Tax is fully determined, the portion of the payment may be 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 and employment taxes imposed on the Gross-Up Payment being repaid by the Executive, to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable under Section 4999 income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In the event that the amounts due under Section are reducedExcise Tax is determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the amounts Company shall be reduced make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the following order of priority: first, Executive with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in such excess) within five (5) business days following the time that the amount of payment such excess is finally determined. The Executive and then disregard the acceleration Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of vesting as a result of a Change in Control and second, liability for Excise Tax with respect to any amount the Total Payments.
5.3 The payments provided in subsection (A) and (C) of Section 5.1 hereof and in Section 5.2 hereof shall be made not later than the fifth day following the Date of Termination; provided, however, that constitutes if the “deferral amounts of compensation” such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Executive or, in the case of payments under Section 409A 5.2 hereof, in accordance with Section 5.2 hereof, of the Code minimum amount of such payments to which the Executive is clearly entitled and regulations promulgated thereunder, disregard shall pay the acceleration in remainder of such payments (together with interest on the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only unpaid remainder (or on all such payments to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given fails to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses make such payments when due) at 120% of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(dprovided in section 1274(b)(2)(B) of the Code) compounded based on as soon as the nature of amount thereof can be determined but in no event later than the payment, as in effect on thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at 120% of the rate provided in section 1274(b)(2)(B) of the Code), but if only to the extent such amount has not otherwise specified, compounded on a semiannual basis. The determination been paid by the Accounting Firm Executive pursuant to Section 5.2(C) above. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be final and binding on attached to the Company and the Employeestatement).
f. 5.4 If Employeethe Executive’s employment with the Company is terminated by following a Change in Control and during the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Term, then the Company shall pay to Employee only his base salary the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition issue hereunder relating to the benefits otherwise termination of the Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in Section 5, connection with any tax audit or proceeding to the Employee extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be entitled to the following benefits and payments upon the Employee’s termination of employment: made within five (i5) the payment business days after delivery of the EmployeeExecutive’s base salary written requests for payment accompanied with such evidence of fees and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under expenses incurred as the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsreasonably may require.
Appears in 1 contract
Sources: Severance Agreement (Stewart & Stevenson Services Inc)
Severance Payments. a. Except as provided in 6.1. Subject to Section 5(b)6.2 hereof, upon if the termination of Employee’s Executive's employment is terminated during the Term, other than (A) by the Company other than for Cause prior to a Change in ControlCause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, the Employee Company shall be pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 ("Severance Payments"), in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof.
(A) In lieu of any further salary payments to an amount the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to three times the aggregate sum of one times: (i) the annual rate of Executive's base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program as in which the Employee was entitled to participate effect immediately prior to the Date of Termination Date (the aggregated amountor, the “Severance Pay”)if higher, which shall be paid in effect immediately prior to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date occurrence of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause an event or by the Employee for circumstance constituting Good Reason, and (ii) the target bonus in effect, pursuant to any annual bonus or incentive plan maintained by the Company, for the fiscal year during which the Date of Termination Date occurs within 24 months or, if higher, for the fiscal year during which first occurs an event or circumstance constituting Good Reason.
(B) For the thirty-six (36) month period immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later Date of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)Termination, the Company will not be obligated shall arrange to make any payments provide the Executive and his dependents life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method (after taking into account the effect of such method on behalf the calculation of Employee under "parachute payments" pursuant to Section 5(a) and (b6.2 hereof), as applicable, unless (isuch health insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) Employee signs a release of claims in favor shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the thirty-six (36) month period following the Executive's termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company in a form as prepared by the Executive); provided, however, that the Company (shall reimburse the “Release”Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason. If the Severance Payments shall be decreased pursuant to Section 6.2 hereof, and the Section 6.1(B) and delivered benefits which remain payable after the application of Section 6. 2 hereof are thereafter reduced pursuant to Employee the immediately preceding sentence, the Company shall, no later than five (5) business days after following such reduction, pay to the Termination DateExecutive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (iib) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as amount of the dates of subsequent reduction in these Section 6.1(B) benefits, or (c) the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day Executive without being, or causing any other payment to be, nondeductible by reason of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 280G of the Code.
(C) Notwithstanding any provision of any annual or long-term incentive plan to the contrary, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either Executive a lump sum amount, in cash, equal to the sum of (i) the full payment any unpaid incentive compensation which has been allocated or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only awarded to the extent necessary to satisfy (ii) above. All determinations required to be made Executive for a completed fiscal year or other measuring period preceding the Date of Termination under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company any such plan and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the paymentwhich, as in effect on of the Date of Termination, but if not otherwise specifiedis contingent only upon the continued employment of the Executive to a subsequent date, compounded and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on a semiannual basis. The determination the last day of the performance award period, assuming the achievement, at the target level, of the individual and corporate performance goals established with respect to such award, by the Accounting Firm shall be final fraction obtained by dividing the number of full months and binding on any fractional portion of a month during such performance award period through the Company and Date of Termination by the Employeetotal number of months contained in such performance award period.
f. If Employee’s employment with (D) In addition to the Company retirement benefits to which the Executive is terminated by entitled under the Company for Cause or for any reason not covered by Pension Plans under Section 5(a) or 5(b)5.2 hereof, then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition Executive a lump sum amount, in cash, equal to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination excess of employment: (i) the payment actuarial equivalent of the Employee’s base salary aggregate retirement pension (taking into account any early retirement subsidies associated therewith and any other form or type determined as a straight life annuity commencing at the date (but in no event earlier than the third anniversary of compensation earned, vested and payable through the Date of Termination; ) as of which the actuarial equivalent of such annuity is greatest) which the Executive would have accrued under the terms of the Pension Plans, determined as if the Executive were fully vested thereunder and had accumulated (after the Date of Termination) thirty-six (36) additional months of service credit hereunder and had been credited under each Pension Plan during such period with compensation equal to the Executive's compensation (as defined in the Pension Plans) during the twelve (12) months immediately preceding the Date of Termination or, if higher, during the twelve months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, over (ii) the right to receive all benefits to actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the Date of Termination) as of which the Employee actuarial equivalent of such annuity is vested on greatest) which the Executive had accrued pursuant to the provisions of the Pension Plans as of the Date of Termination. For purposes of this Section 6.1(D), "actuarial equivalent" shall be determined using the same assumptions utilized under the Harvard Retirement Plan immediately prior to the Date of Termination in accordance or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason.
(E) The Company shall provide the Executive with outplacement services suitable to the terms under Executive's position for a period of three years or, if earlier, until the Company pension and welfare benefit plans or any successor first acceptance by the Executive of such plan and any other plan or agreement relating to retirement benefitsan offer of employment; and (iii) provided, however, that the right to exercise and Executive may elect to receive all rights in which a lump sum cash payment, payable no later than the Employee is vested on fifth day following the Date of Termination, in accordance with an amount equal to the terms value of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any one year of such plans or programsservices.
Appears in 1 contract
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, the Company shall pay the Executive the payments described in this Section 5(b), 6.1 (the "Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control and during the term of this Agreement, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof, unless such termination is (i) by the Company other than for Cause prior to a Change in ControlCause, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average by reason of the past three years short term bonus payExecutive's death or Disability, plus or (iii) by the Company’s portion Executive without Good Reason. For purposes of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amountthis Agreement, the “Severance Pay”), which Executive's employment shall be paid deemed to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause Cause
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to three (3) times the sum of (i) the greater of the Executive's annual base salary in effect immediately prior to the occurrence of the event or by circumstance upon which the Employee for Good ReasonNotice of Termination is based or the Executive's annual base salary in effect immediately prior to the Change in Control, and (ii) the greater of the average of the annual bonuses earned or received by the Executive from the Company or its subsidiaries in respect of the two (2) consecutive fiscal years immediately preceding that in which the Date of Termination occurs or the average of the annual bonuses so earned or received in respect of the two (2) consecutive fiscal years immediately preceding that in which the Change in Control occurs.
(B) Notwithstanding any provision of any annual or long-term incentive plan to the contrary, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any incentive compensation which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date occurs within 24 of Termination under any such plan but which, as of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date or otherwise has not been paid, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level, of the individual and corporate performance goals established with respect to such award, by the fraction obtained by dividing the number of full months immediately and any fractional portion of a month during such performance award period through the Date of Termination by the total number of months contained in such performance award period.
(C) Notwithstanding any provision of the Company's supplemental pension and thrift plans (the "Supplemental Plans") to the contrary, upon the termination of the Executive's employment by the Executive for Good Reason or by the Company, in either case at any time following the occurrence of a Change in ControlControl and during the term of this Agreement, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which Executive shall be paid deemed to Employee by have an additional thirty-six (36) months of benefit credit under each of the Supplemental Plans and shall be entitled to receive such additional credit either (1) as part of the benefit otherwise payable under the Supplemental Plan or (2) as a lump sum.
(D) For the thirty-six (36) month period immediately following the Date of Termination, the Company in a lump sum shall arrange to provide the Executive with life, disability, accident and health insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any
(E) If the Executive would have become entitled to benefits under the Company's post-retirement health care or life insurance plans had the Executive's employment terminated at any time during the period of thirty-six (36) months after the Date of Termination, the Company shall provide such post-retirement health care or life insurance benefits to the Executive commencing on the later of 60th day following (i) the Termination Date or date that such coverage would have first become available and (ii) the closing on date that like benefits described in subsection (D) of this Section 6.1 terminate.
(F) From and after the event constituting the occurrence of Change in ControlControl and notwithstanding any provision in the Company's 1995 Stock Option and Retention Stock Plan (or any agreement entered into thereunder or any successor stock compensation plan or agreement thereunder) to the contrary, provided any Option held by the conditions specified in Section 5(c) have been Executive shall be fully exercisable and any restriction on any Retention Share held by the Executive shall lapse or be deemed fully satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless .
(iA) Employee signs a release of claims in favor of Whether or not the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect Executive becomes entitled to the Release have expired without Employee rescinding the ReleaseSeverance Payments, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, if any other remedies at law payment or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result Executive in all connection with a Change in Control or a portion the termination of the Executive's employment (whether pursuant to
(B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such payment being subject to excise tax under Section 4999 Excise Tax, (i) all of the Total Payments shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, then unless in the amounts due under Section 5(bopinion of tax counsel (the "Tax Counsel") that the Company shall pay reasonably acceptable to the Employee shall be either Executive and selected by the accounting firm (ithe "Auditor") which was, immediately prior to the full payment Change in Control, the Company's independent auditor, such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) such lesser amount determined by all "excess parachute payments" within the Company in accordance with this Section 5(emeaning of section 280G(b)(1) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code shall be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments (in whole or part) represent reasonable compensation for services actually rendered, within the “Excise Tax”), whichever meaning of section 280G(b)(4)(B) of the foregoing amountsCode, taking into account in excess of the applicable FederalBase Amount allocable to such reasonable compensation, state, and local employment taxes, income taxes, and or are otherwise not subject to the Excise Tax, results in and (iii) the receipt value of any noncash benefits or any deferred payment or benefit shall be determined by the Employee, on an after-tax basis, Auditor in accordance with the principles of section 280G(d)(3) and (4) of the greatest Code. Prior to the payment
(C) In the event that (i) amounts are paid to the Executive pursuant to subsection (A) of this Section 6.2, and (ii) the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment, the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 Gross-Up Payment attributable to such reduction 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 amounts due under Section are reducedExcise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the 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), the amounts Company shall be reduced make an additional Gross-Up Payment to the Executive in respect of such excess (plus any interest, penalties or additions payable by the following order of priority: first, Executive with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code such excess and regulations promulgated thereunder, disregard the acceleration in such portion) at the time that the amount of payment such excess is finally determined.
6.3 The payments provided for in subsections (A), (B) and, if applicable, (C) of Section 6.1 hereof and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) 6.2 hereof shall be made by a nationally recognized accounting firm not later than the fifth day following the Date of Termination; provided, however, that is if the Company’s outside auditor immediately prior amounts of such payments, or, if applicable, the Excise Tax, cannot be finally determined on or before such day, the Company shall pay to the event triggering Executive on such day an estimate, as determined in good faith by the payments that are subject to Executive or, in the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations case of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due Gross-Up Payments under this Agreement. All fees and expenses Section 6.2 hereof, in accordance with Section 6.2 hereof, of the Accounting Firm minimum amount of such payments to which the Executive is clearly entitled and shall be borne solely by pay the Company. The Accounting Firm’s determinations must be made remainder of such payments (together with substantial authority (within interest at the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(dprovided in section 1274(b)(2)(B) of the Code) compounded based on as soon as the nature of amount thereof can be determined but in no event later than the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. thirtieth
6.4 The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company also shall pay to Employee only his base salary the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition issue relating to the benefits otherwise termination of the Executive's employment following a Change in Control (including a termination of employment following a Potential Change in Control if the Executive alleges in good faith that such termination will be deemed to have occurred following a Change in Control pursuant to the second sentence of Section 6.1 hereof) or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in Section 5, connection with any tax audit or proceeding to the Employee extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be entitled to made as such fees and expenses are incurred by the following benefits and payments upon the Employee’s termination of employment: Executive, but in no event later than five (i5) the payment business days after delivery of the Employee’s base salary Executive's written requests for payment accompanied with such evidence of fees and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under expenses incurred as the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsreasonably may require.
Appears in 1 contract
Sources: Executive Employment Agreement (Union Pacific Resources Group Inc)
Severance Payments. a. Except as provided Subject to Section 4(c) below, in Section 5(b), upon the event of any termination of Employee’s employment by pursuant to Section 3(b) or Section 3(c) above, the Company other than for Cause prior will pay Employee, in addition to a Change in ControlFinal Compensation, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate Base Salary for the period of base salary then being paid to twelve (12) months from the Employee, plus date of termination (ii) the average of Target Bonus for the past three years short term bonus paycalendar year in which Employee’s employment terminates, plus pro-rated through the date that Employee’s employment terminates; (iii) one (1) times the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program Target Bonus; in which the Employee was entitled to participate immediately prior to the Termination Date cases (the aggregated amount, the “Severance Pay”i), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date (ii) and (iii), payable in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates equal installments during the period of 60 days following Base Salary continuation under clause (i); and (iv) provided Employee timely elects continuation coverage for Employee and Employee’s eligible dependents under the Termination Date)federal law known as “COBRA” or similar state law, provided a monthly amount that equals the conditions specified in Section 5(cportion of the monthly health premiums paid by the Company on Employee’s behalf and that of Employee’s eligible dependents immediately preceding the date that Employee’s employment terminates until the earlier of (A) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if last day of the period of Base Salary continuation under clause (i) and (B) the date that Employee and Employee’s eligible dependents become ineligible for COBRA coverage to the extent permissible by law and plan terms. The severance payments described in clauses (i) through (iv) above are referred to as the “Severance Payments”. In addition, in the event of any termination of Employee’s employment is terminated pursuant to Section 3(b) or Section 3(c) above, any unvested equity awards held by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available immediately prior to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A that would have vested as of the Code, and if the Severance Pay would be considered deferred compensation under section 409A first anniversary of the Code, and finally if an exemption from the six-month delay requirement date of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for termination of employment had Employee remained in continuous employment with the Company or any subsidiary through such first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the anniversary will vest upon Employee’s separation from service occurs.
e. In the event that the vesting, acceleration termination of employment and payment of any such equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to exercise shall remain exercisable until the Excise Tax earlier of three (3) months following the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations date of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) employment and the payment last day of the Employee’s base salary and any other form or type of compensation earned, vested and payable through option term (the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs“Equity Acceleration”).
Appears in 1 contract
Sources: Employment Agreement (EyePoint Pharmaceuticals, Inc.)
Severance Payments. a. Except as provided If during the Term of Employment, (i) whether or not a Change in Section 5(b)Control or Potential Change in Control has occurred, upon the termination of Employee’s employment by the Company terminates the employment of Executive other than for Cause prior to Cause, (ii) a Change in ControlControl or Potential Change in Control has occurred and Executive has complied with Section 6 of this Agreement, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus or (iii) the CompanyExecutive’s portion of 12 months’ premiums under any healthduties, disability and life insurance plan responsibilities or program in which the Employee was entitled to participate immediately prior to the Termination Date authority (the aggregated amountincluding status, the “Severance Pay”)office, which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycletitle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(creporting relationships or working conditions) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption materially altered from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as those in effect on the Date date of Terminationthis Agreement, but if not otherwise specified, compounded on a semiannual basis. The determination by (iv) the Accounting Firm shall be final and binding Executive has been required to relocate to an office or related entity more than fifty (50) miles from the office where Executive was located on the date hereof, or (v) the Company and has breached any of its obligations under this Agreement, then, in any such event (at the Employee.
f. If EmployeeExecutive’s option in the case of any event described in clause (ii) through (v) above), the Executive’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company hereunder shall pay to Employee only his base salary cease and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee Executive shall be entitled to the following benefits and payments upon the Employee’s termination of employment: benefits:
(ia) the payment of Company will pay to Executive the EmployeeExecutive’s then current base salary for the twelve (12) month period following the date of such termination subject to applicable withholdings and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under regular payroll practices of the Company pension and welfare benefit plans or any successor the Company will also pay the annual restricted stock grant and target bonus described in Section 5.2 for the twelve (12) month period following the date of such termination, except that in the case of a Change in Control, Potential Change in Control, or termination under Section 12.1(b) the payment period for salary continuation, stock grant and bonus will be twenty-four (24) months, and
(b) continuous coverage, at the Company’s expense, under any group health plan and any other plan benefits described in Section 5.3 maintained by or agreement relating to retirement benefits; and (iii) on behalf of the right to exercise and to receive all rights Company, in which the Employee is vested on Executive participated as of the Date of Termination, for the twelve (12) month period following the date of termination, except that in accordance with the case of Change in Control, Potential Change in Control or termination under Section 12.1(b) coverage will be for twenty-four (24) months following the date of termination, and
(c) continued participation in the Annual Bonus Plan referenced in Section 5.2, on a pro rata basis for the calendar year in which termination under Sections 7 or 12.1(b) occurs. Executive’s right to continued coverage under this section shall in no way reduce or limit any continuation coverage under such group health plan to which Executive or any of Executive’s qualified beneficiaries are entitled under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or Minnesota Statutes §§ 61A.092 and 62A.17 et seq. This extension of coverage, however, shall be coordinated with, and shall be provided concurrently with, any benefits or continuation rights otherwise available to Executive and Executive’s eligible dependents under state or federal continuation of coverage statutes, including but not limited to, Minnesota Statutes §§ 61A.092 and 62A.17 et seq. and the federal Consolidated Omnibus Budget Reconciliation Act (“COBRA”). Accordingly, within ten (10) days after the date of termination, Executive and Executive’s dependents who are eligible for such statutory continuation rights shall complete all forms and papers necessary and customary to elect such continuation coverage. The Parties expressly agree that the extension of benefits provided for by this Agreement is not intended to create a retiree health plan covering any other employees. In all other respects, the payment of benefits, including the amounts and timing thereof, to Executive and Executive’s eligible dependents will be governed by the terms of all awards applicable employee benefit plans for which Executive and Executive’s dependents are eligible. The Company will answer any reasonable questions that Executive may have from time to time and will offer him the same assistance given other participants in employee benefit plans so long as Executive is entitled to benefits as provided herein or under the terms of those plans. Nothing in this Agreement, including the Severance Payments described in this Section 7, shall in any Company stock purchase and stock incentive plans or programs, or any successor way be construed to any such plans or programsextend the period of Executive’s employment with the Company.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal Subject to the aggregate provisions of one times: subsection (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(ad) and subject to Section 11 below and the limitation other terms and conditions of this Letter Agreement, in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs Executive has incurred a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption Separation from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority Service (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h)) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on (“Separation from Service”) from the Company and Clarient by reason of a termination of Executive’s employment: (i) by the Employee.
f. If EmployeeCompany, at Clarient’s request, without “cause”, (ii) by Executive for “good reason” within twelve months after a Change of Control, or (iii) by Executive as a result of Executive’s death or disability (any of the foregoing being a “Severance Termination”), the Company will provide Executive the benefits described in this Section 6, which shall be the only severance benefits or other payments with respect to Executive’s employment with the Company is terminated to which Executive shall be entitled. Without limiting the generality of the foregoing, these benefits are in lieu of all salary, bonuses and vacation accruals (except for salary, bonuses and vacation accruals for periods ending on the date of termination as provided in Section 8 below) and other rights Executive may have against the Company, Clarient or any of their respective affiliates.
(a) If a Severance Termination occurs, Executive will receive payment of an amount equal to twelve (12) months of his base salary in effect at the time of the Severance Termination.
(b) Upon a Severance Termination, Executive will be able to exercise any options which have become vested and exercisable on or before the termination date and until the earlier of (i) the first anniversary of the date of termination or (ii) the expiration date of the option. To the extent inconsistent with any Option Agreement, this Section 6(b) shall constitute an amendment to such Option Agreement and, except as expressly provided herein, all terms and conditions of such Option Agreement shall remain in full force and effect.
(c) Upon a Severance Termination, Executive will receive continued coverage under the Company’s medical and health plans in accordance with COBRA rules and regulations following the termination date (including any period as may be required by law), provided that coverage will end if Executive obtains comparable coverage from a subsequent employer or otherwise ceases to be eligible for COBRA benefits. If Executive chooses such continuation health insurance coverage, Executive will only pay the amount paid by Executive during his employment and the Company will subsidize the remaining costs which are normally the responsibility of the former employee for twelve months or until Executive obtains insurance through another employer, whichever occurs sooner. Thereafter, Executive shall be solely responsible for paying the premiums for COBRA continuation coverage. If Executive ceases to be eligible for COBRA because the Company does not pay the premiums for its existing or group insurance policy or the Company ceases to have a group healthcare plan, the Company will pay Executive, for any portion of the period referred to above during which Executive’s COBRA eligibility ceases for such reasons, the amount of the premium it would have had to pay for Executive’s coverage under the then existing, or if none, the most recently existing, healthcare insurance policy. Executive should consult with the Company’s Manager of Human Resources concerning the process for assuming ownership of and continued premium payments for any life insurance policy. Executive will be reimbursed in accordance with Company policies promptly for all of Executive’s reasonable and necessary business expenses incurred on behalf of the Company prior to Executive’s termination date. Without limiting the Company’s obligation under the preceding sentence, the reimbursement of any expense under this subsection (c) shall be made no later than December 31 of the year following the year in which the expense was incurred.
(d) All compensation and benefits described above in (a) through (c) of this Section 6 will be contingent upon (i) Executive’s execution of a release of all claims against the Company and Clarient substantially in the form of Exhibit A and expiration of the seven-day revocation period referred to in the release, and (ii) Executive’s not engaging in any Solicitation (as defined in Section 7 of this Letter Agreement) during the period of his employment by the Company for Cause or for any reason not covered by the one-year period following Executive’s termination date.
(e) Subject to Section 5(a) or 5(b)11 below, then the Company shall will pay Executive the amount described in (a) above in equal bi-weekly installments for a period of twelve (12) months with the first payment being payable on the date when the seven-day revocation period referred to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition below with respect to the benefits otherwise provided release expires. The Company will prepare the final release (which will be substantially in Section 5, the Employee shall be entitled form attached as Exhibit A to the following benefits this Letter Agreement) and payments upon the Employeedeliver it to Executive within five business days of Executive’s termination of employment: . Executive will have twenty-one (i21) days in which to consider the payment release although Executive may execute it sooner. Please note that the release has a revocation period of seven days.
(f) In this Letter Agreement, the term “cause” means (a) Executive’s failure to adhere to any lawful written policy of the EmployeeCompany or Clarient (unless Executive’s base salary failure to adhere is at the request of the Board of Clarient) if Executive has been given a reasonable opportunity to comply with such policy and any other form or type cure Executive’s failure to comply (which reasonable opportunity to cure must be granted for a period of compensation earnedat least ten days and up to thirty days, vested and payable through the Date of Terminationif reasonable); (iib) the right to receive all benefits to which the Employee is vested on the Date Executive’s appropriation (or attempted appropriation) of Termination in accordance with the terms under a business opportunity of the Company pension and welfare benefit plans or Clarient, including attempting to secure or securing any successor personal profit in connection with any transaction entered into on behalf of such plan and any other plan the Company or agreement relating to retirement benefitsClarient; and (iiic) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.Executive’s misappropriation (or
Appears in 1 contract
Sources: Employment Agreement (Clarient, Inc)
Severance Payments. a. Except as provided in Section 5(b), upon (a) If the termination of Employee’s Executive's employment by the Company other than is terminated for Cause prior to a Change in Controlany reason including death, the Employee Executive or spouse of the Executive shall be entitled to an amount equal to receive the aggregate of one times: greater of:
(i) the annual rate of total of:
(A) 24 months' salary at the then applicable base salary rate;
(B) the present value, as determined by the Chairman, acting reasonably, of the benefits described in section 4(b) that would be enjoyed by the Executive during the consecutive 24 months assuming his employment was not terminated and assuming the then being current level of benefits were continued for those 24 months; and
(C) the present value, as determined by the Chairman, acting reasonably, of the amounts that would have been paid by the Corporation or reimbursed to the Employee, plus Executive pursuant to section 8 during the consecutive 24 months assuming that his employment had not been termination; and
(ii) the average salary otherwise payable to the Executive for the unexpired term of this agreement together with the other amounts described in clause 11 (b)(i), mutatis mutandis, provided that in no case will the Executive receive less than the amount to which he is entitled under the Employment Standards Act (Ontario). The payment described in this subsection 11(b) is the only severance payment the Executive will receive in the event of the past three years short term bonus pay, plus (iii) the Company’s portion termination of 12 months’ premiums under any health, disability and life insurance plan or program this agreement for reasons contemplated in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”this subsection 11(b), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a(b) and subject to the limitation in Section 5(e), if (i) the Employee’s The Executive's employment is terminated by as a result of the Company without Cause permanent disability or by death of the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in ControlExecutive, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date Executive or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)his estate, as applicable, unless (i) Employee signs a release of claims in favor shall be entitled to receive, within 30 days of the Company in a form as prepared by date of such termination, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as balance of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay base salary that would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall otherwise be paid to the Employee in a single lump sum on Executive during the first day remainder of the seventh month after term of this agreement. The Executive agrees to reasonably comply with all requirements necessary for the month in which Corporation to obtain life insurance for the Employee’s separation from service occursterm of this agreement.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b(c) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under this section 11, whenever a payment is to be determined with reference to the remaining term of this agreement, if less than six months remain in the term of this agreement and no party has given notice of its intention not to renew this agreement as contemplated by Section 280G 1, the "remaining term of this agreement" shall include the remainder of the Code and the application then existing term of this Section 5.1, all determination as to present value shall use 120 percent of agreement plus the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeerenewal period.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon 6.1 If the termination of EmployeeExecutive’s employment is terminated following a Change in Control and during the Term, other than (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”) and Section 6.2, in addition to a Change any payments and benefits to which the Executive is entitled under Section 5 hereof. Notwithstanding anything in Controlthis Agreement to the contrary, the Employee Executive shall not be entitled to an amount the payments and benefits provided in this Section 6 unless the Executive has incurred a “separation from service” under Section 409A of the Code.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to [CEO ONLY three (3) times the aggregate of one times: sum of] [SVPs ONLY two (2) times the sum of] [VPs ONLY the sum of] (i) the annual rate of Executive’s base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program as in which the Employee was entitled to participate effect immediately prior to the Date of Termination Date (the aggregated amountor, the “Severance Pay”)if higher, which shall be paid in effect immediately prior to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date occurrence of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause an event or by the Employee for circumstance constituting Good Reason, and (ii) the Executive’s target incentive opportunity pursuant to the Company’s Officer Annual Cash Incentive Plan or any successor thereto in respect of the fiscal year in which occurs the Date of Termination Date or, if higher, the fiscal year in which occurs within 24 months the first event or circumstance constituting Good Reason.
(B) For the thirty-six (36) month period immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later Date of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)Termination, the Company will not be obligated shall arrange to make any payments provide the Executive and his dependents life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or on behalf of Employee under Section 5(a) and (b)circumstance constituting Good Reason, as applicableat no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a different method [CEO ONLY (iafter taking into account the effect of such method on the calculation of “parachute payments” pursuant to Section 6.2 hereof)], such health insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1 (B) Employee signs a release of claims in favor shall be reduced to the extent benefits of the Company in a form as prepared same type are received by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity made available to the Company, including without limitation Executive during the right to seek specific performance or an injunction.
d. If, when thirty-six (36) month period following the EmployeeExecutive’s termination of employment occurs, (and any such benefits received by or made available to the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service Executive shall be paid reported to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received Company by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the CodeExecutive); provided, then the amounts due under Section 5(b) however, that the Company shall pay reimburse the Executive for the excess, if any, of the cost of such benefits to the Employee Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason.
(C) In addition to the retirement benefits to which the Executive is entitled under each Pension Plan or any successor plan thereto, the Company shall be either pay the Executive a lump sum amount, in cash, equal to the excess of (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion actuarial equivalent of the payment being subject to excise tax under Section 4999 of the Code aggregate retirement pension (the “Excise Tax”), whichever of the foregoing amounts, taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the applicable Federal, state, and local employment taxes, income taxes, and date (but in no event earlier than the Excise Tax, results in the receipt by the Employee, on an after-tax basis, third anniversary of the greatest amount Date of Termination) as of which the payment notwithstanding that actuarial equivalent of such annuity is greatest) which the Executive would have accrued under the terms of all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect Pension Plans (without regard to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of amendment to any Pension Plan made subsequent to a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately on or prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by which amendment adversely affects in any manner the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(bcomputation of retirement benefits thereunder), then determined as if the Company shall pay to Employee only his base salary Executive were fully vested thereunder and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: had accumulated (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through after the Date of Termination; ) thirty-six (36) additional months of service credit thereunder and had been credited under each Pension Plan during such period with compensation equal to the Executive’s compensation (as defined in such Pension Plan) during the twelve (12) months immediately preceding Date of Termination or, if higher, during the twelve months immediately prior to the first occurrence of an event or circumstance constituting Good Reason, over (ii) the right to receive all benefits to actuarial equivalent of the aggregate retirement pension (taking into account any early retirement subsidies associated therewith and determined as a straight life annuity commencing at the date (but in no event earlier than the Date of Termination) as of which the Employee actuarial equivalent of such annuity is vested on greatest) which the Executive had accrued pursuant to the provisions of the Pension Plans as of the Date of Termination. For purposes of this Section 6.1(C), “actuarial equivalent” shall be determined using the same assumptions utilized under the Company’s Salaried Employees’ Pension Plan immediately prior to the Date of Termination in accordance or, if more favorable to the Executive, immediately prior to the first occurrence of an event or circumstance constituting Good Reason.
(D) The Company shall provide the Executive with outplacement services suitable to the terms under Executive’s position for a period of three (3) years or, if earlier, until the Company pension and welfare benefit plans or any successor first acceptance by the Executive of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date an offer of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsemployment.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the [later of of] 60th day following the Termination Date [or the closing on the event constituting the Change in Control], provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except as provided In the event of an Involuntary Termination, and after the timely signing by the Employee or his estate of a release of all claims against the Company and its Affiliates that is in Section 5(b)form and substance satisfactory to the Company, upon the termination Company shall provide to the Employee or his estate a severance benefit (subject to applicable withholding requirements) equal to:
(a) an aggregate amount, payable in twenty-four (24) equal monthly installments, subject to applicable withholdings, equal to the sum of (i) an amount equal to twenty-four (24) months’ Base Salary (at such Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to then effective Base Salary) plus (ii) an amount equal to the aggregate of one times: (i) the annual rate of base salary then being average bonus paid to the Employee, plus (ii) Employee for the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately year period prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date such Involuntary Termination; and
(and including any installment that would have otherwise been paid on regular payroll dates during the period b) all of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by accrued but unpaid vacation, sick and personal days to the extent that Company without Cause or policy provides for payment of such accrued but unpaid amounts. provided, however, that in the event of a breach by the Employee for Good Reasonof any provision of Section 2, and (ii) 3, or 5 hereof that, in the Termination Date occurs case of any such breach that is capable of being cured, is not cured within 24 months immediately following a Change in Control30 days after receipt of written notice from the Company, the Employee or his estate, as applicable, shall have no right to receive 2.99 times the Severance Pay calculated in accordance with Section 5(a)any form of compensation, which shall be paid to Employee remuneration, payment under any note issued by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards repurchase, severance or other compensation or benefitsbenefit hereunder, together with all other payments and the value of any benefit received or to be received by except that the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee estate shall be entitled (subject to applicable withholding requirements) to receive any unpaid Base Salary earned up through the following benefits and payments upon date of the Employee’s termination of employment: (i) , subject to applicable withholdings, and all accrued but unpaid vacation, sick and personal days to the extent that the Company’s policy provides for payment of such accrued and unpaid amounts; and provided, further, however, that in the Employee’s base salary event the Employee obtains alternative employment while receiving severance payments hereunder, the Employee will promptly notify the Company of such alternative employment and any other form or type of compensation earnedthe Company will have no further obligation to pay, vested and payable through the Date of Termination; (ii) the Employee will have no further right to receive all benefits to which receive, any severance payments hereunder from and after the date the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of commenced such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsalternative employment.
Appears in 1 contract
Severance Payments. a. Except (a) Upon the occurrence of a Triggering Event, Company shall pay to Employee the amounts set forth below, which shall be payable in one lump sum payment within thirty (30) days of the Triggering Event, unless otherwise specifically provided for in the Plan or the subsections below:
(i) all amounts specifically set forth in Article II of the Plan; and
(ii) an amount equal to the product of three times the sum of (1) the Employee’s Annual Base Salary, and (2) $225,000; and
(iii) an amount equal to the maximum yearly contribution the Company could make to the Employee’s account in the LESCO, Inc. Salary Savings Plan and Trust, or any successor qualified defined contribution retirement plan, based on the amount contributed to such retirement plan by the Employee during the year of the Triggering Event; and
(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as provided the “Other Benefits”).
(b) Notwithstanding any other provision of the Agreement or Plan to the contrary, in Section 5(bthe event it is determined that any portion of the amounts payable or made available to the Employee under the Plan or Agreement (including, without limitation, the issuance of common shares of the Company; the granting or vesting of restricted shares; and the granting, vesting, exercise or termination of options), upon the termination of Employee’s employment by or under any other agreement with, or plan of, the Company other than for Cause prior (in the aggregate “Total Payments”) constitute “excess parachute payments” within the meaning of Code Section 280G and are subject to a Change in Controlthe excise tax imposed by Code Section 4999 (or any similar tax or assessment), then the Employee shall be entitled to receive an amount equal to the aggregate of one times: additional payment or payments (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the a “Severance PayGross-Up”), which shall equal an amount necessary to place the Employee in the same after-tax position (after considering all applicable penalty, federal, state, local income and employment taxes on such excise taxes, as well as any interest thereon) he would have been in had no such excise taxes or assessments been imposed on the Total Payments pursuant to Code Section 4999. The calculation of the amount of Gross-Up and the payment required in connection therewith shall be paid to Employee made by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date independent accountants within thirty (30) calendar days after benefit payments commence under Section 4 of the Company that occurs more than 60 days after the Termination Date (Agreement and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor II of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the paymentsPlan. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the sixAny Gross-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts Up due under Section 5(b) that the Company shall pay to the Employee shall be either paid within five (i5) calendar days following the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion determination of the payment being subject to excise tax under Section 4999 Gross-Up amount. The determinations of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm independent accountants shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the EmployeeParties.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the “Severance Payments”) upon the termination of the Employee’s employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated by the Employer without Cause prior to following a Change in Control or by the Employee with Good Reason following a Change in Control, as the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e)case may be, if (i) the Employee’s employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (ii) the Employee terminates his employment with Good Reason prior to a Change in Control and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Employee’s employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to three (3) times the sum of (i) the higher of the Employee’s Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or the Employee’s Base Salary in effect immediately prior to the Change in Control, and (ii) the higher of the annual Bonus earned by the Employee in respect of the Employer’s fiscal year immediately preceding that in which the Date of Termination occurs, or the average annual Bonus so earned in respect of the three fiscal years immediately preceding that in which the Change in Control occurs. One-third of this lump sum severance payment shall be in consideration of Employee’s obligations under Section 13.2.
(B) Notwithstanding any provision of any annual incentive plan to the contrary, the Employer shall pay to the Employee a lump sum amount, in cash, equal to the sum of (i) any annual incentive compensation which has been allocated or awarded to the Employee for a completed fiscal year preceding the Date of Termination and which, as of the Date of Termination, is contingent only upon the continued employment of the Employee to a subsequent date, and (ii) a pro rata portion to the Date of Termination of a deemed annual bonus for the Employer’s fiscal year in which the Date of Termination occurs, calculated by multiplying (i) the higher of the annual Bonus earned by the Employee with respect to the immediately preceding fiscal year or the average annual Bonus earned by the Employee with respect to the immediately preceding three fiscal years of the Employer by (ii) the fraction obtained by dividing the number of days in the fiscal year of the Employer in which termination occurs within 24 months up to and including the Date of Termination by 365.
(C) For the thirty-six (36) month period immediately following the Date of Termination, the Employer shall arrange to provide the Employee with life, disability, accident and health insurance benefits substantially similar to those which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any amendment to such benefits made subsequent to a Change in Control, which amendment adversely affects in any manner the Employee’s entitlement to or the amount of such benefits); PROVIDED, HOWEVER, that, unless the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a)consents to a different method, which such health insurance benefits shall be paid to Employee provided through a third-party insurer. Benefits otherwise receivable by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Employee pursuant to this Section 5(c10.1(C) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not shall be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Employee without limitation cost during the right to seek specific performance or an injunction.
d. If, when thirty-six (36) month period following the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, (and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be such benefits actually received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay made available to the Employee shall be either (i) reported to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt Employer by the Employee). Notwithstanding the foregoing, on an after-tax basis, of the greatest amount of the payment notwithstanding that all any benefits or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made payments provided under this Section 5(e10.1(C) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employmentfollowing: (i) the payment amount of expenses eligible for reimbursement or benefits provided under this Section 10.1(C) during any taxable year of the Employee’s base salary and Employee may not affect the expenses eligible for reimbursement or the benefits to be provided to the Employee in any other form or type of compensation earned, vested and payable through the Date of Terminationtaxable year; (ii) the right to receive all benefits to reimbursement of an eligible expense must be made on or before the last day of the Employee’s taxable year following the taxable year in which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefitsexpense was incurred; and (iii) the right to exercise and reimbursement or such benefits may not be subject to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans liquidation or programs, or any successor to any such plans or programsexchange for another benefit.
Appears in 1 contract
Severance Payments. a. Except as provided 4.1 If a Qualifying Termination shall occur, in addition to any payments and benefits to which the Executive is entitled under Section 5(b3 hereof, the Company shall pay the Executive the payments described in this Section 4.1 (the “Severance Payments”); provided, however, that, in the case of clauses (A), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control(B), (C), (D) and (F) below, the Employee Executive shall have executed and not revoked a release of claims in the form set forth in Exhibit A hereto. The Executive shall also be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date Payments (and including any installment that would have otherwise been paid on regular payroll dates during payments and benefits under Section 3) if the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the EmployeeExecutive’s employment is terminated by the Company without other than (x) for Cause or (y) by reason of death or Disability within the Employee for Good Reason, and six (ii6) the Termination Date occurs within 24 months month period immediately following preceding a Change in ControlControl and the Executive reasonably demonstrates that such termination is otherwise in connection with or in anticipation of a Change in Control that actually occurs during the term of the Agreement (a “Pre-Change in Control Termination”); provided, however, that, in the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(acase of clauses (A), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control(B), provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a(C), (D) and (b)F) below, the Company will Executive shall have executed and not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs revoked a release of claims in favor the form set forth in Exhibit A hereto; and provided further, however, that any such payments shall be offset by the amount of severance previously paid to the Executive under any employment agreement between the Executive and the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Dateand, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section extent permitted by Section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A any other severance policy, plan or program of the Code, and finally if an exemption from the six-month delay requirement Company.
(A) In lieu of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay any further salary payments for the first six months following separation from service shall be paid to the Employee Executive for periods subsequent to the Date of Termination and in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment lieu of any equity awards or other compensation or benefitsseverance benefit otherwise payable to the Executive, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee Executive a lump sum severance payment, in cash, equal to seventy five percent (75%) of the Executive’s annual base salary then in effect (or immediately prior to any reduction resulting in a termination for Good Reason, if applicable) (the “Change in Control Salary”).
(B) Notwithstanding any provision of any annual incentive plan to the contrary, the Company shall be either pay to the Executive an amount, in cash, equal to the sum of (i) the full payment any unpaid incentive compensation which has been allocated or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only awarded to the extent necessary to satisfy (ii) above. All determinations required to be made Executive for a completed fiscal year preceding the Date of Termination under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company any such plan and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the paymentwhich, as in effect on of the Date of Termination, but if not otherwise specifiedis contingent only upon the continued employment of the Executive to a subsequent date, compounded on and (ii) a semiannual basis. The determination pro rata portion to the Date of Termination of Executive’s target bonus for the year in which the Date of Termination occurs (or the target in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason), calculated by multiplying such target bonus by the Accounting Firm shall be final fraction obtained by dividing the number of full months and binding on any fractional portion of a month during such year through the Company and the EmployeeDate of Termination by twelve (12).
f. If Employee’s employment with (C) For the Company is terminated by six month period immediately following the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Date of Termination, then the Company shall pay arrange to Employee only his base salary provide the Executive (which includes the Executive’s eligible dependents for purposes of this subsection (C)) with life, disability, accident and any accrued but unused vacation or PTO earned through health insurance benefits substantially similar to those which the Termination Date.
g. In addition Executive was receiving immediately prior to the benefits otherwise provided Date of Termination (or immediately prior to any reduction resulting in Section 5a termination for Good Reason, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: if applicable); provided, however, that (i) the payment of Executive’s and his qualified dependents’ COBRA eligibility period shall include the Employee’s base salary and any other form or type of compensation earned, vested and payable through period during which the Date of TerminationCompany is providing benefits under this subsection (C); (ii) unless the right Executive consents to receive all a different method (or elects COBRA coverage at applicable COBRA rates), such health insurance benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefitsshall be provided through a third-party insurer; and (iii) the right Executive shall be responsible for the payment of premiums for such benefits in the same amount as active employees of the Company. Benefits otherwise receivable by the Executive pursuant to exercise this subsection (C) shall be reduced to the extent comparable benefits (including continued coverage for any preexisting medical condition of any person covered by the benefits provided to the Executive and his eligible dependents immediately prior to receive all rights the Date of Termination) are actually received by or made available to the Executive by a subsequent employer during the twenty-four month period following the Executive’s Date of Termination (and any such benefits actually received by or made available to the Executive shall be reported to the Company by the Executive). Notwithstanding the foregoing, in which the Employee is vested event of a Pre-Change in Control Termination, on the sixtieth (60th) day following the Change in Control the Company shall pay or reimburse the Executive for any amounts or benefits it would have been responsible to pay or provide to the Executive under this Section 4.1(C) during the period prior to the Change in Control, had the Change in Control occurred on the Date of Termination.
(D) If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans (as in effect immediately prior to the Date of Termination (or immediately prior to any reduction resulting in a termination for Good Reason, in accordance with if applicable)) had the Executive’s employment terminated at any time during the period of twenty four months after the Date of Termination, the Company shall provide such post-retirement health care or life insurance benefits to the Executive (subject to any employee contributions required under the terms of all awards under any such plans in the same amounts as active employees of the Company) commencing on the later of (i) the date that such coverage would have first become available or (ii) the date that benefits described in subsection (C) of this Section 4.1 terminate.
(E) The Company stock purchase and stock incentive plans shall pay the Executive, at a daily salary rate calculated from the Executive’s annual base salary in effect immediately prior to the Date of Termination (or programs, or any successor immediately prior to any reduction resulting in a termination for Good Reason, if applicable), a lump sum amount equal to all earned but unused paid time off days through the Date of Termination.
(F) The Company shall pay, no later than the last day of the calendar year in which they are incurred, the reasonable fees and expenses of a full service nationally recognized executive outplacement firm until the earlier of the date the Executive secures new employment or the date which is twenty-four months following the Executive’s Date of Termination; provided that in no event shall the aggregate amount of such plans or programspayments exceed $5,000.
Appears in 1 contract
Sources: Change in Control Agreement (Insignia Systems Inc/Mn)
Severance Payments. a. Except as provided in Section 5(b), upon In the event of termination of Employee’s employment by the Company other than for any reason not constituting Cause prior to or described in Section 5.2, and not in connection with a Change in Control, or, in the Employee event that the Executive terminates his employment for Good Reason, the Company shall pay to Executive his base salary as defined by Section 3.1 through such date of termination, and, in lieu of any further compensation and benefits under this Agreement, Executive shall be entitled to the following benefits during the “Severance Period” (which Severance Period is defined herein to be the twelve-month period beginning on the date of such termination of Executive’s employment), subject to the limitations contained in this Section 5.5.
(a) During the Severance Period, the Company shall pay to Executive an amount equal to the aggregate of one times: (i) the his average annual rate of base salary then being paid to (exclusive of any bonuses, incentive compensation or income associated with benefits, restricted stock, or stock options of Executive) over the Employee, plus three (ii3) year period immediately preceding the average date of termination or such lesser period as Executive has been employed by the Company; provided that only the amount permitted by Section 409A of the past three years short term bonus payCode, plus (iiiinclusive of Section 401(a)(17) of the Company’s portion of 12 months’ premiums under any healthCode, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by in equal portions over the Company over a period course of 12 the first six (6) months from of the Termination Date Severance Period in accordance with the Company’s regular payroll cyclepractices, commencing on and the first balance shall be paid in equal portions over the course of the remaining six (6) months of the Severance Period in accordance with the Company’s regular payroll date of practices; and
(b) During the Severance Period, the Company that occurs more than 60 days after the Termination Date shall continue to pay benefits provided to Executive (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(cto Executive’s dependents and beneficiaries) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments date of termination of employment; provided that if during such Severance Period another employer provides Executive any benefits which are subject substantially comparable to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses any of the Accounting Firm shall be borne solely benefits provided by the Company. The Accounting Firm, the Company’s determinations must be made obligations with substantial authority respect to such comparable benefits shall cease; and
(within c) In the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1event Executive is entitled to severance benefits, all determination as of Executive’s restricted stock and unexpired stock options, granted under this Agreement or pursuant to present value any future awards and held by Executive upon termination of employment, shall use 120 percent of immediately vest with the applicable Federal rate (determined under Section 1274(doptions becoming immediately exercisable for one month, after which time the option(s) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeeexpire.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a(d) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition Notwithstanding anything contained in this Agreement to the benefits otherwise provided in Section 5contrary, the Employee Executive shall be entitled to the following severance pay and benefits and payments upon the Employee’s termination of employment: described in this Section 5.5 only if (i) on or within thirty (30) days following Executive’s last date of employment Employee signs and does not rescind a Release Agreement in a form prepared by the payment Company, to include but not be limited to a comprehensive release of all legal claims by Executive in favor of the Employee’s base salary and any other form or type of compensation earnedCompany, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance Executive fully complies with the terms his confidentiality obligations under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and Section 4.2 herein, (iii) Executive fully complies with his non-solicitation obligations under Section 4.3 herein, (iv) Executive fully complies with his non-competition obligations under Section 4.4 herein, and (v) Executive fully complies with his disclosure and assignment obligations under Section 4.5 herein. Executive further understands and agrees that if he does not sign the right to exercise and to receive all rights in which required Release Agreement, if he rescinds the Employee is vested on the Date of Terminationrequired Release Agreement after signing, in accordance or if he does not fully comply with the terms confidentiality, non-solicitation, non-competition, and/or disclosure and assignment requirements of all awards under Sections 4.2, 4.3, 4.4, and 4.5 herein, he will not be entitled to the severance pay or benefits described in this Section 5.5 and will be obligated to return any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsseverance pay and/or benefits already received.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon If the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the EmployeeExecutive’s employment is terminated (i) by the Company without Cause or by the Employee for Good Reason, and (ii) by the Executive for Good Reason or if this Agreement is not renewed by the Company for an additional Renewal Period after the Initial Renewal Period, then in addition to payment of the Accrued Compensation, the Company shall also make a series of monthly payments to the Executive for a period of twenty-four (24) months immediately following the Termination Date occurs within 24 months immediately following a Change in Controlso long as the Executive continues to comply with Sections 9 and 10 hereof; provided, that the Employee shall receive 2.99 times payments that otherwise would have been made during the Severance Pay calculated in accordance with Section 5(a), which sixty (60) day period after the Termination Date shall be paid to Employee by the Company in a lump sum made on the later of 60th first payroll period after the sixtieth (60th) day following the Termination Date or the closing on and shall include payment of any amounts that would otherwise be due prior thereto. However, in the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), Executive’s employment is terminated with the Company will not be obligated to make (or any payments of its successors or transferees of its assets) within six (6) months prior to or on behalf after a “Change of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor Control” of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and monthly payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e6(b) shall be made by for a nationally recognized accounting firm that is period of thirty-six (36) months, instead of for the Company’s outside auditor immediately prior twenty-four (24) month period referred to in the event triggering the payments that are subject preceding sentence. Each such monthly payment shall be a cash payment and equal to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses 1/12th of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes sum of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(dx) of the Code) compounded based on the nature of the paymentExecutive’s annual Base Salary, as in effect on the Termination Date plus (y) the Executive’s average Performance Bonus for the three years immediately prior to the year during which termination occurs provided that for purposes of Terminationthis Section 6(b), but if not otherwise specifiedprior to the third anniversary of this Agreement, compounded on a semiannual basis. The determination by the Accounting Firm Executive’s average Bonus shall be final and binding on deemed to be the Company and greater of (a) $200,000 or (b) the Employee.
f. If Employee’s employment with average Performance Bonus for the Company is terminated by the Company for Cause or for any reason not covered by Section 5(ayear(s) or 5(b), then the Company shall pay (ending prior to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. ), if any, that the Executive was employed by the Company. In addition to the benefits otherwise provided in Section 5foregoing, for such period of time after the Termination Date as the Executive is eligible for, and elects to receive, continuation health care coverage for himself and his dependents under COBRA, the Employee shall be entitled to Company will provide the following benefits Executive and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.his eligible
Appears in 1 contract
Sources: Executive Employment Agreement (Radiation Therapy Services Holdings, Inc.)
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the "Severance Payments") upon the termination of the Employee’s 's employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee's employment shall be deemed to have been terminated by the Employer without Cause following a Change in Control or by the Employee with Good Reason following a Change in Control, as the case may be, if (I) the Employee's employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (II) the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately terminates his employment with Good Reason prior to a Change in Control and the Termination Date circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (iIII) the Employee’s 's employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct. Exhibit 10.2
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to three (3) times (i) the greater of the Employee's Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or the Employee's Base Salary in effect immediately prior to the Change in Control, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, greater of (x) the Annual Bonus earned by the Employee shall receive 2.99 times in respect of the Severance Pay calculated Employer's fiscal year immediately preceding that in accordance with Section 5(a)which the Date of Termination occurs, (y) the average Annual Bonus so earned in respect of the three fiscal years immediately preceding that in which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in ControlControl occurs, provided or (z) $736,000. Of the conditions specified foregoing payments, an amount equal to one year's Base Salary plus one year's Annual Bonus shall be in consideration of and allocated to Employee's obligations under Section 5(c) have been satisfied13.2.
c. Notwithstanding (B) For 18 months after the foregoing provisions Employee's Date of Section 5(a) and (b)Termination, the Company will maintain in full force and effect, for the Employee's continued benefit (and that of all family members and other dependents who were enrolled in the programs on the Employee's Date of Termination) all life, medical and dental insurance programs in which the Employee (and members of the Employee's family or other dependents) were participating or by which such individuals were covered immediately before the Employee's Date of Termination. If the terms of any of such programs do not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)allow the continued participation described in the preceding sentence, as applicable, unless the Company will: (i) Employee signs a release provide benefits that are substantially similar (including eligibility conditions, conditions on benefits, the value of claims benefits and the scope of coverage) to those provided by the life, medical and dental insurance programs in favor which the Employee, members of the Company in a form as prepared by Employee's family and dependents were participating immediately before the Company (the “Release”) Employee's Date of Termination; and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods ensure that any eligibility or other conditions on benefits under these programs, including deductibles and rescission periods provided co-payments, will be administered by law with applying the Employee's experience under any predecessor program in which the Employee (and members of the Employee's family and dependents) were participating before Termination. With respect to this Section 10.1(B), any benefits or payments relating to medical and dental insurance that are provided after completion of the Release have expired without Employee rescinding applicable continuation period permitted under the ReleaseConsolidated Omnibus Budget Reconciliation Act of 1986, as amended, and any benefits or payments relating to life insurance shall be subject to the following: (iiiA) Employee is in strict compliance with the terms amount of expenses eligible for reimbursement or the benefits or payments provided under this Agreement as Section 10.1(B) during any taxable year of the dates of Employee may not affect the payments. The cessation of these expenses eligible for reimbursement or the benefits or payments will to be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid provided to the Employee in a single lump sum any other taxable year; (B) the reimbursement of an eligible expense must be made on or before the first last day of the seventh month after Employee's taxable year following the month taxable year in which the Employee’s separation from service occurs.
e. In expense was incurred; and (C) the event right to reimbursement or to such benefits or payments is not subject to liquidation or exchange for another benefit. To the extent that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee extended under this Agreement Section 10.1(B) would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by taxable compensation for the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to solely responsible for any such plans or programstaxes.
Appears in 1 contract
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the “Severance Payments”) upon the termination of the Employee’s employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated by the Employer without Cause following a Change in Control or by the Employee with Good Reason following a Change in Control, as the case may be, if (I) the Employee’s employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (II) the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately terminates his employment with Good Reason prior to a Change in Control and the Termination Date circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (iIII) the Employee’s employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to two (2) times the sum of (i) the greater of the Employee’s Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or the Employee’s Base Salary in effect immediately prior to the Change in Control, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, greater of (x) the annual Bonus earned by the Employee shall receive 2.99 times in respect of the Severance Pay calculated Employer’s fiscal year immediately preceding that in accordance with Section 5(a)which the Date of Termination occurs, (y) the average annual Bonus so earned in respect of the two fiscal years immediately preceding that in which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in ControlControl occurs, provided or (z) $350,000. Of the conditions specified foregoing payments, one-half of all such payments shall be in consideration of and allocated to Employee’s obligations under Section 5(c) have been satisfied13.2.
c. Notwithstanding (B) For 18 months after the foregoing provisions Employee’s Date of Section 5(a) and (b)Termination, the Company will maintain in full force and effect, for the Employee’s continued benefit (and that of all family members and other dependents who were enrolled in the programs on the Employee’s Date of Termination) all life, medical and dental insurance programs in which the Employee (and members of the Employee’s family or other dependents) were participating or by which such individuals were covered immediately before the Employee’s Date of Termination. If the terms of any of such programs do not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)allow the continued participation described in the preceding sentence, as applicable, unless the Company will: (i) Employee signs a release provide benefits that are substantially similar (including eligibility conditions, conditions on benefits, the value of claims benefits and the scope of coverage) to those provided by the life, medical and dental insurance programs in favor which the Employee, members of the Company in a form as prepared by Employee’s family and dependents were participating immediately before the Company (the “Release”) Employee’s Date of Termination; and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods ensure that any eligibility or other conditions on benefits under these programs, including deductibles and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Releaseco-payments, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when administered by applying the Employee’s termination of employment occurs, experience under any predecessor program in which the Employee is a specified employee within the meaning (and members of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay family and dependents) were participating before Termination. With respect to this Section 10.1(B), any benefits or payments for relating to medical and dental insurance that are provided after completion of the first six months following separation from service applicable continuation period permitted under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, and any benefits or payments relating to life insurance shall be paid subject to the following: (A) the amount of expenses eligible for reimbursement or the benefits or payments provided under this Section 10.1(B) during any taxable year of the Employee may not affect the expenses eligible for reimbursement or the benefits or payments to be provided to the Employee in a single lump sum any other taxable year; (B) the reimbursement of an eligible expense must be made on or before the first last day of the seventh month after Employee’s taxable year following the month taxable year in which the Employee’s separation from service occurs.
e. In expense was incurred; and (C) the event right to reimbursement or to such benefits or payments is not subject to liquidation or exchange for another benefit. To the extent that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee extended under this Agreement Section 10.1(B) would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by taxable compensation for the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to solely responsible for any such plans or programstaxes.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the (a) Upon termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of Executive's employment: (i) for cause; or (ii) by the payment voluntary termination of employment of the Employee’s Executive, the Executive shall not be entitled to any severance payment other than compensation earned by the Executive before the date of termination calculated pro rata up to and including the date of termination.
(b) If the Executive's employment is terminated for any other reason other than the reasons set forth in subsection 9(a), the Executive shall be entitled to receive the lesser of:
(i) the total of:
(A) 2 months' salary at the then applicable base salary rate;
(B) the present value, as determined by the Chairman and/or the President, acting reasonably, of the benefits described in section 4(b) that would be enjoyed by the Executive during the next 3 months assuming his employment was not terminated and any assuming the then current level of benefits were continued for those 3 months; and
(C) the present value, as determined by the Chairman and/or the President, acting reasonably, of the amount that the Chairman and/or the President estimates would be the amount payable to the Executive out of the Plan assuming that the Executive's employment was not terminated until the end of the current fiscal year and all other form or type participants of compensation earned, vested and payable through the Date Plan continued in the employment of Terminationthe Corporation for the full then current fiscal year; and
(ii) the right salary otherwise payable to the Executive for the unexpired term of this agreement together with the other amounts described in clause 9(b)(i), mutatis mutandis. The payment described in this subsection 9(b) is the only severance payment the Executive will receive in the event of the termination of this agreement for reasons contemplated in this subsection 9(b).
(c) If the Executive's employment is terminated as a result of the permanent disability or death of the Executive, the Executive or his estate, as applicable, shall be entitled to receive, within 30 days of the date of such termination, the balance of the base salary that would otherwise be paid to the Executive during the remainder of the term of this agreement. The Executive agrees to reasonably comply with all benefits requirements necessary for the Corporation to which the Employee is vested obtain life insurance on the Date life of Termination in accordance with the terms under Executive for the Company pension and welfare benefit plans or any successor term of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsthis agreement.
Appears in 1 contract
Severance Payments. a. Except as provided in If the Executive’s employment shall be terminated due to death pursuant to Section 5(b4(a)(i), upon the termination of Employee’s employment due to Disability pursuant to Section 4(a)(ii), by the Company other than without Cause pursuant to Section 4(a)(iv), by the Executive’s resignation for Cause prior Good Reason pursuant to a Change in ControlSection 4(a)(v), or due to the Company’s non-extension of the Term pursuant to Section 4(a)(vii), the Employee shall be entitled Company shall, subject to an amount the Executive’s execution of a general waiver and release of claims agreement substantially in the form attached hereto as Exhibit D, and subject to Section 11, provide the Executive:
(a) a cash severance payment equal to two times the aggregate sum of one times: (i) the annual rate of base salary then being paid to Executive’s Annual Base Salary, as in effect for the Employeeyear in which such termination occurs, plus and (ii) $2,000,000; provided, however, that such severance payment shall be in lieu of notice or any other severance benefits to which the average Executive might otherwise be entitled. The cash severance payment shall be paid in equal installments, in accordance with the normal payroll practices of the past three years short term bonus payCompany, plus during the Severance Period;
(iiib) the Annual Bonus for the year in which such termination occurs (based on the Company’s portion performance in relation to the applicable performance targets, as determined in good faith by the Compensation Committee), multiplied by the Pro-Rate Factor (as applicable to the Executive’s employment with the Company) and paid at such time as the Executive’s Annual Bonus would otherwise have been paid; and
(c) continuation of 12 months’ premiums the Executive’s coverage under any health, disability the Company’s health and life insurance plan or program welfare benefit plans and programs in which the Employee Executive was entitled to participate immediately prior to the Termination Date (the aggregated amountof Termination, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e)extent permitted under the terms of such plans and programs, if until the earlier to occur of (i) the Employee’s employment is terminated by end of the Company without Cause or by the Employee for Good Reason, Severance Period and (ii) the Termination Date occurs within 24 months immediately following a Change in Controldate on which the Executive receives comparable health and welfare benefits from any subsequent employer; provided that, to the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by extent that the Company in a lump sum is unable to continue such benefits because of underwriting on the later of 60th day following the Termination Date applicable plan term, or the closing on the event constituting the Change in Control, provided the conditions specified in if such continuation would violate Section 5(c105(h) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to provide the Employee shall be either (i) the full Executive with an economically equivalent benefit or payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only basis (to the extent necessary health and welfare benefit plans and programs in which the Executive was entitled to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor participate immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with were non-taxable to the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsExecutive).
Appears in 1 contract
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the “Severance Payments”) upon the termination of the Employee’s employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated by the Employer without Cause following a Change in Control or by the Employee with Good Reason following a Change in Control, as the case may be, if (I) the Employee’s employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (II) the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately terminates his employment with Good Reason prior to a Change in Control and the Termination Date circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (iIII) the Employee’s employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to (i) the Employee’s Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based divided by twelve (12) and multiplied by the number of full months remaining in the Term, and (ii) the average annual bonus, including but not limited to the Annual Bonus described in Exhibit A, earned by the Employee under the Employers’ annual incentive plan in the Employer’s fiscal years immediately preceding the fiscal year in which the Date of Termination occurs multiplied by the number of fiscal years that a bonus, including but not limited to the Annual Bonus described in Exhibit A, has not been paid to the Employee provided, however, that in the event that the Date of Termination occurs within 24 months prior to the date on which Employee is first entitled to receive a bonus under the Employers’ annual incentive plan, the average annual bonus shall be deemed to be $490,000. In addition, Employee will be entitled to receive any unpaid Cash Bonus described in Section 5 and any unpaid compensation and/or compensation attributable to RSU Award(s) that has not been issued and or/or LTIP RS Awards as provided in Exhibit A.
(B) For the a period beginning on the Date of Termination and ending on December 31, 2010, the Employer shall arrange to provide the Employee with life, disability, accident and health insurance benefits substantially similar to those which the Employee is receiving immediately following prior to the Notice of Termination (without giving effect to any amendment to such benefits made subsequent to a Change in Control, which amendment adversely affects in any manner the Employee’s entitlement to or the amount of such benefits); PROVIDED, HOWEVER, that, unless the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a)consents to a different method, which such health insurance benefits shall be paid to Employee provided through a third-party insurer. Benefits otherwise receivable by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Employee pursuant to this Section 5(c10.1(B) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not shall be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Employee without limitation cost during the right to seek specific performance or an injunction.
d. If, when benefit period following the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, (and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be such benefits actually received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay made available to the Employee shall be either (i) reported to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt Employer by the Employee). Notwithstanding the foregoing, on an after-tax basis, of the greatest amount of the payment notwithstanding that all any benefits or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made payments provided under this Section 5(e10.1(B) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employmentfollowing: (i) the payment amount of expenses eligible for reimbursement or benefits provided under this Section 10.1(B) during any taxable year of the Employee’s base salary and Employee may not affect the expenses eligible for reimbursement or the benefits to be provided to the Employee in any other form or type of compensation earned, vested and payable through the Date of Terminationtaxable year; (ii) the right to receive all benefits to reimbursement of an eligible expense must be made on or before the last day of the Employee’s taxable year following the taxable year in which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefitsexpense was incurred; and (iiiiii ) the right to exercise and reimbursement or such benefits may not be subject to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans liquidation or programs, or any successor to any such plans or programsexchange for another benefit.
Appears in 1 contract
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, if (1) a Change in Section 5(b)Control occurs on or prior to December 31, upon 2004, and (2) the termination of Employee’s Executive's employment is terminated (other than (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason) and the Date of Termination in connection therewith occurs within three (3) years after such Change in Control then the Company shall pay the Executive the amounts, and provide the Executive the benefits, hereinafter described in this Section 6.1 ("Severance Payments"), together with any payments that may be due under Section 6.2 hereof, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive's employment shall be deemed to have been terminated following a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated Control by the Company without Cause or by the Employee Executive for Good ReasonReason if (a) in connection with Executive's termination of employment by the Company without Cause or by the Executive for Good Reason (determined by treating the event or transaction hereinafter described as the Change in Control), a Notice of Termination is furnished following an event or transaction described in Section 15(G)(1)(x) or Section 15(G)(3)(x) which occurs on or prior to December 31, 2004, and (iib) the Termination Date a Management Change occurs in connection with or within 24 twelve (12) months immediately following a Change in Controlsuch event or transaction and subsequent to, but not more than six (6) months after, the Employee shall receive 2.99 times furnishing of such Notice of Termination.
(A) In lieu of any further salary payments to the Severance Pay calculated Executive for periods subsequent to the Date of Termination and in accordance with Section 5(a), which shall be paid to Employee lieu of any severance benefit otherwise payable by the Company in or any of its subsidiaries to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to (1) if the Date of Termination occurs on or prior to the later second anniversary of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided two and twenty-five hundredths (2.25) times the conditions specified sum of (i) the Executive's base salary as in Section 5(ceffect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the Change in Control (the "Base Salary"), plus (ii) have been satisfied.
c. Notwithstanding the target annual bonus established for the Executive under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change in Control), or (2) if the Date of Termination occurs after the second anniversary of the Change in Control, one (1.0) times the sum of such Base Salary plus such target annual bonus. If, notwithstanding the foregoing provisions provision that the lump sum severance is to be in lieu of Section 5(a) and (b)any severance benefit otherwise payable, the Company will not or any of its subsidiaries is required by applicable law to pay such a benefit, the Company's obligation to pay such lump sum severance hereunder shall be obligated offset and reduced by the amount of the benefit required to make any payments be paid by applicable law.
(B) For the 27-month period immediately following the Date of Termination, the Company shall arrange to or on behalf provide the Executive and his dependents with life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Employee under Section 5(a) Termination (or, if more favorable to the Executive, those provided to the Executive and (bhis dependents immediately prior to the Change in Control), as applicableat no greater cost to the Executive on an after-tax basis than the cost to the Executive immediately prior to such date or occurrence; PROVIDED, unless HOWEVER, that the foregoing benefits shall be provided for a period of only twelve (i12) Employee signs a release months if the Date of claims in favor Termination occurs after the second anniversary of the Company Change in a form as prepared Control. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive at no greater cost by a subsequent employer during the applicable period set forth above (and any such benefits received by or made available to the Executive shall be reported to the Company (by the “Release”Executive). If the Severance Payments shall be decreased pursuant to Section 6.2(B) hereof, and delivered the Section 6.1(B) benefits which remain payable after the application of Section 6.2 hereof are thereafter reduced pursuant to Employee the immediately preceding sentence, the Company shall, no later than five (5) business days after following such reduction, pay to the Termination DateExecutive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (b) the amount of the subsequent reduction in these Section 6.1(B) benefits, or (c) the maximum amount which can be paid to the Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the Code.
(C) Notwithstanding any provision of any incentive, stock, retirement, savings or other plan to the contrary, as of the Date of Termination, (i) the Executive shall be fully vested in (1) all then outstanding options to acquire stock of the Company (or if such options have been assumed by, or replaced with options for shares of, a parent, surviving or acquiring company, such assumed or replacement options), and all then outstanding restricted shares of stock of the Company (or the stock of any parent, surviving or acquiring company into which such restricted shares have been converted or for which they have been exchanged) held by the Executive, (2) all accrued basic match and incremental match employer contributions under the Company's Capital Appreciation Plan (but not deemed participation match contributions thereunder), and (3) to the extent permissible under the Code and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), all amounts credited to his account under the Company's 401(k) Savings and Investment Plan which are attributable to employer contributions; and (ii) all applicable consideration periods and rescission periods provided by law with respect stock options referred to in clause (i) above shall remain exercisable until the Release have expired without Employee rescinding earlier of (x) the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as third anniversary of the dates Date of Termination or (y) the otherwise applicable expiration date of such option. To the extent that the full vesting of the payments. The cessation Executive under clause (i)(3) of these payments will be in addition to, and not as an alternative to, any other remedies at law the preceding sentence would violate either ERISA or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount which cannot become fully vested.
(D) The Company shall pay to the Executive a lump sum amount, in cash, equal to the Executive's target annual bonus under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change of Control) multiplied by a fraction, the numerator of which is the number of days in such fiscal year through and including the Date of Termination, and the denominator of which is 365. For purposes of this clause (D), the Executive's target annual bonus in respect of 2001 shall be deemed to be 150% of his actual target annual bonus in respect of 2001 (less, if previously paid to the Executive, 60% of his actual target annual bonus in respect of 2001).
(A) Except as otherwise provided in Section 6.2(B), if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, Payments together with all other payments and the value of any payment or benefit received or to be received by the Employee under this Agreement would result Executive in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance connection with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes or the “deferral of compensation” under Section 409A termination of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only Executive's employment (whether pursuant to the extent necessary to satisfy terms of this Agreement or otherwise) (iiall such payments and benefits, excluding the Gross- Up Payment, being hereinafter called "Total Payments") above. All determinations required to will be made under this Section 5(esubject (in whole or part) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Tax, then the Company shall pay to Employee only his base salary the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any accrued but unused vacation or PTO earned through federal, state and local income and employment taxes and Excise Tax upon the Termination Date.
g. In addition Gross-Up Payment, shall be equal to the benefits otherwise provided in Section 5Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Employee Executive shall be entitled deemed to pay federal income taxes at the following benefits and payments upon highest marginal rate of federal income taxation in the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights calendar year in which the Employee Gross-Up Payment is vested to be made and state and local income taxes at the highest marginal rate of taxation in the state and localities of the Executive's residence and employment, as applicable, on the Date of Termination, net of the maximum reduction in federal income tax which could be obtained from deduction of such state and local taxes.
(B) If the Total Payments would (but for this Section 6.2(B)) be subject (in whole or part) to the Excise Tax, but the aggregate value of the portion of the Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is less than 330% of the Executive's Base Amount, then subsection (A) of this Section 6.2 shall not apply, and the cash Severance Payments shall be reduced (if necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to zero), to the extent necessary to cause the Total Payments not to be subject to the Excise Tax.
(C) 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) all of the Total Payments shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, unless in the opinion of the accounting firm which was, immediately prior to the Change in Control, the Company's independent auditor (the "Auditor"), such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the terms principles of all awards sections 280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section 6.3 hereof, the Company shall provide the Executive with its calculation of the amounts referred to in this Section 6.2(C) and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations. If the Executive disputes the Company's calculations (in whole or in part), the reasonable opinion of the Auditor with respect to the matter in dispute shall prevail.
(I) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, the Gross-Up Payment and the amount of the reduction in the Severance Payments, plus interest on the amount of such repayments at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(II) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are not to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, 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 and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(III) Except as otherwise provided in clause (IV) below, in the event there is a Final Determination that the Excise Tax exceeds the amount taken into account hereunder in determining the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall pay to the Executive, within five (5) business days following the date of the Final Determination, the sum of (1) a Gross-Up Payment in respect of such excess and in respect of any portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up Payment, including a Gross-Up Payment in respect of any Excise Tax attributable to amounts payable under clauses (2) and (3) of this paragraph (III) (plus any interest, penalties or additions payable by the Executive with respect to such excess and such portion), (2) if Severance Payments were reduced pursuant to Section 6.2(B) but after giving effect to such Final Determination, the Severance Payments should not have been reduced pursuant to Section 6.2(B), the amount by which the Severance Payments were reduced pursuant to Section 6.2(B), and (3) interest on such amounts at 120% of the rate provided in section 1274(b)(2) of the Code.
(IV) In the event that (1) Severance Payments were reduced pursuant to Section 6.2(B) and (2) the aggregate value of Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is subsequently redetermined in a Final Determination, but such redetermined value still does not exceed 330% of the Executive's Base Amount, then, within five (5) business days following such Final Determination, (x) the Company stock purchase and stock incentive plans or programsshall pay to the Executive the amount (if any) by which the reduced Severance Payments (after taking the Final Determination into account) exceeds the amount of the reduced Severance Payments actually paid to the Executive, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b) of the Code, or any successor (y) the Executive shall pay to any the Company the amount (if any) by which the reduced Severance Payments actually paid to the Executive exceeds the amount of the reduced Severance Payments (after taking the Final Determination into account), plus interest on the amount of such plans repayment at 120% of the rate provided in section 1274(b) of the Code.
6.3 The payments provided in subsection (A) and (D) (and to the extent applicable, subsection (C)) of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifteenth (15th) day following the Date of Termination, PROVIDED, HOWEVER, that if the amounts of such payments, and the potential limitation on such payments set forth in Section 6.2 hereof, cannot be finally determined on or programs.before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company or, in the case of payments under Section 6.2 hereof, in accordance with said Section 6.2, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the sixtieth (60th) day after the Date of Termination. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations
Appears in 1 contract
Sources: Severance Agreement (Chiquita Brands International Inc)
Severance Payments. a. Except as provided Subject to the provisions of paragraphs 8 and 9 below, in Section 5(b)the event of a Termination described in paragraph 6 above, upon in lieu of the termination of Employee’s employment by the Company other than for Cause prior to a Change in Controlamount otherwise payable under paragraph 5, the Employee Executive shall continue to receive medical insurance, disability income protection, life insurance coverage and death benefits and perquisites in accordance with subparagraph 5(d) above for a period of 36 months after the date of Termination, and shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change payment in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee cash no later than five ten business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect equal to the Release have expired without Employee rescinding sum of:
(a) an amount equal to three times the Release, and (iiiExecutive's annual salary rate in effect under subparagraph 5(a) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available above immediately prior to the Company, including without limitation date of Termination;
(b) an amount equal to three times the right to seek specific performance or an injunction.
d. If, when the Employee’s termination greatest of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment Executive's short term incentive award and other bonuses payable for the calendar year preceding the date of Termination, or (ii) such lesser the estimated amount determined by of the Company short term incentive award and other bonuses which would otherwise be payable to the Executive in accordance with this Section 5(esubparagraph 5(b) that would result in no portion of above for the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date year of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right targeted bonus amounts under the short term incentive award and other bonuses which would otherwise be payable to exercise and to receive all rights in which the Employee is vested on the Date of Termination, Executive in accordance with subparagraph 5(b) above for the terms year of all Termination;
(c) an amount equal to three times the amount of the Company's contribution to the Case Corporation Savings Plan allocated to the Executive's account under that plan for the calendar year preceding the year of Termination.
(d) The actuarial equivalent (using the Pension Benefit Guaranty Corporation interest rate for valuing immediate annuities and assumptions then applicable) of the additional pension benefits which the Executive would have received under Section 7 of the Employment Agreement between the Executive and the Company dated May 4, 1995, including any amounts the Executive would have received had the Executive continued in service with the Company for the 36-month period following his date of Termination and received over such period annual salary and short-term incentive awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsother bonuses at the levels described in subparagraphs (a) and (b) of this paragraph 7.]
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied..
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 two times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs..
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except as provided (a) The Company will make the severance payments specified in Section 5(b) or (c) below if this Agreement is terminated pursuant to Section 4(d) or (e), upon . The Company will make the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions severance payments specified in Section 5(c5(f) have been satisfiedif this Agreement is terminated pursuant to Section 4(i). The Company will not be obligated for severance payments in any other event.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b) As severance payments under this Section 5(b), the Company will not be obligated to make any payments to or on behalf of pay Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after following the effective date of termination of this Areement, and on the first day of each of the next succeeding twenty-three (23) months, an amount equal to 1/12th of the sum of the highest total of salary payments made by the Company to Employee in any calendar year and bonus earned by Employee (whether or not deferred) with respect to services rendered to the Company during such calendar year. Each monthly payment will be reduced by an amount equal to any retirement or supplemental retirement payment that is paid by the Company or from a Company-sponsored plan during the month in which and by an amount equal to any disability payments Employee or his spouse receive during the month from the Company or from a Company-sponsored plan; provided, however, that this reduction shall not apply to any retirement, supplemental retirement or disability payments derived from Employee’s separation from service occurs.
e. In 's contributions, or interest thereon, to any Company-sponsored plan. If Employee dies without a spouse or minor children surviving, or if Employee's surviving spouse and minor children die or all of Employee's surviving minor children reach age 18 before all severance payments have been made, the event that the vesting, acceleration and payment of Company's obligations to make any equity awards or other compensation or benefits, together with all other further severance payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that will cease.
(c) If this Agreement is terminated pursuant to Section 4(d) or (e) after a change in control of the Company shall pay has occurred, or if a change in control of the Company occurs while the Company is making severance payments to the Employee pursuant to Section 5(b), Employee may elect to receive the severance payments specified in Section 5(b) (or the remaining balance thereof) in a lump sum. The reductions that would otherwise be applicable to severance payments under the second sentence in paragraph 5(b) shall not apply. This lump sum shall be either paid within 30 days after the effective date of termination or, if a change in control occurs after termination, within 30 days after such change in control. For the purposes of this Agreement, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by contract, or otherwise, except that "control" shall not include power which derives solely from status as a corporate officer or employee. Without limiting the generality of the foregoing, a change in control shall be deemed to have occurred (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to if any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority person (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d2(2) of the CodeSecurities Act of 1933 or Sections 13(d) compounded based on the nature and 14(d)(2) of the paymentSecurities Exchange Act of 1934) becomes the beneficial owner, as in effect on the Date directly or indirectly, of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on securities of the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(arepresenting twenty-five percent (25%) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment more of the Employee’s base salary and any other form or type combined voting power of compensation earnedthe then outstanding securities of the Company, vested and payable through the Date of Termination; (ii) if at any time less than a majority of the right to receive all benefits to which the Employee is vested on the Date Board of Termination in accordance with the terms under Directors of the Company pension and welfare benefit plans are persons who were directors of the Company twenty-four (24) months before such time or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) more than fifty percent (50%) of the right to exercise and to receive all rights assets of the Company are sold other than in which the Employee is vested on the Date usual course of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsbusiness.
Appears in 1 contract
Severance Payments. a. Except as provided (a) The Company will make the severance payments specified in Section 5(b), upon ) or (c) below if this Employment Agreement is terminated pursuant to Sections 4(d) or (e) hereof.
(b) If the termination of Employee’s employment by the Company other than for Cause Employment Agreement is terminated pursuant to Section 4(d) prior to a "Change in In Control, the Employee shall be entitled to an amount equal to the aggregate of one times: " (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”as defined below), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in as severance payments under this Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b5(b), the Company will not be obligated pay Employee the severance benefits then in effect under the Company's severance policy for all employees.
(c) If this Employment Agreement is terminated pursuant to make any payments to Section 4(d) or on behalf of Employee under Section 5(a(e) and within twenty-four (b), as applicable, unless (i24) Employee signs months after a release of claims Change in favor Control of the Company in a form as prepared by has occurred, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, shall pay the Employee is a specified employee within lump sum equal to three (3) times the meaning of section 409A of the Code, salary and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be bonus paid to the Employee in a single the prior calendar year. This lump sum on the first day of the seventh month shall be paid within 30 days after the month in which the Employee’s separation from service occurs.
e. effective date of termination. In the event that the vestingaddition, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by health insurance benefits for the Employee under this Agreement would result in all or a portion will be continued for thirty-six (36) months after the effective date of such payment being subject termination upon substantially the same terms as provided to excise tax under Section 4999 of Employee immediately before the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code)Control. For the purposes of all calculations under Section 280G this Employment Agreement, a "Change in Control" shall be deemed to have occurred if any of the Code following have occurred:
(i) either (A) the Corporation shall receive a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission pursuant to Section 13(d) of the application Securities Exchange Act of this 1934 (the "1934 Act") disclosing that any person (as such term is used in Section 5.113(d) of the ▇▇▇▇ ▇▇▇) ("Person"), all determination as is the beneficial owner, directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation or (B) the Company has actual knowledge of facts which would require any Person to present value shall use 120 percent file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable Federal rate (determined under period of time specified in Section 1274(d13(d) of the Code▇▇▇▇ ▇▇▇) compounded based on disclosing that such Person is the nature beneficial owner, directly or indirectly, of twenty (20) percent or more of the paymentoutstanding stock of the Corporation;
(ii) purchase by any Person, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on other than the Company and the Employee.
f. If Employee’s employment with or a wholly-owned subsidiary of the Company is terminated or an employee benefit plan sponsored or maintained by the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Corporation (or <page> securities, including units of limited partnership interests, convertible into stock) for Cause cash, securities or for any reason not covered by Section 5(a) or 5(bother consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation (calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(iii) approval by the shareholders of the Corporation of (A) any consolidation or merger of, or other business combination involving, the Corporation in which the Corporation is not to be the continuing or surviving entity or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, other than a consolidation or merger or business combination of the Corporation in which holders of its stock immediately prior to the consolidation or merger or business combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the consolidation or merger or business combination as immediately before, or (B) any consolidation or merger or business combination in which the Corporation is the continuing or surviving corporation but in which the common shareholders of the Corporation immediately prior to the consolidation or merger or business combination do not hold at least a majority of the outstanding common stock of the continuing or surviving corporation (except where such holders of common stock hold at least a majority of the common stock of the corporation which owns all of the common stock of the Corporation), or (C) any sale, lease, exchange or other transfer by operation of law or otherwise (in one transaction or a series of related transactions) of all or substantially all the assets of the Corporation or the Partnership; or
(iv) a change in the majority of the members of the Board within a 24-month period unless the election or nomination for election by the Corporation shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through beginning of the Termination Date24-month period.
g. In addition to (v) more than fifty percent (50%) of the benefits assets of the Corporation or the Partnership are sold, transferred or otherwise provided disposed of, whether by operation of law or otherwise, other than in Section 5, the usual and ordinary course of its business. <page>
(d) Employee shall be entitled under no obligation to mitigate damages with respect to termination and in the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and event Employee is employed or receives income from any other form or type of compensation earned, vested and payable through source there shall be no offset therefor against the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under amounts due from the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programshereunder.
Appears in 1 contract
Sources: Employment Agreement (Sovran Acquisition LTD Partnership)
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, if (1) a Change in Section 5(b)Control occurs on or prior to December 31, upon 2004, and (2) the termination of Employee’s Executive's employment is terminated (other than (A) by the Company other than for Cause Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason) and the Date of Termination in connection therewith occurs within three (3) years after such Change in Control then the Company shall pay the Executive the amounts, and provide the Executive the benefits, hereinafter described in this Section 6.1 ("Severance Payments"), together with any payments that may be due under Section 6.2 hereof, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable by the Company or any of its subsidiaries to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to (1) if the Date of Termination occurs on or prior to a the second anniversary of the Change in Control, two (2.0) times the Employee shall be entitled to an amount equal to the aggregate sum of one times: (i) the annual rate of Executive's base salary then being paid as in effect immediately prior to the EmployeeDate of Termination or, if higher, in effect immediately prior to the Change in Control (the "Base Salary"), plus (ii) the average of target annual bonus established for the past three years short term Executive under the bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee maintained by the Company in a lump sum on respect of the later fiscal year in which occurs the Date of 60th day following Termination (or, if higher, in respect of the fiscal year in which occurs the Change in Control), or (2) if the Date of Termination Date or occurs after the closing on the event constituting second anniversary of the Change in Control, provided one (1.0) times the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding sum of such Base Salary plus such target annual bonus. For all purposes of this Agreement, the Executive's target annual bonus shall be deemed to be 50% of the Executive's base salary. If, notwithstanding the foregoing provisions provision that the lump sum severance is to be in lieu of Section 5(a) and (b)any severance benefit otherwise payable, the Company will not or any of its subsidiaries is required by applicable law to pay such a benefit, the Company's obligation to pay such lump sum severance hereunder shall be obligated offset and reduced by the amount of the benefit required to make any payments be paid by applicable law.
(B) For the 24-month period immediately following the Date of Termination, the Company shall arrange to or on behalf provide the Executive and his dependents with life, disability, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Employee under Section 5(a) Termination (or, if more favorable to the Executive, those provided to the Executive and (bhis dependents immediately prior to the Change in Control), as applicableat no greater cost to the Executive on an after-tax basis than the cost to the Executive immediately prior to such date or occurrence; provided, unless however, that the foregoing benefits shall be provided for a period of only twelve (i12) Employee signs a release months if the Date of claims in favor Termination occurs after the second anniversary of the Company Change in a form as prepared Control. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive at no greater cost by a subsequent employer during the applicable period set forth above (and any such benefits received by or made available to the Executive shall be reported to the Company (by the “Release”Executive). If the Severance Payments shall be decreased pursuant to Section 6.2(B) hereof, and delivered the Section 6.1(B) benefits which remain payable after the application of Section 6.2 hereof are thereafter reduced pursuant to Employee the immediately preceding sentence, the Company shall, no later than five (5) business days after following such reduction, pay to the Termination DateExecutive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (b) the amount of the subsequent reduction in these Section 6.1(B) benefits, or (c) the maximum amount which can be paid to the Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the Code.
(C) Notwithstanding any provision of any incentive, stock, retirement, savings or other plan to the contrary, as of the Date of Termination, (i) the Executive shall be fully vested in (1) all then outstanding options to acquire stock of the Company (or if such options have been assumed by, or replaced with options for shares of, a parent, surviving or acquiring company, such assumed or replacement options), and all then outstanding restricted shares of stock of the Company (or the stock of any parent, surviving or acquiring company into which such restricted shares have been converted or for which they have been exchanged) held by the Executive, (2) all accrued basic match and incremental match employer contributions under the Company's Capital Appreciation Plan, and (3) to the extent permissible under the Code and the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), all amounts credited to his account under the Company's 401(k) Savings and Investment Plan which are attributable to employer contributions; and (ii) all applicable consideration periods and rescission periods provided by law with respect stock options referred to in clause (i) above shall remain exercisable until the Release have expired without Employee rescinding earlier of (x) the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as third anniversary of the dates Date of Termination or (y) the otherwise applicable expiration date of such option. To the extent that the full vesting of the payments. The cessation Executive under clause (i)(3) of these payments will be in addition to, and not as an alternative to, any other remedies at law the preceding sentence would violate either ERISA or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount which cannot become fully vested.
(D) The Company shall pay to the Executive a lump sum amount, in cash, equal to the Executive's target annual bonus under the bonus plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination (or, if higher, in respect of the fiscal year in which occurs the Change of Control) multiplied by a fraction, the numerator of which is the number of days in such fiscal year through and including the Date of Termination, and the denominator of which is 365.
(A) Except as otherwise provided in Section 6.2(B), if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, Payments together with all other payments and the value of any payment or benefit received or to be received by the Employee under this Agreement would result Executive in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance connection with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes or the “deferral of compensation” under Section 409A termination of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only Executive's employment (whether pursuant to the extent necessary to satisfy terms of this Agreement or otherwise) (iiall such payments and benefits, excluding the Gross-Up Payment, being hereinafter called "Total Payments") above. All determinations required to will be made under this Section 5(esubject (in whole or part) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Tax, then the Company shall pay to Employee only his base salary the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any accrued but unused vacation or PTO earned through federal, state and local income and employment taxes and Excise Tax upon the Termination Date.
g. In addition Gross-Up Payment, shall be equal to the benefits otherwise provided in Section 5Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Employee Executive shall be entitled deemed to pay federal income taxes at the following benefits and payments upon highest marginal rate of federal income taxation in the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights calendar year in which the Employee Gross-Up Payment is vested to be made and state and local income taxes at the highest marginal rate of taxation in the state and localities of the Executive's residence and employment, as applicable, on the Date of Termination, net of the maximum reduction in federal income tax which could be obtained from deduction of such state and local taxes.
(B) If the Total Payments would (but for this Section 6.2(B)) be subject (in whole or part) to the Excise Tax, but the aggregate value of the portion of the Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is less than 330% of the Executive's Base Amount, then subsection (A) of this Section 6.2 shall not apply, and the cash Severance Payments shall be reduced (if necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to zero), to the extent necessary to cause the Total Payments not to be subject to the Excise Tax.
(C) 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) all of the Total Payments shall be treated as "parachute payments" within the meaning of section 280G(b)(2) of the Code, unless in the opinion of the accounting firm which was, immediately prior to the Change in Control, the Company's independent auditor (the "Auditor"), such other payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Auditor, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the terms principles of all awards sections 280G(d)(3) and (4) of the Code. Prior to the payment date set forth in Section 6.3 hereof, the Company shall provide the Executive with its calculation of the amounts referred to in this Section 6.2(C) and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations. If the Executive disputes the Company's calculations (in whole or in part), the reasonable opinion of the Auditor with respect to the matter in dispute shall prevail.
(I) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, the Gross-Up Payment and the amount of the reduction in the Severance Payments, plus interest on the amount of such repayments at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(II) In the event that (1) amounts are paid to the Executive pursuant to Section 6.2(A), (2) there is a Final Determination that the Excise Tax is less than the amount taken into account hereunder in calculating the Gross-Up Payment, and (3) after giving effect to such Final Determination, the Severance Payments are not to be reduced pursuant to Section 6.2(B), the Executive shall repay to the Company, within five (5) business days following the date of the Final Determination, 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 and employment taxes imposed on the Gross-Up Payment being repaid by the Executive), to the extent that such repayment results in a reduction in the Excise Tax and a dollar-for-dollar reduction in the Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code.
(III) Except as otherwise provided in clause (IV) below, in the event there is a Final Determination that the Excise Tax exceeds the amount taken into account hereunder in determining the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall pay to the Executive, within five (5) business days following the date of the Final Determination, the sum of (1) a Gross-Up Payment in respect of such excess and in respect of any portion of the Excise Tax with respect to which the Company had not previously made a Gross-Up Payment, including a Gross-Up Payment in respect of any Excise Tax attributable to amounts payable under clauses (2) and (3) of this paragraph (III) (plus any interest, penalties or additions payable by the Executive with respect to such excess and such portion), (2) if Severance Payments were reduced pursuant to Section 6.2(B) but after giving effect to such Final Determination, the Severance Payments should not have been reduced pursuant to Section 6.2(B), the amount by which the Severance Payments were reduced pursuant to Section 6.2(B), and (3) interest on such amounts at 120% of the rate provided in section 1274(b)(2) of the Code.
(IV) In the event that (1) Severance Payments were reduced pursuant to Section 6.2(B) and (2) the aggregate value of Total Payments which are considered "parachute payments" within the meaning of section 280G(b)(2) of the Code is subsequently redetermined in a Final Determination, but such redetermined value still does not exceed 330% of the Executive's Base Amount, then, within five (5) business days following such Final Determination, (x) the Company stock purchase and stock incentive plans or programsshall pay to the Executive the amount (if any) by which the reduced Severance Payments (after taking the Final Determination into account) exceeds the amount of the reduced Severance Payments actually paid to the Executive, plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b) of the Code, or (y) the Executive shall pay to the Company the amount (if any) by which the reduced Severance Payments actually paid to the Executive exceeds the amount of the reduced Severance Payments (after taking the Final Determination into account), plus interest on the amount of such repayment at 120% of the rate provided in section 1274(b) of the Code.
6.3 The payments provided in subsection (A) and (D) (and to the extent applicable, subsection (C)) of Section 6.1 hereof and in Section 6.2 hereof shall be made not later than the fifteenth (15th) day following the Date of Termination, provided, however, that if the amounts of such payments, and the potential limitation on such payments set forth in Section 6.2 hereof, cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company or, in the case of payments under Section 6.2 hereof, in accordance with said Section 6.2, of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together with interest on the unpaid remainder (or on all such payments to the extent the Company fails to make such payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the sixtieth (60/th/) day after the Date of Termination. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any successor opinions or other advice the Company has received from the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).
6.4 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Executive's employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of the Executive's written requests for payment accompanied with such plans or programsevidence of fees and expenses incurred as the Company reasonably may require.
Appears in 1 contract
Sources: Severance Agreement (Chiquita Brands International Inc)
Severance Payments. a. Except as provided in Section 5(b), upon the (a) Upon any termination of Employeethe Executive’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee Executive for Good Reason, the Company shall pay as severance to the Executive an amount (the “Cash Severance Amount”) equal to the sum of eighteen (18) months of the Executive’s Base Salary in effect immediately prior to the Date of Termination. The Company shall pay the Cash Severance Amount over the twelve (12)-month period immediately following the Date of Termination (the “Severance Period”), in equal installments as nearly as practicable, on the normal payroll dates for employees of the Company generally but in no event less frequently than monthly. Any amounts payable pursuant to this Section 6(a) shall not be paid until the first scheduled payment date following the date the release contemplated in Section 6(d) is executed and no longer subject to revocation, with the first such payment being in an amount equal to the total amount to which the Executive would otherwise have been entitled during the period following the Date of Termination if such deferral had not been required; provided, however, that any such amounts that constitute nonqualified deferred compensation within the meaning of Code Section 409A shall not be paid until the sixtieth (60th) day following such termination to the extent necessary to avoid adverse tax consequences under Code Section 409A, and, if such payments are required to be so deferred, the first payment shall be in an amount equal to the total amount to which the Executive would otherwise have been entitled during the period following the Date of Termination if such deferral had not been required; provided, further, that, if the Executive is a “specified employee” within the meaning of Code Section 409A, any amounts payable to the Executive under this Section 6(a) during the first six (6) months and one (1) day following the Date of Termination that constitute nonqualified deferred compensation within the meaning of Code Section 409A shall not be paid until the date that is six (6) months and one (1) day following such termination to the extent necessary to avoid adverse tax consequences under Code Section 409A, and, if such payments are required to be so deferred, the first payment shall be in an amount equal to the total amount to which the Executive would otherwise have been entitled to during the period following the Date of Termination if such deferral had not been required.
(b) In the event of any termination of the Executive’s employment (i) by the Company for Cause, or (ii) due to the Termination Date occurs within 24 months immediately following a Change in ControlExecutive’s death or Disability, the Employee Executive shall not be entitled to any severance or other payments or benefits as of the Date of Termination (except as required by applicable law) and all rights to receive 2.99 times a salary, benefits or other compensation shall termination as of the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later Date of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified except as set forth in Section 5(c) have been satisfied7.
c. Notwithstanding (c) If the foregoing provisions Executive breaches any provision of Section 5(a) and (b)Sections 8 through 11 hereof, the Company will not shall no longer be obligated to make any payments or reimbursements or provide any benefits pursuant to or on behalf of Employee this Section 6.
(d) The Company’s obligations under this Section 5(a) and (b), as applicable, unless 6 shall be contingent upon (i) Employee signs the delivery by the Executive of a complete release of claims in favor of the Company Company, its subsidiaries, affiliates, and respective officers, directors, employees, principals, managers, partners, members, attorneys and representatives, in a substantially the form attached hereto as prepared by Annex A, within twenty-one (21) days after the Date of Termination and (ii) the Executive not revoking such release.
(e) In the event that the Company fails to pay any of the amounts set forth in Section 6(a) within five (the “Release”5) and delivered to Employee no later than five business days after the Termination Datedate when due, the overdue amounts shall accrue interest at a rate equal to five (ii5%) all applicable consideration periods per year until such overdue amounts and rescission periods provided by law with respect interest are paid. If the Executive dies during the postponement period prior to the Release have expired without Employee rescinding the Release, and (iii) Employee is payment in strict compliance with the terms full of this Agreement as of the dates of the payments. The cessation of these payments will be amounts set forth in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occursSection 6(a), the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service unpaid amounts shall be paid to the Employee in a single lump sum on the first day personal representative of the seventh month after the month in which the EmployeeExecutive’s separation from service occursestate when due.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other (f) The payments and the value of any benefit received or to be received by the Employee under this Agreement would result provided in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e6(a) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the payments and benefits otherwise provided set forth in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs7 hereof.
Appears in 1 contract
Severance Payments. a. Except as provided Upon the occurrence of a Severance Event, and in Section 5(b), consideration of and contingent upon the termination execution and delivery by Executive of Employee’s employment by the Company other than for Cause prior to a Change mutually agreeable general release of all claims and expiration of any applicable revocation period in Controlconnection therewith, the Employee Executive shall be entitled to an amount equal a severance payment (“Severance Payment”) as follows, subject to the aggregate of one timesParagraph 4.2(c) below: (i) the annual rate fifty percent (50%) of base salary Executive’s then being paid to the Employee, plus current Base Salary; but (ii) if the average Severance Event occurs within twelve (12) months following a Change In Control, then the Severance Payment shall be equal to two hundred percent (200%) of Executive’s then current Base Salary. On the past three years short term bonus pay, plus (iii) the Company’s portion one-year anniversary date of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amountthis agreement, the “Severance Pay”fifty percent (50%) amount referenced in subparagraph (i) in the immediately preceding sentence shall be increased to one hundred percent (100%), which .
▇. ▇▇▇▇▇▇▇▇▇ Payment shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(cwithin thirty (30) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination DateSeverance Event, (ii) all applicable consideration periods and rescission periods provided by law with respect to that if, at the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as time of the dates of the payments. The cessation of these payments will be in addition toSeverance Event, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee Executive is considered a “specified employee employee” within the meaning of section Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service Payment shall be paid to the Employee in a single lump sum on delayed until the first day of the seventh month after following the month in which the Employee’s separation from service Severance Event occurs.
e. In c. If applicable, the Severance Payment will be offset by any income protection benefits payable to Executive during the first twelve months of a qualifying disability under the Company’s group short-term and long-term disability insurance plans.
d. Notwithstanding the foregoing to the contrary, in no event that shall the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and Severance Payment constitute a “Parachute Payment” within the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 meaning of the Code, then the amounts due under Section 5(b280G(b)(2) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event that any portion of the amounts due under Section are reducedSeverance Payment would be deemed a Parachute Payment, the amounts amount of the Severance Payment shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required eliminate any such treatment or characterization.
e. It is the intent of the parties that payments under this Agreement comply with Section 409A of the Code, and, accordingly, to interpret, to the maximum extent permitted, this Agreement to be made in compliance therewith. If the Executive notifies the Company in writing (with specificity as to the reason therefore) that the Executive believes that any provision of this Agreement (or of any payment of compensation under this Agreement) would cause the Executive to incur any additional tax or interest under Section 5(e409A of the Code, and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the parties shall, in good faith, reform such provision to attempt to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified by the parties to attempt to comply with Section 409A of the Code, such modification shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior in good faith and shall, to the event triggering maximum extent reasonably possible, maintain the payments that are subject to original intent of the Excise Tax (applicable provision without violating the “Accounting Firm”). The provisions of Section 409A. Notwithstanding the foregoing, the Company shall cause the Accounting Firm not be required to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made assume any economic burden in connection with substantial authority (within the meaning of compliance or noncompliance with Section 6662 409A of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon In the termination event of the Employee’s employment by Qualifying Termination, the Company other than for Cause prior to a Change in Control, shall pay the Employee shall be entitled to an amount equal to the aggregate sum of one times: (iA) six (6) months of his or her monthly base salary (at the higher of (x) the annual rate of base salary then being paid in effect on the date hereof or (y) the rate in effect immediately prior to the EmployeeQualifying Termination), plus (iiB) the average fifty percent (50%) of the past three years short term Employee’s annual target bonus payfor 2015, plus (iiiC) the premiums required to continue the Employee’s group health care coverage for a period of six (6) months following the Employee’s Qualifying Termination under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”) for the Employee and the Employee’s eligible dependents at the same level and for the same eligible dependents covered as of the Employee’s Qualifying Termination, which will be “grossed up” to cover taxes. If the Employee chooses and is eligible to continue the Employee’s health coverage through COBRA, the Employee is solely responsible for timely election of COBRA continuing coverage and for making all COBRA premium payments (subsections (A), (B) and (C), collectively, the “Severance”). The Employee will receive the Severance in a cash lump-sum which will be made on the thirtieth (30th) day following the Qualifying Termination, provided that the following have already occurred:
(1) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Terminationexecuted General Release (as described in Section 2(b)); and
(ii2) the right expiration of any rescission period applicable to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsEmployee’s executed General Release.
Appears in 1 contract
Sources: Severance and Change in Effective Control Agreement (Acucela Inc.)
Severance Payments. a. Except as provided in Section 5(b), upon 2.1 If the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s Executive's employment is terminated during the Term (a) by the Company without Cause (as defined below) or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to ) by reason of death or on behalf of Employee under Section 5(a) and Disability (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(bdefined below), then the Company shall pay to Employee only his base salary the Executive the amounts, and any accrued but unused vacation or PTO earned through provide the Termination DateExecutive the benefits, described in Section 2.2 (the "Severance Payments").
g. In addition (a) The Company shall pay to the benefits otherwise provided Executive as severance, an amount in Section 5, the Employee shall be entitled cash equal to the following benefits and payments upon the Employee’s termination sum of employment: (i) the payment of the Employee’s Executive's base salary as in effect for the fiscal year ending immediately prior to the fiscal year in which such termination occurs, and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right annual bonus (if any) earned by the Executive pursuant to receive all any annual bonus or incentive plan maintained by the Company in respect of the fiscal year ending immediately prior to the fiscal year in which the termination occurs, such cash amount to be paid to the Executive ratably monthly in arrears over the Non-Competition Period (as defined below).
(b) For the 12-month period immediately following such termination, the Company shall arrange to provide the Executive and his dependents insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the date of termination, at no greater cost to the Executive than the cost to the Executive immediately prior to such date. Benefits otherwise receivable by the Executive pursuant to this Section 2.2(b) shall cease immediately upon the discovery by the Company of the Executive's breach of the covenants contained in Sections 5 or 6 hereof. In addition, benefits otherwise receivable by the Executive pursuant to this Section 2.2(b) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the 12-month period following the Executive's termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the date of termination.
2.3 Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state, or local law and any additional withholding to which the Employee is vested on Executive has agreed.
2.4 If the Date of Termination in accordance Executive's employment with the terms under Company terminates during the Term, the Executive shall not be required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating pursuant to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsthis Section 2.
Appears in 1 contract
Sources: Severance Agreement (Rayovac Corp)
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (ia) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s Executive's employment with ------------------ the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(bpursuant to subsection 8.01(d), then the Company shall use its best efforts to assist Executive in obtaining new employment and, in furtherance of such commitment, shall provide Executive with up to $12,000 in out-placement services. Subject to the provisions of subsection (b) of this section 8.02, in such event, the Company shall also pay to Employee only Executive, as severance pay, (i) his base monthly salary for a period of twelve (12) months after the date of termination of employment, and (ii) an amount equal to the average bonus paid to Executive for the three (3) years immediately prior to the year of termination of employment, and shall continue to provide health insurance benefits for Executive (or, at the Company's option, to reimburse Executive for the cost to him of maintaining comparable health insurance benefits) for a period of twelve (12) months after the date of termination of employment. The base salary payments shall continue to be made on a monthly basis. The bonus payment shall be paid to Executive in one (l) lump sum within thirty (30) days after the date of termination.
(b) Notwithstanding the provisions of subpart (a) of this section 8.02, if Executive subsequently obtains other full-time employment, the amount of the compensation he receives from such other employment from and after the date which is six (6) months after the date of termination of employment shall be offset against the Company's obligations under this section 8.
(c) If Executive voluntarily leaves the employment of the Company, or his employment is terminated pursuant to subsection 8.01(a), 8.01(b) or 8.01(c), his right to base salary and any accrued but unused vacation or PTO earned through the Termination Datebenefits shall immediately terminate, except as may otherwise be required by applicable law.
g. In addition to (d) If Executive's employment by the benefits otherwise provided in Section 5Company terminates within six (6) months of the end of any fiscal year of the Company, the Employee Executive shall also be entitled to receive a pro rata portion (based on the following benefits and payments upon number of days of employment during that fiscal year) of any bonus payment that would have been payable to him for that fiscal year pursuant to section 4.02 if he had been in the Employee’s termination of employment: (i) the payment employ of the Employee’s base salary and Company for the full fiscal year. No bonus will be payable to Executive with respect to any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to fiscal year in which the Employee is vested on the Date of Termination in accordance with the terms under he was employed by the Company pension and welfare benefit plans for less than six (6) months or with respect to any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) fiscal year after the right to exercise and to receive all rights fiscal year in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programshis employment terminated.
Appears in 1 contract
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, the Company shall pay the Executive the payments described in this Section 5(b), 6.1 ("Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control during the term of this Agreement, in addition to the payments and benefits described in Section 5.0 hereof, unless such termination is (A) by the Company other than for Cause, or (B) by reason of the Executive's death or Disability. The Executive's employment shall be deemed to have been terminated following a Change in Control by the Company without Cause if the Executive's employment is terminated prior to a Change in Control without Cause at the direction (or action which constitutes a direction) of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control.
(i) Subsequent to the Date of Termination, the Employee Company shall be entitled make cash Severance Payments to the Executive over a thirty-six (36) month period in substantially equal bi-weekly installments, in an amount equal to two and ninety-nine one hundredths (2.99) times the aggregate sum of one times: (ia) the higher of the Executive's annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate effect immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date occurrence of the Company that occurs more than 60 days after event or circumstance upon which the Notice of Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified is based or in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject effect immediately prior to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)) the higher of the highest annual bonus paid to the Executive in the three years preceding the year in which the Date of Termination occurs or paid in the three years preceding the year in which the Change in Control occurs.
(ii) For a thirty-six (36) month period after the Date of Termination, the Company will not be obligated shall arrange to make provide the Executive with medical and dental insurance benefits substantially similar to those which the Executive is receiving without cost to Executive immediately prior to the Notice of Termination (without giving effect to any payments reduction in such benefits subsequent to or on behalf of Employee under Section 5(a) and (ba Change in Control), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared . Benefits otherwise receivable by the Company (the “Release”) and delivered Executive pursuant to Employee no later than five business days after the Termination Date, this Section 6.1 (ii) all applicable consideration periods and rescission periods provided by law with respect shall be reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the CompanyExecutive without cost, including without limitation by another Person, during the right to seek specific performance or an injunction.
d. If, when thirty-six (36) month period following the Employee’s Executive's termination of employment occursand any such benefits actually received by the Executive shall be reported to the Company by the Executive. If the benefits provided to the Executive under this Section 6.1(ii) result in a decrease pursuant to Section 6.2 in the Severance Payments and this Section 6.1(ii) benefits are thereafter reduced pursuant to the immediately preceding sentence because of the receipt of comparable benefits, the Employee is a specified employee within Company shall, at the meaning time of section 409A such reduction, pay to the Executive the lesser of, (a) the amount of the Code, and if decrease made in the Severance Pay would be considered deferred compensation under section 409A of Payments pursuant to Section 6.2, or (b) the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day Executive without being, or causing any other payment to be, nondeductible by reason of Section 280G of the seventh month after the month in which the Employee’s separation from service occursCode.
e. In 6.2 Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result Executive in all connection with a Change in Control or a portion of such payment being subject to excise tax under Section 4999 the termination of the CodeExecutive's employment (whether or not received pursuant to the terms of this Agreement) (all such payments and benefits, including but not limited to the Severance Payments, being hereinafter called the "Total Payments") would be subject in whole or in part to the Excise Tax, then the amounts due under Section 5(b) that the Company Severance Payments shall pay be reduced to the Employee shall be either (i) extent, but only to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent, necessary so that would result in no portion of the payment being Total Payments is subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results . The determination as to whether a reduction in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required Severance Payments is to be made under this Section 5(e) 6.2 and, if so, the amount of any such reduction shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately 's auditors or by such other firm of certified public accountants, benefits consulting firm or legal counsel as the Board may designate prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”)Change in Control. The Company shall cause provide the Accounting Firm to provide detailed supporting executive with its calculations of its determinations the amounts referred to in this Section 6.2 and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations.
6.3 The Company also shall pay to the Company Executive all legal fees and Employee. Notice must be given expenses incurred by the Executive as a result of a termination, which entitles the Executive to the Accounting Firm Severance Payments (including all such fees and expenses, if any, incurred in disputing any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder). Such payments shall be made within 15 five (5) business days after an event entitling Employee to an amount due under this Agreement. All delivery of the Executive's written requests for payment accompanied by such evidence of fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination incurred as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeereasonable may require.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Change in Control Agreement (Evci Career Colleges Inc)
Severance Payments. a. Except as provided 6.01 Subject to Section 6.02 hereof, the Company shall pay the Executive the payments described in this Section 5(b), 6.01 (the "Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, unless such termination is (i) by the Company other than for Cause Cause, (ii) by reason of death, Disability or Retirement, or (iii) by the Executive without Good Reason. For purposes of the immediately preceding sentence, if a termination of the Executive's employment occurs prior to a Change in Control, the Employee but following a Potential Change in Control in contemplation of and relating to said Change in Control, such termination shall be entitled deemed to an amount have followed a Change in Control and to have been (i) by the Company without Cause, if the Executive's employment is terminated without Cause at the direction of such Person, or (ii) by the Executive with Good Reason, if the Executive terminates his employment with Good Reason and the act (or failure to act) which constitutes Good Reason occurs following such Potential Change in Control and at the direction of such Person.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to the aggregate sum of one times: (i) the higher of (x) [TWO AND ONE-HALF (2.5), WITH RESPECT TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the Executive's annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination Date is based or (the aggregated amount, the “Severance Pay”y) [TWO AND ONE-HALF (2.5), which shall be paid WITH RESPECT TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the average of Executive's annual base salary for the three (3) years immediately prior to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date occurrence of the Company that occurs more than 60 days after event or circumstance upon which the Notice of Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reasonbased, and (ii) the Termination Date occurs within 24 months immediately following a Change in Controlhigher of (x) [TWO AND ONE-HALF (2.5), the Employee shall receive 2.99 WITH RESPECT TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be amount paid to the Employee Executive as an annual discretionary bonus in a single lump sum on the first day of year preceding the seventh month after the month year in which the Employee’s separation from service Date of Termination occurs or (y) [TWO AND ONE-HALF (2.5), WITH RESPECT TO ALL OF THE COMPANY'S EXECUTIVE OFFICERS OTHER THAN THE COMPANY'S CONTROLLER] [ONE-HALF (1/2), WITH RESPECT TO THE COMPANY'S CONTROLLER] times the average annual discretionary bonus paid to the Executive in the three (3) years preceding that in which the Date of Termination occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b(B) that the The Company shall pay to the Employee shall be either Executive a lump sum amount, in cash, equal to the sum of (i) any annual discretionary bonus which has been allocated or awarded to the full payment Executive for a completed fiscal year preceding the Date of Termination but has not yet been paid (pursuant to Section 5.02 hereof or otherwise), and (ii) such lesser amount a pro rata portion of an annual discretionary bonus for the fiscal year in which the Date of Termination occurs, determined by multiplying the Executive's annual discretionary bonus awarded or paid for the most recently completed fiscal year by a fraction, the numerator of which shall be the number of full days the Executive was employed by the Company during the fiscal year in accordance with this Section 5(e) that would result in no portion which the Executive's Date of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, Termination occurred and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, denominator of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts which shall be reduced in three hundred and sixty-five (365).
(C) At the following order option of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only Executive exercised by written notice to the extent necessary to satisfy Board of Directors within thirty (ii30) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on and/or before the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay repurchase all Options held by Executive that the Executive elects to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition sell to the benefits otherwise provided in Section 5, the Employee Company (which Options shall be entitled cancelled upon the making of the payment referred to below) by the payment of a lump sum amount, in cash, equal to the following benefits and payments upon the Employee’s termination of employment: product of
(i) the payment excess of the Employee’s base salary and higher of (x) the Current Market Value of the Parent Shares (as hereinafter defined) or (y) the highest per share price for Parent Shares actually paid within six (6) months preceding or after any other form or type Change in Control, over the per share exercise price of compensation earnedeach such Option held by the Executive, vested and payable through the Date of Termination; times
(ii) the right to receive all benefits to which the Employee is vested on the Date number of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of Parent Shares covered by each such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsOption.
Appears in 1 contract
Severance Payments. a. Except as provided 4.1 If a Qualifying Termination shall occur, in addition to any payments and benefits to which the Executive is entitled under Section 5(b3 hereof, the Company shall pay the Executive the payments described in this Section 4.1 (the “Severance Payments”); provided, however, that, in the case of clauses (A), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control(B), (C), (D) and (F) below, the Employee Executive shall have executed and not revoked a release of claims in the form set forth in Exhibit A hereto. The Executive shall also be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date Payments (and including any installment that would have otherwise been paid on regular payroll dates during payments and benefits under Section 3) if the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the EmployeeExecutive’s employment is terminated by the Company without other than (x) for Cause or (y) by reason of death or Disability within the Employee for Good Reason, and six (ii6) the Termination Date occurs within 24 months month period immediately following preceding a Change in ControlControl and the Executive reasonably demonstrates that such termination is otherwise in connection with or in anticipation of a Change in Control that actually occurs during the term of the Agreement (a “Pre-Change in Control Termination”) ; provided, however, that, in the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(acase of clauses (A), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control(B), provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a(C), (D) and (b)F) below, the Company will Executive shall have executed and not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs revoked a release of claims in favor the form set forth in Exhibit A hereto; and provided further, however, that any such payments shall be offset by the amount of severance previously paid to the Executive under the Employment Agreement between the Executive and the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement dated as of the dates of the payments. The cessation of these payments will be in addition todate first written above and, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section extent permitted by Section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A any other severance policy, plan or program of the Code, and finally if an exemption from the six-month delay requirement Company.
(A) In lieu of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay any further salary payments for the first six months following separation from service shall be paid to the Employee Executive for periods subsequent to the Date of Termination and in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment lieu of any equity awards or other compensation or benefitsseverance benefit otherwise payable to the Executive, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either Executive a lump sum severance payment, in cash, equal to two hundred and fifty percent (250%) of the sum of (i) the full payment Executive’s annual base salary then in effect (or immediately prior to any reduction resulting in a termination for Good Reason, if applicable) (the “Change in Control Salary”), plus (ii) such lesser amount determined the Executive’s target annual bonus for the year of termination, or if no target has been set as of the Date of Termination, the target bonus for the year immediately prior to the year in which the Date of Termination occurs (the “Change in Control Bonus”).
(B) Provided that the Company actually achieves the criteria requisite to make payments in respect of awards for the plan year during which the Executive’s employment terminates under the Management Achievement Plan (the “MAP”) or any other incentive compensation plan adopted by the Company in accordance with this Section 5(e) that would result in no portion of which the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reducedExecutive participates, the amounts Executive shall be reduced in the following order of priority: firsteligible to receive an award for such plan year, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) which shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded prorated based on the nature of the payment, as in effect on the Date of Termination. Under the MAP, but if not otherwise specified, compounded on a semiannual basis. The determination the Executive shall receive an amount equal to the product of the Executive’s eligible base salary earnings for the time worked from the start of the performance period to the Date of Termination multiplied by the Accounting Firm target bonus award percentage and the Executive’s applicable business unit achievement factor. Such amount shall be final paid in the calendar year following the plan year to which the payment relates, as soon as practicable following the certification of such plan year’s performance by the Management Development and binding on Compensation Committee, at the Company and the Employeesame time as payments are made to other MAP participants.
f. If Employee’s employment with (C) For the Company is terminated by thirty month period immediately following the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Date of Termination, then the Company shall pay arrange to Employee only his base salary provide the Executive (which includes the Executive’s eligible dependents for purposes of this subsection (C)) with life, disability, accident and any accrued but unused vacation or PTO earned through health insurance benefits substantially similar to those which the Termination Date.
g. In addition Executive was receiving immediately prior to the benefits otherwise provided Date of Termination (or immediately prior to any reduction resulting in Section 5a termination for Good Reason, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: if applicable); provided, however, that (i) the payment of Executive’s and his qualified dependents’ COBRA eligibility period shall include the Employee’s base salary and any other form or type of compensation earned, vested and payable through period during which the Date of TerminationCompany is providing benefits under this subsection (C); (ii) unless the right Executive consents to receive all a different method (or elects COBRA coverage at applicable COBRA rates), such health insurance benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefitsshall be provided through a third-party insurer; and (iii) the right Executive shall be responsible for the payment of premiums for such benefits in the same amount as active employees of the Company. Benefits otherwise receivable by the Executive pursuant to exercise this subsection (C) shall be reduced to the extent comparable benefits (including continued coverage for any preexisting medical condition of any person covered by the benefits provided to the Executive and his eligible dependents immediately prior to receive all rights the Date of Termination) are actually received by or made available to the Executive by a subsequent employer during the twenty-four month period following the Executive’s Date of Termination (and any such benefits actually received by or made available to the Executive shall be reported to the Company by the Executive). Notwithstanding the foregoing, in which the Employee is vested event of a Pre-Change in Control Termination, on the sixtieth (60th) day following the Change in Control the Company shall pay or reimburse the Executive for any amounts or benefits it would have been responsible to pay or provide to the Executive under this Section 4.1(C) during the period prior to the Change in Control, had the Change in Control occurred on the Date of Termination.
(D) If the Executive would have become entitled to benefits under the Company’s post-retirement health care or life insurance plans (as in effect immediately prior to the Date of Termination (or immediately prior to any reduction resulting in a termination for Good Reason, in accordance with if applicable)) had the Executive’s employment terminated at any time during the period of thirty months after the Date of Termination, the Company shall provide such post-retirement health care or life insurance benefits to the Executive (subject to any employee contributions required under the terms of all awards under any such plans in the same amounts as active employees of the Company) commencing on the later of (i) the date that such coverage would have first become available or (ii) the date that benefits described in subsection (C) of this Section 4.1 terminate.
(E) The Company stock purchase and stock incentive plans shall pay the Executive, at a daily salary rate calculated from the Executive’s annual base salary in effect immediately prior to the Date of Termination (or programs, or any successor immediately prior to any reduction resulting in a termination for Good Reason, if applicable), a lump sum amount equal to all earned but unused vacation days through the Date of Termination.
(F) The Company shall pay, no later than the last day of the calendar year in which they are incurred, the reasonable fees and expenses of a full service nationally recognized executive outplacement firm until the earlier of the date the Executive secures new employment or the date which is twenty-four months following the Executive’s Date of Termination; provided that in no event shall the aggregate amount of such plans or programspayments exceed $30,000.
Appears in 1 contract
Sources: Change in Control Agreement (Armstrong World Industries Inc)
Severance Payments. a. Except as provided in Section 5(b), upon If within one year following the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company or any of its Affiliates without Cause or by the Employee for Good Reason, then the Company will pay the Employee the amounts, and provide the Employee the benefits, described in subsection 2.1 and subsection 2.2 of this Section 2 (“Severance Payments”), provided that Employee complies with the requirements of Section 5 regarding execution and delivery of a general release. The payments described in this Section 2 are in addition to the Accrued Benefits (which, for the avoidance of doubt, will be provided to the Employee upon any termination of employment and without regard to whether the Employee executes a release).
2.1 The Company will pay to the Employee a lump sum cash severance payment equal to $850,000. Subject to the provisions of Section 13, the payment provided for in this subsection 2.1 will be made on or before the second regularly scheduled payroll date following the effective date of the release described in Section 5 and in any event no later than March 15 of the year following the year in which the termination of employment occurs.
2.2 For the number of months immediately following the Date of Termination (not to exceed 12 months) determined by dividing (i) the lump sum cash change in control severance payment payable to the Employee under subsection 2.1 of this Agreement by (ii) the Employee’s average monthly base salary in effect as of the Date of Termination Date occurs within 24 months immediately following a Change in Control, (such quotient to be rounded down to the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (bnearest whole number), the Company will not be obligated provide the Employee and the Employee’s eligible dependents with health insurance benefits substantially similar to make any payments those provided to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor active employees of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; provided, however, that (iix) the right to receive all benefits to Employee’s and the Employee’s qualified dependents’ COBRA eligibility period will include the period during which the Company is providing benefits under this subsection 2.2, (y) the Employee is vested on will be responsible for the Date payment of Termination premiums for such benefits in accordance with the terms under same amount as active employees of the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iiiz) the right to exercise such benefits will cease if and to receive all rights in which the extent the Employee is vested on the Date becomes eligible for similar benefits by reason of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsnew employment.
Appears in 1 contract
Sources: Change in Control Severance Agreement (Kapstone Paper & Packaging Corp)
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 two times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the [later of of] 60th day following the Termination Date [or the closing on the event constituting the Change in Control], provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.,
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except (1) At any time prior to a Change in Control (as provided in Section 5(bdefined below), upon in the termination of Employee’s event that (A) Executive's employment hereunder is terminated by the Company other than at any time for any reason except (i) for Cause prior (as defined below) or (ii) due to Executive's death or Disability (as defined below), or (B) Executive terminates her own employment hereunder for Good Reason (as defined below), then, in either such event, Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to her on the Termination Date as salary continuation (pursuant to the Company's normal payroll procedures) for a period equal to six (6) consecutive months following the Termination Date; provided that if such termination occurs within twelve (12) months of the Effective Date, Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to her on the Termination Date as salary continuation (pursuant to the Company's normal payroll procedures) for a period equal to twelve (12) consecutive months following the Termination Date. In the event of Executive's death during such salary continuation period, the Company shall pay the sum of the present value of all remaining payments (using a 5% discount rate) in a single payment to Executive's surviving spouse, if any, or if there is no surviving spouse, to Executive's estate within 60 days of her death. Such severance payments shall be subject to Sections 10 and 11 hereof. Prior to a Change in Control, in the Employee event that Executive's employment is terminated through notice of non-renewal as of the end of the Initial Term of Employment (pursuant to Section 4) or any one-year Renewal Term, Executive shall be entitled to an amount equal receive, and the Company shall be obligated to the aggregate of one times: (i) the annual rate of pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to her on the Termination Date as salary continuation (pursuant to the aggregated amountCompany's normal payroll procedures) for each month following her Termination Date, not to exceed six months, that Executive is (A) not in violation of the “Severance Pay”confidential information, non-competition and other covenants of Sections 10 and 11 hereof and (B) not employed by another employer, as determined by the Company.
(2) At any time after a Change in Control (as defined below), which shall be paid to Employee by in the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company event that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(cA) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s Executive's employment hereunder is terminated by the Company without at any time for any reason except (i) for Cause (as defined below) or by the Employee for Good Reason, and (ii) due to Executive's death or Disability (as defined below), or (B) Executive terminates her own employment hereunder for Good Reason (as defined below in this Section 6(c)), then, in either such event, Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation except as provided below in this paragraph) then being paid to her on the Termination Date occurs as salary continuation (pursuant to the Company's normal payroll procedures) for a period equal to twelve (12) consecutive months following the Termination Date, plus an additional single sum payment equal to one-half of Executive's target bonus (pursuant to Section 3(b)) for the Bonus Year in which the termination occurred, which bonus shall be payable within 24 months immediately following 30 days from the Termination Date. In the event of Executive's death during such salary continuation period, the Company shall pay the sum of the present value of all remaining payments in a single payment (using a 5% discount rate) to Executive's surviving spouse, if any, or if there is no surviving spouse, to Executive's estate within 60 days of her death. After a Change in Control, in the Employee shall receive 2.99 times event that the Severance Pay calculated in accordance with Company terminates Executive's employment through notice of nonrenewal as of the end of the Initial Term of Employment (pursuant to Section 5(a)4) or any one-year Renewal Term, which Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to Employee by the Company in a lump sum her on the later Termination Date as salary continuation (pursuant to the Company's normal payroll procedures) for a period of 60th day six (6) consecutive months following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfiedDate.
c. Notwithstanding the foregoing provisions of (3) Except as otherwise specifically provided in this Section 5(a) and (b6(b), the Company will not be obligated to make any severance payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will shall be in addition to, and shall not as an alternative toreduce or offset, any other remedies at law or in equity available payments that are due to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption Executive from the six-month delay requirement of section 409A(a)(2)(B)(iCompany (or any other source) of the Code is not availableor under any other agreements, the Employee’s Severance Pay except that severance payments for the first six months following separation from service hereunder shall be paid offset any severance benefits otherwise due to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of Executive under any equity awards severance pay plan or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined program maintained by the Company in accordance with that covers its employees generally. The provisions of this Section 5(e6(b) that would result in no portion shall supersede any conflicting provisions of the payment being subject this Agreement but shall not be construed to excise tax under Section 4999 of the Code (the “Excise Tax”)curtail, whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all offset or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect limit Executive's rights to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunderother payments, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of whether contingent upon a Change in Control and second(as defined below) or otherwise, with respect to under this Agreement or any amount that constitutes the “deferral other agreement, contract, plan or other source of compensation” under Section 409A payment.
(4) A "CHANGE IN CONTROL" of the Code Company shall be deemed to have occurred if any of the following shall have taken place: (A) any "person" (as such term is used in Sections 13(d) and regulations promulgated thereunder14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other than Gord▇▇ ▇▇▇▇ ▇▇▇ his Affiliates (defined below), disregard taken together, is or becomes the acceleration "beneficial owner" (as defined in Rule 13d-3 under the time Exchange Act, or any successor provisions thereto), directly or indirectly, of payment and then disregard securities of the acceleration Company representing thirty-five percent (35%) or more of vesting as a result the combined voting power of the Company's then-outstanding voting securities; (B) the approval by the stockholders of the Company of a Change in Control first with respect to Company funded amounts and then the Employee’s deferralsreorganization, merger, or consolidation, in each case only with respect to which persons who were stockholders of the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor Company immediately prior to the event triggering the payments that are subject to the Excise Tax such reorganization, merger, or consolidation do not, immediately thereafter, own or control more than fifty percent (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d50%) of the Code) compounded based on combined voting power entitled to vote generally in the nature election of directors of the paymentreorganized, merged or consolidated Company's then outstanding securities in substantially the same proportion as their ownership of the Company's outstanding voting securities prior to such reorganization, merger or consolidation; (C) a liquidation or dissolution of the Company or the sale of all or substantially all of the Company's assets; (D) in effect on the Date event any person is elected by the stockholders of Terminationthe Company to the Board who has not been nominated for election by a majority of the Board or any duly appointed committee thereof; or (E) following the election or removal of directors, but if a majority of the Board consists of individuals who were not otherwise specifiedmembers of the Board two (2) years before such election or removal, compounded on unless the election of each director who is not a semiannual basisdirector at the beginning of such two-year period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the two-year period. The determination by the Accounting Firm shall be final and binding on Board, in its discretion, may deem any other corporate event affecting the Company and the Employeeto be a "Change in Control" hereunder.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b(a) Subject to paragraph 9(b), upon in the termination of event that (i) Employee’s 's employment is terminated by the Company other than for Cause prior while this Agreement is in effect without Good Cause, (ii) the Employment Period is terminated by reason incapacity or disability in accordance with paragraph 3 or (iii) the employment period is terminated by reason of death in accordance with paragraph 4:
(1) With respect to a Change in Controlsubparagraphs 9(a), (i), (ii) and (iii), the Employee Company shall pay to Employee, no later than ten calendar days after the effective date of such termination of employment or date of death, as the case may be entitled to (the "Termination Date"), an amount equal to his then current annual base salary accrued through the aggregate Termination Date, his bonus for the most recently completed fiscal year prorated for the current fiscal year through the Termination Date plus one times the sum of one times: his then current annual base salary and bonus (without proration) for the most recently completed fiscal year, and the Company shall continue to keep in full force and effect all plans or policies of medical, 4 accident and life insurance benefits with respect to Employee and his dependents with the same level of coverage available to employees under the terms of those employee benefit plans for a period of twelve months, upon the same terms, costs and otherwise to the same extent as such plans are in effect for employees of the Company who were similarly situated to Employee as of the Termination Date, in addition to any amounts payable to the Employee under any severance pay plan maintained by the Company for its employees;
(2) With respect to subparagraphs 9(a) (i) the annual rate of base salary then being paid and (ii), to the Employee, plus (ii) the average extent restricted shares awarded to him as provided in paragraph 8 of the past three years short term bonus pay, plus (iii) the Company’s portion this Agreement do not become fully vested and nonforfeitable as of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with paragraph 5 of the Company’s regular payroll cycleRestricted Stock Agreement, such restricted shares shall become fully vested and non-forfeitable as of the Termination Date; provided, that with respect to subparagraph 9(a) (iii), such restricted shares shall become vested and non- forfeitable in accordance with paragraph 5 of the Restricted Stock Agreement; and
(3) With respect to subparagraphs 9(a) (i) and (ii), to the extent options granted to him under paragraph 8 of this Agreement do not become fully vested and exercisable as of the Termination Date in accordance with paragraph 2 of the Option Agreement, such options shall become vested and exercisable for three months commencing on the first regular payroll date Termination Date; provided, that with respect to subparagraph 9(a) (iii), such options shall become vested and exercisable in accordance with paragraph 2 of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfiedOption Agreement.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) In the event that Employee’s 's employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs while this Agreement is in effect within 24 months immediately two years following a Change in Control, Control (as hereinafter defined) with or without Good Cause or (ii) if Employee terminates his own employment within 6 months after a 25% or more reduction in his base annual salary or of the Employee shall receive 2.99 times the Severance Pay calculated board significantly reducing his responsibilities and removing his title as President and Chief Operating Officer (other than in accordance with Section 5(a), which shall be paid anticipation 5 of Employee's retirement):
(1) With respect to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(csubparagraphs 9(b) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a(i) and (bii), the Company will not be obligated shall pay to make any payments to or on behalf of Employee under Section 5(a) and (b)Employee, as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business ten days after the Termination Date, an amount equal to his then current annual base salary accrued through the Termination Date, his bonus for the most recently completed fiscal year prorated for the current fiscal year through the Termination Date plus one and one half times the sum of his then current annual base salary and bonus for the most recently completed fiscal year (iiwithout proration) and the Company shall continue to keep in full force and effect all applicable consideration periods plans or policies of medical, accident and rescission periods provided by law life insurance benefits with respect to Employee and his dependents with the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with same level of coverage available to employees under the terms of this Agreement those employee benefit plans for a period of eighteen months, upon the same terms, costs and otherwise to the same extent as such plans are in effect for employees of the Company who were similarly situated to Employee as of the dates of the payments. The cessation of these payments will be Termination Date, in addition to, and not as an alternative to, to any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid amounts payable to the Employee under any severance pay plan maintained by the Company for its employees;
(2) With respect to subparagraph 9(b) (ii), all restricted shares awarded to him as provided in a single lump sum paragraph 8 of this Agreement shall become fully vested and non-forfeitable as of the Termination Date; provided, that with respect to subparagraph 9(b) (i), such restricted shares shall become vested and non-forfeitable in accordance with paragraph 5 of the Restricted Stock Agreement; and
(3) With respect to subparagraph 9(b) (ii), all options granted to him under paragraph 8 of this Agreement shall become vested and exercisable for three months commencing on the first day Termination Date; provided, that with respect to subparagraph 9(b) (i), such options shall become vested and exercisable in accordance with paragraph 2 of the seventh month after the month in which the Employee’s separation from service occursOption Agreement.
e. In (c) Subject to paragraph 9(b), in the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received Employee's employment is 6 terminated by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(bCompany with Good Cause:
(1) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business no later than ten days after an event entitling Employee to the Termination Date, an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as equal to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), his then the Company shall pay to Employee only his current annual base salary and any accrued but unused vacation or PTO earned through the Termination Date.;
g. In addition (2) all restricted shares awarded to the benefits otherwise him as provided in Section 5, the Employee paragraph 8 of this Agreement shall be entitled to the following benefits become fully vested and payments upon the Employee’s termination of employment: (i) the payment non-forfeitable as of the Employee’s base salary and any other form or type Termination Date; and
(3) all options granted to him under paragraph 8 of compensation earned, this Agreement shall become vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested exercisable for three months commencing on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsDate.
Appears in 1 contract
Sources: Employment Agreement (Humana Inc)
Severance Payments. a. Except as provided in Section 5(b), upon 6.1 If (i) the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to is terminated on or within two (2) years following a Change in Control, other than (A) by the Employee shall be entitled to an amount equal to Company for Cause, (B) by reason of death or Disability, or (C) by the aggregate of one times: (i) the annual rate of base salary then being paid to the EmployeeExecutive without Good Reason, plus or (ii) the average of Executive voluntarily terminates his employment for any reason during the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a 30 day period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date anniversary of a Change in Control, then, in either such case, the Company that occurs more than 60 days after shall pay the Termination Date Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date“Severance Payments”), provided and Section 6.2, in addition to any payments and benefits to which the conditions specified in Executive is entitled under Section 5(c) 5 hereof. For purposes of this Agreement, the Executive’s employment shall be deemed to have been satisfied.
b. Notwithstanding Section 5(a) and subject to terminated following a Change in Control by the limitation in Section 5(e)Company without Cause or by the Executive with Good Reason, if (i) the EmployeeExecutive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, or (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee Executive shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay to the Executive, on the first day of the seventh (7th) month following the month in which occurs the Executive’s Separation from Service, a lump sum severance payment, in cash, equal to three (3) times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid Executive’s target annual bonus pursuant to Employee any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason. The amount payable pursuant to this Section 6.1(A) shall be in lieu of any cash severance or salary continuation benefit payable to the Executive under any other plan, policy or program of the Company or any of its Affiliates (for which the Executive shall be deemed ineligible if amounts are payable hereunder) or any written employment agreement between the Executive and the Company or any of its Affiliates.
(B) For the 36 month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a lump sum different method (after taking into account the effect of such method on the later calculation of 60th day “parachute payments” pursuant to Section 6.2 hereof), such health and life insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive by another employer during the 36 month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination Date or, if more favorable to the Executive, the first occurrence of an event or the closing on the event circumstance constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfiedGood Reason.
c. Notwithstanding (i) If accident and health insurance benefits are provided, with the foregoing provisions Executive’s consent, under a health plan that is subject to Section 105(h) of Section 5(athe Code, then, for any period of coverage following the end of the continuation period required under Sections 601 through 609 of the Employee Retirement Income Security Act of 1974, as amended, the benefits payable under such health plan shall comply with the requirements of Sections 1.409A-3(i)(1)(A) and (bB) of the Treasury regulations and, if and to the extent necessary, the Company shall amend such health plan to comply therewith;
(ii) Notwithstanding anything in this Section 6.1(B) to the contrary, with respect to the first six (6) months following the Executive’s Separation from Service, if the premiums payable by the Company for group term life insurance on the Executive’s life exceeds the amount of the “limited payments” exemption set forth in Section 1.409A-1(b)(9)(v)(B) of the Income Tax Regulations (or any successor provision thereto), then, to the extent required in order to comply with Code Section 409A, the Executive, in advance, shall pay to the Company an amount equal to the premiums for any such life insurance policy, other than with respect to life insurance coverage to which the Executive would be entitled independent of this Agreement. Promptly following the end of such six (6) month period, the Company will not be obligated make a cash payment to make any payments the Executive equal to or on behalf the difference between the aggregate amount paid by the Executive for such coverage and the amount that the Executive would have paid for such life insurance coverage if such cost had been determined pursuant to this Section 6.1(B) other than this subparagraph (ii).
(C) Each option to purchase shares of Employee under Section 5(a) common stock of the Company outstanding as of the Date of Termination shall become fully vested and (b), exercisable as applicable, unless of such date and shall remain exercisable during the shorter of (i) Employee signs a release the remaining term of claims in favor of such option (such remaining term to be determined as if the Company in a form as prepared by the Company (the “Release”Executive were still actively employed) and delivered to Employee no later than five business days after the Termination Date, or (ii) all applicable consideration periods ten (10) years from the date on which the option originally was granted, and rescission periods provided by law with respect each grant of restricted stock or similar grant, the award of which is contingent only upon the continued employment of the Executive to a subsequent date, shall become fully vested as of the Date of Termination.
(D) Unless payable to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with Executive under the terms of this Agreement as of any annual or long-term incentive plan, the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available Company shall pay to the CompanyExecutive, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh (7th) month after following the month in which occurs the EmployeeExecutive’s separation Separation from service occursService, a lump sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation (including performance share awards) which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards (including performance share awards) to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level (or if higher, at the then projected actual final level), of the individual and corporate performance goals established with respect to such award, by the fraction obtained by dividing the number of full months and any fractional portion of a month during such performance award period through the Date of Termination by the total number of months contained in such performance award period. Notwithstanding the forgoing, if and to the extent the Executive had elected to defer receipt of any such award, and if the Executive’s deferral election is irrevocable as of the Date of Termination for purposes of Code Section 409A, the amount calculated above shall be credited to the Executive’s account under the applicable deferred compensation plan in lieu of being distributed directly to the Executive.
e. In (E) The benefits then accrued by or payable to the Executive under the Company’s Supplemental Executive Retirement Plan and Pension Parity Plan, or any successor to any such plan, and the benefits then accrued by or payable to the Executive under any other nonqualified plan providing supplemental retirement or deferred compensation benefits shall become fully vested notwithstanding any eligibility conditions that would otherwise apply with respect to such benefits and the benefit, as so vested, will be paid in accordance with the terms of the applicable plan or program. With respect to the Supplemental Executive Retirement Plan, and any other nonqualified nonaccount balance plan or portion of a plan providing supplemental retirement or deferred compensation benefits, the Company shall transfer an amount in cash sufficient to pay all benefits then accrued by or payable to the Executive under the terms of such plans into an irrevocable grantor trust (a so-called “Rabbi Trust”) whose trustee shall be an entity unaffiliated with and independent of the Company, which trust shall be required to pay such benefits in accordance with and subject to the applicable terms of each plan (as modified by this Agreement) and the trust instrument; provided that if such transfer to the Rabbi Trust would be treated, under Code Sections 83 and 409A(b), as a taxable transfer to the Executive, such transfer to the Rabbi Trust shall not be made until such time as the transfer will not be treated as a taxable event under Code Sections 83 and 409A; and provided further, that any amendment or termination of any such plan on or after the Change in Control date the effect of which would be to reduce or eliminate the benefit payable to the Executive shall be disregarded.
(F) The Company shall reimburse the Executive for expenses incurred for outplacement services suitable to the Executive’s position, until December 31 of the second calendar year following the calendar year in which occurs the Executive’s Separation from Service (or, if earlier, until the first acceptance by the Executive of an offer of employment) in an amount not exceeding 25% of the sum of the Executive’s annual base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstances constituting Good Reason, and target annual bonus pursuant to any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason.
(G) For the six (6) month period immediately following the Date of Termination, the Company shall provide the Executive with the use of any Company provided automobile on the same terms and conditions that were applicable immediately prior to the Date of Termination or, if more favorable, immediately prior to the first occurrence of an event or circumstance constituting Good Reason. The Executive’s right to use a Company provided automobile cannot be exchanged for cash or another benefit.
(A) Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under Executive in connection with a Change in Control or the termination of the Executive’s employment (whether pursuant to the terms of this Agreement would or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, including the Severance Payments, being hereinafter called “Total Payments”) would be subject (in whole or a portion part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of such payment being subject to excise tax under Section 4999 section 280G of the CodeCode in such other plan, then arrangement or agreement, the amounts due under Section 5(b) that cash Severance Payments shall first be reduced, and the Company noncash Severance Payments shall pay thereafter be reduced, to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent necessary so that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that Total Payments is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax but only if (A) the “Accounting Firm”net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments). The Company shall cause ; provided, however, that the Accounting Firm to provide detailed supporting calculations of its determinations Executive may elect, to the Company extent that such election (and Employee. Notice must be given the right to such election) does not result in adverse tax consequences to the Accounting Firm within 15 business days after an event entitling Employee Executive under Code Section 409A, to an amount due under this Agreement. All fees and expenses have the noncash Severance Payments reduced (or eliminated) prior to any reduction of the Accounting Firm cash Severance Payments.
(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G section 280G(b) of the Code and the application of this Section 5.1shall be taken into account, all determination as to present value shall use 120 percent (ii) no portion of the applicable Federal rate Total Payments shall be taken into account which, in the opinion of tax counsel (determined under Section 1274(d“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm (the “Auditor”) which was, immediately prior to the Change in Control, the Company’s independent auditor, (A) does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) compounded based on or (B) constitutes reasonable compensation for services actually rendered, within the nature meaning of section 280G(b)(4)(B) of the paymentCode, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment excess of the Employee’s base salary and any other form or type of compensation earnedBase Amount allocable to such reasonable compensation, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights value of any non-cash benefit or any deferred payment or benefit included in which the Employee is vested on Total Payments shall be determined by the Date of Termination, Auditor in accordance with the terms principles of all awards sections 280G(d)(3) and (4) of the Code.
(C) At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company stock purchase has received from Tax Counsel, the Auditor or other advisors or consultants (and stock incentive plans or programs, or any successor to any such plans opinions or programsadvice which are in writing shall be attached to the statement).
6.3 The payments provided in subsections (A) and (D) of Section 6.1 hereof shall be made on the first day of the seventh (7th) month following the month in which occurs the Executive’s Separation from Service. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).
6.4 The Company also shall reimburse the Executive for all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating t
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon The Company shall make the termination of Employee’s employment by following payments (the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal "Severance Payments") to the aggregate of one times: Executive:
(i) The Company shall pay the annual rate Executive in one lump sum amount on the day that is eight (8) days after the date hereof US$67,500 (representing one-quarter of the Executive's base salary then being paid to as of the Employee, plus Resignation Date); and
(ii) Subject to the average acceleration provided below, the Company shall pay the Executive a total of US $202,500 (representing three-quarters of the past three years short term bonus pay, plus (iiiExecutive's base salary as of the Resignation Date) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over installments for a period of 12 months from the Termination Date in accordance commencing with the Company’s regular payroll cycleResignation Date (the "Severance Period"), commencing such payments to be made on the first regular payroll date 15th and 30th day of each month in the Company manner paid to the Executive immediately prior to the Resignation Date. The Severance Payments shall be less all applicable withholding for income and employment taxes. The parties agree that occurs more than 60 days after the Termination Severance Payments shall be in lieu of any compensation or benefits otherwise payable to the Executive for periods following the Resignation Date (and including any installment under the Employment Arrangements. Notwithstanding the foregoing, in the event that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date)Severance Period, provided the conditions specified in Section 5(c(x) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee Control (as defined below) shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date occur or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c(y) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation through the right sale of debt or equity at one of more closings and in one or more financings, raises at least CDN $2,000,000 in gross proceeds, then upon either such event the Company shall promptly pay to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A Executive all of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall Payments remaining to be paid to the Employee Executive in cash in one lump sum. For purposes of this Section 3(a), a single lump sum on "Change in Control shall mean (I) the first day acquisition by an individual, entity or group (a "Person") of beneficial ownership of any common shares of the seventh month Company if, after such acquisition, such Person beneficially owns 50% or more of the month combined voting power of the then outstanding securities of the Company entitled to vote generally in which the Employee’s separation from service occurs.
e. In election of directors (the event that "Outstanding Company Voting Securities"); or (II) the vestingconsummation of a merger, acceleration and payment of any equity awards amalgamation, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other compensation or benefits, together with all other payments and the value disposition of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 substantially all of the Code, then the amounts due under Section 5(b) that assets of the Company shall pay to the Employee shall be either (i) the full payment a "Business Combination"), unless, immediately following such Business Combination, all or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion substantially all of the payment being subject to excise tax under Section 4999 individuals and entities who were the beneficial owners of the Code (the “Excise Tax”)Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, whichever directly or indirectly, more than 50% of the foregoing amounts, taking into account combined voting power of the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results then outstanding securities entitled to vote generally in the receipt by the Employee, on an after-tax basis, election of directors of the greatest amount of the payment notwithstanding that all resulting or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reducedacquiring corporation in such Business Combination (which shall include, the amounts shall be reduced in the following order of priority: firstwithout limitation, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting a corporation which as a result of a Change in Control and second, with respect to any amount that constitutes such transaction owns the “deferral of compensation” under Section 409A Company or substantially all of the Code and regulations promulgated thereunder, disregard Company's assets either directly or through one or more subsidiaries) in substantially the acceleration in same proportions as their ownership of the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Outstanding Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor Voting Securities immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeesuch Business Combination.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Severance Agreement (Altarex Corp)
Severance Payments. a. Except as provided in Section 5(b)A. If, upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the three (3) year period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times Employee's employment with the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee Bank is terminated either:
(i) by the Company in Bank for no reason or for any reason other than as a lump sum on result of:
(a) the later gross negligence or willful misconduct by the Employee which is materially damaging to the business of 60th day following the Termination Date Bank or the closing on Company;
(b) the event constituting conviction of the Employee of any crime involving breach of trust or moral turpitude;
(c) a consistent pattern of failure by the Employee to follow the reasonable written instructions or policies of the Employee's supervisor or the Board of Directors of the Bank or Company; or
(d) receipt by the Bank or the Company of any written notice from the Georgia Department of Banking and Finance, the Federal Deposit Insurance Corporation or the Board of Governors of the Federal Reserve System requiring the removal of the Employee; or
(ii) by the Employee as a result of, and within ninety (90) days following:
(a) a reduction in the Employee's rate of regular compensation from the Bank to an amount below the rate of the Employee's regular compensation as in effect immediately prior to the Change in Control; or
(b) a requirement that the Employee relocate to a county other than Columbia, ▇▇▇▇▇▇▇▇ or Richmond County; or
(c) a reduction in the Employee's duties, title, and/or responsibilities, as were previously set prior to the Change in Control, provided then the conditions specified Bank shall pay the Employee an amount equal to two (2) times the rate of the Employee's annual base salary (not including bonuses, benefits, grant of options or any other compensation other than regular periodic salary payments) as in effect immediately prior to the Change in Control. Such compensation shall be paid in a lump sum within thirty (30) days after such termination, subject to such termination satisfying the definition of "separation from service" as set forth in Section 5(c409A of the Internal Revenue Code of 1986, as amended (the "Code") have been satisfiedand guidance issued thereunder.
c. Notwithstanding B. If, within ninety (90) days after the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), date upon which a Change in Control occurs as applicable, unless defined in:
(i) paragraphs 2.A. (i)-(iii) above, Employee signs may terminate his employment and the Bank shall pay Employee an amount equal to Employee's regular annual base salary (not including bonuses, benefits, grant of options, or any other compensation other than regular periodic salary payments) as in effect immediately prior to the Change in Control as set forth in paragraphs 2.A. (i)-(iii) hereof. Such compensation shall be paid in a release lump sum within thirty (30) days of claims such termination, subject to such termination satisfying the definition of "separation from service" as set forth in favor Section 409A of the Company in a form as prepared by the Company (the “Release”) Code and delivered to Employee no later than five business days after the Termination Date, guidance issued thereunder; or
(ii) all applicable consideration periods paragraph 2.B. above, Employee may terminate his employment and rescission periods provided by law with respect the Bank shall pay Employee an amount equal to one and one half (1 1/2) times the rate of Employee's regular annual base salary (not including bonuses, benefits, grant of options, or any other compensation other than regular periodic salary payments) as in effect immediately prior to the Release have expired without Employee rescinding Change in Control as set forth in paragraph 2.B. hereof. Such compensation shall be paid in a lump sum within thirty (30) days of such termination, subject to such termination satisfying the Release, definition of "separation from service" as set forth in Section 409A of the Code and (iii) Employee is guidance issued thereunder.
C. Any other provision in strict compliance with the terms of this Agreement as notwithstanding,
(i) in the event that any payment or benefit, or any combination of the dates of the payments. The cessation of these payments will payment or benefits, to Employee hereunder (hereinafter "Total Payments") is determined to be in addition to, and not as an alternative to, any other remedies at law or in equity available "excess parachute payment" pursuant to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A Section 280G of the Code, and if Employee's right to the Severance Pay would Total Payments shall automatically be considered deferred compensation under section 409A reduced so that the aggregate of the Codeapplicable values thereof for purposes of Code Section 280(G) shall be equal to 299 percent of the Employee's "base amount" by first reducing, to the extent necessary (A) the cash portion of the Total Payments subject to this Paragraph (if necessary, to zero (0)), and finally then (B) all other non-cash Total Payments subject to this Paragraph (if an exemption from necessary, to zero (0)). Any determination required by the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service preceding sentence shall be paid made by independent certified public accountants or tax counsel (hereinafter, such party shall sometimes be hereinafter referred to as the "Independent Adviser") selected by Bank. In making any such determination as to the Employee in a single lump sum application and effect of this Paragraph on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit Total Payments received or to be received by the Employee under this Agreement would result in all or a Employee, (i) no portion of such payment being subject to excise tax under the Total Payments shall be taken into account which in the opinion of the Independent Adviser does not constitute a "parachute payment" within the meaning of Section 4999 280G(b)(2) of the Code, then including by reason of Section 280G(b)(4)(A) of the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or Code; (ii) such lesser amount those Total Payments provided under this Paragraph shall be reduced only to the extent necessary so that the Total Payments (other than those referred to in clause (i)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the Independent Adviser; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Company Independent Advisor in accordance with this Section 5(ethe principles of Sections 280G(d)(3) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code and (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 4) of the Code. In .
(ii) if Employee is a "specified employee" within the event meaning of Section 409A of the amounts Code, any payments or installments which constitute "deferred compensation" under Code Section 409A and would otherwise become due under Section are reduced, this Agreement during the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under first six (6) months (or such longer period as required by Section 409A of the Code and regulations promulgated guidance issued thereunder, disregard ) after the acceleration in the time effective date of payment termination of Employee's employment for reasons other than death shall be delayed and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy all such delayed payments (ii) above. All determinations required to be made under this Section 5(eor delayed installments) shall be made by a nationally recognized accounting firm that is paid in full in the Company’s outside auditor immediately prior to seventh (7th) month after the event triggering the date of termination, and all subsequent payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm or installments) shall be borne solely paid in accordance with their original payment schedule. To the extent that during the first six (6) months after the effective date of termination, the payment of any premium amounts or other payments to third parties becomes due by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1Bank, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled responsible for paying such amounts directly to the following benefits insurer or other third party and payments upon shall receive reimbursement from Bank for such amounts in the Employee’s termination seventh (7th) month after the effective date of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programstermination.
Appears in 1 contract
Sources: Severance Protection Agreement (Georgia Carolina Bancshares Inc)
Severance Payments. a. Except as provided in Section 5(b), upon (a) From and after the termination consummation of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) Control and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing other provisions of this Section 5(a) and (b)1, the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either an amount equal to the Employee’s then-current base salary for a period of one year (the “Severance Payment”) if (x) the Employee is employed by the Company immediately prior to the consummation of a Change of Control and (y) (i) upon consummation of such Change of Control the full payment Employee is not hired by the Buyer or retained by the Company on substantially similar terms of employment as those enjoyed by the Employee immediately prior to the consummation of such Change of Control, (ii) such lesser amount determined by the Employee’s employment with the Company in accordance with this Section 5(eor the Buyer, as applicable, is terminated without Cause (as defined below) that would result in no portion at any time prior to the first anniversary of the payment being subject consummation of such Change of Control or (iii) the Employee resigns with Good Reason (as defined below) from employment with the Company or the Buyer, as applicable, at any time prior to excise tax under Section 4999 the first anniversary of the Code (consummation of such Change of Control. The Severance Payment shall be made in one lump sum upon the “Excise Tax”), whichever effective date of the foregoing amountstermination of such Employee’s employment with the Company or the Buyer, taking into account as the applicable Federalcase may be.
(b) Notwithstanding anything else to the contrary herein, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reducedif upon termination, the amounts shall be reduced in Employee is a “specified employee” (within the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under meaning attributed thereto by Section 409A of the Code and the regulations promulgated thereunder) of Company, disregard and if the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect payments would be subject to any amount that constitutes the “deferral of compensation” excise tax under Code Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be because such payments are made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments 6-month period commencing upon the Employee’s termination effective date of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earnedtermination, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of then such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any payments shall be delayed for 6 months following such plans or programstermination.
Appears in 1 contract
Sources: Change of Control Agreement (Molecular Insight Pharmaceuticals, Inc.)
Severance Payments. a. Except as provided in Section 5(bIn the event of any termination of the Executive’s employment pursuant to Sections 4(a)(v) (and, for the avoidance of doubt, for reasons that would not constitute Cause pursuant to Sections 4(a)(i)-(iv)), upon 4(b), or 4(c) above, the Company will pay the Executive or otherwise provide, in addition to Final Compensation:
(i) the Base Salary for a period of two (2) years following the date of termination (the “Severance Payments,” and such period, the “Severance Period”);
(ii) one (1) times the Target Bonus, pro-rated for the number of Employeedays during the year in which the Executive’s employment terminates that the Executive was employed by the Company (based upon a 365 day year);
(iii) the number of shares of Stock subject to the Options, unless earlier terminated or forfeited (other than for Cause in connection with such termination of employment) in accordance with the Award or the applicable equity incentive plan and to the extent not otherwise vested, that would have vested during the twelve (12)-month period following the Executive’s termination date had the Executive remained in continuous employment with the Company during such period will become vested as of the Executive’s termination date, with the number of shares of Stock subject to the Options that are then eligible to vest equal to the Available Vesting Amount (as defined in Schedule A to the Award) immediately prior to a Change in Controlsuch termination of employment;
(iv) with respect to each Equity Award other than the Options, the Employee number of shares of Stock subject to such Equity Award, unless earlier terminated or forfeited (other than in connection with such termination of employment) in accordance with the applicable individual award agreement and equity incentive plan governing such Equity Award and to the extent not otherwise vested, that would have vested during the twelve (12)-month period following the Executive’s termination date had the Executive remained in continuous employment with the Company during such period will become vested as of the Executive’s termination date, with the number of shares of Stock subject to the Equity Award that are then eligible to vest equal to the total number of shares of Stock subject to the Equity Award that have vested or are available to vest under the terms of such Equity Award immediately prior to such termination of employment; and
(v) in the event the Executive timely elects to continue the Executive’s coverage and, if applicable, that of the Executive’s eligible dependents in the Company’s group health plans under the federal law known as “COBRA” or similar state law (together, “COBRA”), the Company shall be entitled to an pay the Executive a monthly amount equal to the aggregate monthly COBRA health premiums required to maintain such coverages until the earlier of one times: (iA) the annual rate conclusion of base salary then being paid to the Employee, plus Severance Period and (iiB) the average of date that the past three years short term bonus payExecutive and, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amountif applicable, the “Severance Pay”), which shall Executive’s eligible dependents cease to be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause eligible for such COBRA coverage under applicable law or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company plan terms (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise TaxHealth Continuation Benefits”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Employment Agreement (Cerevel Therapeutics Holdings, Inc.)
Severance Payments. a. Except as provided in Section 5(b), upon (a) If the termination of Employee’s Executive's employment by the Company other than is terminated for Cause prior to a Change in Controlany reason including death, the Employee Executive or spouse of the Executive shall be entitled to an amount equal to receive the aggregate of one times: greater of:
(i) the annual rate of total of:
(A) 24 months' salary at the then applicable base salary rate;
(B) the present value, as determined by the Board, acting reasonably, of the benefits described in section 4(b) that would be enjoyed by the Executive during the consecutive 24 months assuming his employment was not terminated and assuming the then being current level of benefits were continued for those 24 months;
(C) the present value, as determined by the Board, acting reasonably, of the amounts that would have been paid by the Corporation or reimbursed to the Employee, plus Executive pursuant to section 8 during the consecutive 24 months assuming that his employment had not been termination; and
(ii) the average salary otherwise payable to the Executive for the unexpired term of this agreement together with the other amounts described in clause 11 (b)(i), mutatis mutandis, provided that in no case will the Executive receive less than the amount to which he is entitled under the Employment Standards Act (Ontario). The payment described in this subsection 11(b) is the only severance payment the Executive will receive in the event of the past three years short term bonus pay, plus (iii) the Company’s portion termination of 12 months’ premiums under any health, disability and life insurance plan or program this agreement for reasons contemplated in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”this subsection 11(b), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a(b) and subject to the limitation in Section 5(e), if (i) the Employee’s The Executive's employment is terminated by as a result of the Company without Cause permanent disability or by death of the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in ControlExecutive, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date Executive or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)his estate, as applicable, unless (i) Employee signs a release of claims in favor shall be entitled to receive, within 30 days of the Company in a form as prepared by date of such termination, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as balance of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay base salary that would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall otherwise be paid to the Employee in a single lump sum on Executive during the first day remainder of the seventh month after term of this agreement. The Executive agrees to reasonably comply with all requirements necessary for the month in which Corporation to obtain life insurance for the Employee’s separation from service occursterm of this agreement.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b(c) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under this section 11, whenever a payment is to be determined with reference to the remaining term of this agreement, if less than six months remain in the term of this agreement and no party has given notice of its intention not to renew this agreement as contemplated by Section 280G 1, the "remaining term of this agreement" shall include the remainder of the Code and the application then existing term of this Section 5.1, all determination as to present value shall use 120 percent of agreement plus the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeerenewal period.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except 2.1 Provided that Employee has signed the Release attached hereto as provided in Section 5(bExhibit A (the "Release"), the Company shall pay the Employee the payments described in this Section 2.1 (the "Severance Payments") upon the termination of the Employee’s employment 's employment, unless such termination is (a) by the Company for Cause, (b) by reason of death or Disability, or (c) by the Employee without Good Reason. Notwithstanding the foregoing, the Company's obligation to pay Employee the Severance Payments or to provide any other benefit to Employee hereunder shall immediately cease (i) upon Employee's breach of any of the provisions set forth in Section 3 below, or (ii) if Employee revokes or attempts to revoke the Release.
(a) In lieu of any further salary payments to the Employee for periods after the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee (other than for Cause prior to a Change in Controlany such benefit that may accrue under the Company's Stock Option Plan), the Employee Company shall be entitled pay to the Employee, in cash, within thirty (30) days after the first day of each of four consecutive six month periods the first of which shall begin on the first of the month following the Date of Termination, for a total of twenty-four (24) months, an amount equal to 1/2 of the aggregate of one times: (i) the Employee's annual rate of base salary then being paid in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based. In no event shall the total payments made under this Section 2.1(a) be more than 200% of the Employee's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based.
(b) Notwithstanding any provision of any short-term incentive bonus arrangement applicable to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under if any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”"Bonus Plan"), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either a lump sum amount, in cash, equal to the sum of (i) any bonus amount which has been allocated or awarded to the full payment Employee for a completed fiscal year or other measuring period preceding the Date of Termination but has not yet been paid, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent bonus awards to the Employee for all uncompleted periods under the Bonus Plan calculated as to each such lesser amount determined award by assuming the Company in accordance achievement of the target performance level within the performance range established with this Section 5(e) that would result in no respect to such award and basing such pro-rata portion upon the portion of the payment being award period that has elapsed as of the Date of Termination.
(c) For the one-year period starting on the Date of Termination (in the case of an Early Termination), or for the two-year period starting on the Date of Termination (in the case of a Later Termination), as the case may be, the Company shall arrange to provide the Employee with life, disability and accident insurance benefits substantially similar to those which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits if such reduction constitutes Good Reason). For the entire period beginning on the Date of Termination and ending on the earlier of the Employee's death or the Employee's 65th birthday, Company shall arrange to provide the Employee with health insurance benefits substantially similar to those which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits if such reduction constitutes Good Reason). Benefits otherwise receivable by the Employee pursuant to this Section 2.1(c) shall be reduced to the extent comparable benefits are actually received by or made available to the Employee without cost during the above-referenced period. In addition, any such benefits actually received by the Employee shall be reported to the Company by the Employee.
(a) Whether or not the Employee becomes entitled to the Severance Payments, if any of the Total Payments (as defined in subsection (b) below) will be subject to an excise tax under Section 4999 of the Code (the “"Excise Tax”"), whichever the Company shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee, after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 2.2, shall be equal to the excess of the foregoing amountsTotal Payments over the payment provided for by this Section 2.2.
(b) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, taking into account (i) any payments or benefits received or to be received by the applicable FederalEmployee in connection with a Change of Control or the Employee's termination of employment, statewhether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company (the "Total Payments"), shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company's independent auditors and reasonably acceptable to the Employee, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and local employment taxesall "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, income taxesin the opinion of such tax counsel, and such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, results in and (ii) the receipt value of any noncash benefits or any deferred payment or benefit shall be determined by the Employee, on an after-tax basis, Company's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the greatest Code. For purposes of determining the amount of the payment notwithstanding Gross-Up Payment, the Employee 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, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employee's residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
(c) In the event that all the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Employee's employment (or some such other time as is hereinafter described), the Employee shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the payment may be taxable under Section 4999 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 Employee to the extent that such repayment results in a reduction in Excise Tax 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 amounts due under Section are reducedExcise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Employee's employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the amounts Company shall be reduced make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the following order of priority: first, Employee with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in such excess) at the time that the amount of payment such excess is finally determined. The Employee and then disregard the acceleration Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of vesting as a result of a Change in Control and second, liability for Excise Tax with respect to any amount that constitutes the “deferral of compensation” under Section 409A Total Payments. If an Employee who remains in the employ of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only becomes entitled to the extent necessary to satisfy (ii) above. All determinations required to be made under payment provided for by this Section 5(e) paragraph, such payment shall be made by a nationally recognized accounting firm no later than the later of (i) the fifth day following the date on which the Employee notifies the Company that he is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax and (ii) twenty days prior to the “Accounting Firm”). date on which the Excise Tax is initially due.
(d) The payments provided for in this Section 2.2 shall be made as soon as practicable prior to the date that Employee is obligated to pay the Excise tax; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations pay to the Employee on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Employee is clearly entitled and Employeeshall pay the remainder of such payments (together with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined. Notice must be given In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Accounting Firm within 15 Employee, payable on the fifth (5th) business days day after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely demand by the Company. The Accounting Firm’s determinations must be made Company (together with substantial authority (within interest at the meaning of Section 6662 rate provided in section 1274(b)(2)(B) of the Code). For At the purposes of all calculations time that payments are made under Section 280G of the Code and the application of this Section 5.1section, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, provide the Employee shall be entitled to with a written statement setting forth the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights manner in which such payments were calculated and the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any basis for such plans or programscalculations including.
Appears in 1 contract
Sources: Severance Agreement (Viropharma Inc)
Severance Payments. a. Except as provided in Section 5(b), upon 6.1 If (i) the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to is terminated on or within two (2) years following a Change in Control, other than (A) by the Employee shall be entitled to an amount equal to Company for Cause, (B) by reason of death or Disability, or (C) by the aggregate of one times: (i) the annual rate of base salary then being paid to the EmployeeExecutive without Good Reason, plus or (ii) the average of Executive voluntarily terminates his employment for any reason during the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a 30 day period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date anniversary of a Change in Control, then, in either such case, the Company that occurs more than 60 days after shall pay the Termination Date Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date“Severance Payments”), provided and Section 6.2, in addition to any payments and benefits to which the conditions specified in Executive is entitled under Section 5(c) 5 hereof. For purposes of this Agreement, the Executive’s employment shall be deemed to have been satisfied.
b. Notwithstanding Section 5(a) and subject to terminated following a Change in Control by the limitation in Section 5(e)Company without Cause or by the Executive with Good Reason, if (i) the EmployeeExecutive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, or (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee Executive shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay to the Executive, on the first day of the seventh (7th) month following the month in which occurs the Executive’s Separation from Service, a lump sum severance payment, in cash, equal to one and one half (11/2) times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid Executive’s target annual bonus pursuant to Employee any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason. The amount payable pursuant to this Section 6.1(A) shall be in lieu of any cash severance or salary continuation benefit payable to the Executive under any other plan, policy or program of the Company or any of its Affiliates (for which the Executive shall be deemed ineligible if amounts are payable hereunder) or any written employment agreement between the Executive and the Company or any of its Affiliates.
(B) For the 18 month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a lump sum different method (after taking into account the effect of such method on the later calculation of 60th day “parachute payments” pursuant to Section 6.2 hereof), such health and life insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive by another employer during the 18 month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination Date or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason. Notwithstanding anything in this Section 6.1(B) to the closing contrary, with respect to the first six (6) months following the Executive’s Separation from Service, if the premiums payable by the Company for group term life insurance on the event constituting Executive’s life exceeds the Change in Control, provided amount of the conditions specified “limited payments” exemption set forth in Section 5(c1.409A-1(b)(9)(v)(B) have been satisfied.
c. Notwithstanding of the foregoing provisions Income Tax Regulations (or any successor provision thereto), then, to the extent required in order to comply with Code Section 409A, the Executive, in advance, shall pay to the Company an amount equal to the premiums for any such life insurance policy, other than with respect to life insurance coverage to which the Executive would be entitled independent of Section 5(athis Agreement. Promptly following the end of such six (6) and (b)month period, the Company will not be obligated make a cash payment to make any payments the Executive equal to or on behalf the difference between the aggregate amount paid by the Executive for such coverage and the amount that the Executive would have paid for such life insurance coverage if such cost had been determined pursuant to this Section 6.1(B) other than the preceding sentence.
(C) Each option to purchase shares of Employee under Section 5(a) common stock of the Company outstanding as of the Date of Termination shall become fully vested and (b), exercisable as applicable, unless of such date and shall remain exercisable during the shorter of (i) Employee signs a release the remaining term of claims in favor of such option (such remaining term to be determined as if the Company in a form as prepared by the Company (the “Release”Executive were still actively employed) and delivered to Employee no later than five business days after the Termination Date, or (ii) all applicable consideration periods ten (10) years from the date on which the option originally was granted, and rescission periods provided by law with respect each grant of restricted stock or similar grant, the award of which is contingent only upon the continued employment of the Executive to a subsequent date, shall become fully vested as of the Date of Termination.
(D) Unless payable to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with Executive under the terms of this Agreement as of any annual or long-term incentive plan, the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available Company shall pay to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum Executive on the first day of the seventh (7th) month after following the month in which occurs the EmployeeExecutive’s separation Separation from service occursService, a lump sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation (including performance share awards) which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards (including performance share awards) to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level (or if higher, at the then projected actual final level), of the individual and corporate performance goals established with respect to such award, by the fraction obtained by dividing the number of full months and any fractional portion of a month during such performance award period through the Date of Termination by the total number of months contained in such performance award period. Notwithstanding the forgoing, if and to the extent the Executive had elected to defer receipt of any such award, and if the Executive’s deferral election is irrevocable as of the Date of Termination for purposes of Code Section 409A, the amount calculated above shall be credited to the Executive’s account under the applicable deferred compensation plan in lieu of being distributed directly to the Executive.
e. In (E) The benefits then accrued by or payable to the Executive under the Company’s Supplemental Executive Retirement Plan and Pension Parity Plan, or any successor to any such plan, and the benefits then accrued by or payable to the Executive under any other nonqualified plan providing supplemental retirement or deferred compensation benefits shall become fully vested notwithstanding any eligibility conditions that would otherwise apply with respect to such benefits and the benefit, as so vested, will be paid in accordance with the terms of the applicable plan or program. With respect to the Supplemental Executive Retirement Plan and any other nonqualified nonaccount balance plan or portion of a plan providing supplemental retirement or deferred compensation benefits, the Company shall transfer an amount in cash sufficient to pay all benefits then accrued by or payable to the Executive under the terms of such plans into an irrevocable grantor trust (a so-called “Rabbi Trust”) whose trustee shall be an entity unaffiliated with and independent of the Company, which trust shall be required to pay such benefits in accordance with and subject to the applicable terms of each plan (as modified by this Agreement) and the trust instrument; provided that if such transfer to the Rabbi Trust would be treated, under Code Sections 83 and 409A(b), as a taxable transfer to the Executive, such transfer to the Rabbi Trust shall not be made until such time as the transfer will not be treated as a taxable event under Code Sections 83 and 409A; and provided further, that any amendment or termination of any such plan on or after the Change in Control date the effect of which would be to reduce or eliminate the benefit payable to the Executive shall be disregarded.
(F) The Company shall reimburse the Executive for expenses incurred for outplacement services suitable to the Executive’s position for a period of two (2) years following the Executive’s Separation from Service, (or, if earlier, until the first acceptance by the Executive of an offer of employment) in an amount not exceeding 25% of the sum of the Executive’s annual base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstances constituting Good Reason, and target annual bonus pursuant to any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason.
(G) For the six (6) month period immediately following the Date of Termination, the Company shall provide the Executive with the use of any Company provided automobile on the same terms and conditions that were applicable immediately prior to the Date of Termination or, if more favorable, immediately prior to the first occurrence of an event or circumstance constituting Good Reason. The Executive’s right to use a Company provided automobile cannot be exchanged for cash or another benefit.
(A) Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under Executive in connection with a Change in Control or the termination of the Executive’s employment (whether pursuant to the terms of this Agreement would or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, including the Severance Payments, being hereinafter called “Total Payments”) would be subject (in whole or a portion part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of such payment being subject to excise tax under Section 4999 section 280G of the CodeCode in such other plan, then arrangement or agreement, the amounts due under Section 5(b) that cash Severance Payments shall first be reduced, and the Company noncash Severance Payments shall pay thereafter be reduced, to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent necessary so that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that Total Payments is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax but only if
(A) the “Accounting Firm”net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments). The Company shall cause ; provided, however, that the Accounting Firm to provide detailed supporting calculations of its determinations Executive may elect to the Company extent that such election (and Employee. Notice must be given the right to such election) does not result in adverse tax consequences to the Accounting Firm within 15 business days after an event entitling Employee Executive under Code Section 409A, to an amount due under this Agreement. All fees and expenses have the noncash Severance Payments reduced (or eliminated) prior to any reduction of the Accounting Firm cash Severance Payments.
(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G section 280G(b) of the Code and the application of this Section 5.1shall be taken into account, all determination as to present value shall use 120 percent (ii) no portion of the applicable Federal rate Total Payments shall be taken into account which, in the opinion of tax counsel (determined under Section 1274(d“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm (the “Auditor”) which was, immediately prior to the Change in Control, the Company’s independent auditor (A) does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) compounded based on or (B) constitutes reasonable compensation for services actually rendered, within the nature meaning of section 280G(b)(4)(B) of the paymentCode, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment excess of the Employee’s base salary and any other form or type of compensation earnedBase Amount allocable to such reasonable compensation, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights value of any non-cash benefit or any deferred payment or benefit included in which the Employee is vested on Total Payments shall be determined by the Date of Termination, Auditor in accordance with the terms principles of sections 280G(d)(3) and (4) of the Code.
(C) At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).
6.3 The payments provided in subsections (A) and (D) of Section 6.1 hereof shall be made on the first day of the seventh (7th) month following the month in which occurs the Executive’s Separation from Service. At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).
6.4 The Company also shall reimburse the Executive for all awards under legal fees and expenses incurred by the Executive in disputing in good faith any Company stock purchase and stock incentive plans issue hereunder relating to the termination of the Executive’s employment, in seeking in good faith to obtain or programs, enforce any benefit or right provided by this Agreement or in connection with any successor tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five business days after delivery of the Executive’s written requests for payment accompanied with such plans or programs.evidence of fees and expenses incurred as the Company reasonably may require; provided that no reimbursement pursuant to this Section 6.4 shall be made later than the end of the ca
Appears in 1 contract
Severance Payments. a. Except 6.1. Subject to Section 6.2 and Section 6.3 hereof, if the Executive has a Separation from Service following a Change in Control and during the Term either by the Company or by the Executive, other than (a) by the Company for Cause, (b) by reason of death or Disability, or (c) by the Executive without Good Reason (any such Separation from Service being hereafter sometimes referred to as a “Compensable Termination”), then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”) and Section 6.4, in addition to any payments and benefits to which the Executive is entitled under Sections 5 and 6.3 hereof. Notwithstanding the foregoing, the Executive shall not be eligible to receive any payment or benefit provided for in this Section 6.1 or Section 6.4 unless the Executive shall have executed a release substantially in the form of Exhibit A hereto effective as of the date of the Compensable Termination or a date subsequent thereto and shall not have revoked said release. No later than the latest date for payment provided for in Section 6.2, the Executive must have properly executed the release and returned it to the Company, and such release must have become fully effective and irrevocable. If that condition is not met, the Executive shall not be entitled at any time to any payment or benefit provided for in this Section 6.1 or Section 6.4. The Severance Payments and benefits provided in Section 5(b), upon the termination 6.4 are in lieu of Employee’s employment by any severance benefits that would otherwise be payable or provided pursuant to any severance plan or practice of the Company other than for Cause prior those payments and benefits to a Change in Control, which the Employee shall be Executive is entitled to an amount equal to the aggregate of one times: under Sections 5 and 6.3 hereof.
(i) The Company shall pay the annual rate Executive, at the time provided in Section 6.2 below, a lump sum cash payment equal to two (2) times the full amount of base salary then being paid to the EmployeeExecutive’s target bonus (as determined by the Company’s Officers’ Performance Compensation Plan, plus management incentive program or similar plan, as the case may be) for the fiscal year of the Company in which the Compensable Termination occurs.
(ii) The Company shall pay the average of Executive, at the past three years short term bonus paytime provided in Section 6.2 below, plus a lump sum cash payment equal to two (iii2) times the CompanyExecutive’s portion of 12 months’ premiums under any health, disability and life insurance plan or program annual base salary at the rate in which the Employee was entitled to participate effect immediately prior to the Compensable Termination Date or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (the aggregated amount, the “Severance PayBase Salary”), which shall be paid .
(iii) The Company will pay the Executive for all earned but unused vacation leave at the time of the Compensable Termination.
(iv) Reimbursement of any unreimbursed business expenses incurred prior to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 Compensable Termination.
6.2. All payments to be made pursuant to subsections (i) through (iv) of Section 6.1 above shall be made within thirty (30) calendar days after the date on which a Compensable Termination Date (and including any installment occurs. It is the intention of the parties that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject payments pursuant to the limitation in Section 5(e), if subsection (i) through (iv) of Section 6.1 above meet the Employee’s employment is terminated by “short-term deferral” exception under Section 409A of the Company without Cause Code and the Treasury Regulations; and the parties shall interpret this Agreement accordingly.
6.3. In the event that the severance and other benefits provided for in this Agreement or by otherwise payable to Executive (i) constitute “parachute payments” within the Employee for Good Reasonmeaning of Section 280G of the Code, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall would be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect subject to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined imposed by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), then Executive’s benefits under this Agreement shall be either
(i) delivered in full, or
(ii) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable Federalfederal, state, state and local employment taxes, income taxes, taxes and the Excise Tax, results in the receipt by the Employee, Executive on an after-tax basis, of the greatest amount of the payment benefits, notwithstanding that all or some portion of the payment such benefits may be taxable under Section 4999 of the Code. In the event the amounts due under Section If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are reduceddelivered to a lesser extent, the amounts shall be reduced reduction will occur in the following order order: reduction of priority: firstcash payments, with respect cancellation of equity awards granted within the twelve (12) month period prior to a “change in control” (as determined under Code Section 280G) that are deemed to have been granted contingent upon the change in control (as determined under Code Section 280G), cancellation of accelerated vesting of equity awards, reduction of employee benefits. Unless the Company and Executive otherwise agree in writing, any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations determination required to be made under this Section 5(e) shall be made in writing by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax independent public accountants (the “Accounting FirmAccountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall cause bear all costs the Accounting Firm Accountants may reasonably incur in connection with any calculations contemplated by this Section.
6.4. Executive shall be entitled, at the Company’s expense, to provide detailed supporting calculations twenty four (24) months of its determinations such medical, dental, hospitalization, life insurance, pension plan, profit-sharing, disability, employee benefits and such other similar employment privileges and benefits or perquisites as are afforded generally from time to time to other senior officers of the Company from and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses Executive’s termination of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment a subsidiary of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsCompany.
Appears in 1 contract
Sources: Change in Control Agreement (Meridian Bioscience Inc)
Severance Payments. a. Except as provided in Section 5(b)If, upon during the termination of Employee’s Term, the Company, MVB or PMG terminate your employment by the Company for any reason other than Cause, or you terminate your employment for Cause prior Good Reason, or your employment is terminated due to a Change in Controlyour death or Disability, the Employee you shall be entitled to receive the applicable payments and benefit coverage described in this Section 7 (the "Severance Payments”).
(a) If, during the Term, the Company, MVB or PMG terminate your employment for any reason (other than for Cause) or you terminate your employment for Good Reason, you shall be entitled to receive an amount (less deductions required by law) equal to the aggregate eighteen months of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion sum of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months your W-2 from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments PMG for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Codeimmediately previous two fiscal years. In the event the amounts due under Section are reducedtermination without Cause or for Good Reason occurs prior to the expiration of two fiscal years with PMG, the amounts then it shall be reduced in based upon the following order of priority: firstimmediately previous fiscal year W-2 from PMG, with respect to any amount plus the K-1 you received from PMG for the year prior, or if the first fiscal year has not been completed, it shall be based on your K-1 that does not constitute you received from PMG for the “deferral of compensation” under Section 409A of years 2011 and 2012. In addition, all restrictions on the Code Company stock that you own shall be removed, and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting all stock options shall immediately vest.
(b) If your employment terminates as a result of a Change you electing not to renew, but the Company, MVB or PMG electing renewal, or you and the Company, MVB and PMG all electing non-renewal, in Control accordance with Section 2, the parties shall continue this Agreement in full force through the full contract period currently in effect, but shall have no further obligations thereafter, other than as explicitly provided for in this Agreement. However, if you elect to exercise one or more years of your three year option period, and secondthe Company, with respect MVB or PMG reject your election of any of those three years of options, then the Company, MVB and PMG have the option of either 1) paying you as if your termination was without Cause for purposes of this Agreement, and you shall also adhere to any amount that constitutes the “deferral of compensation” under provisions set forth in Section 409A 10; or 2) not paying you after the expiration of the Code term of this Agreement (except as set forth in this Section), and regulations promulgated thereunder, disregard the acceleration provisions in the time of payment and then disregard the acceleration of vesting Section 10 shall not apply.
(c) If your employment terminates as a result of a Change in Control first with respect your death or Disability and this Agreement has not otherwise been terminated pursuant to Company funded amounts and then any other provision, you or your beneficiary, personal or legal representatives or estate, as the Employee’s deferralscase may be, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made entitled to receive an amount (less deductions required by a nationally recognized accounting firm that is law) equal to your W-2 for the Company’s outside auditor fiscal year immediately prior to the fiscal year in which you die or are Disabled, for a period of one year following the effective date of your termination based upon death or Disability. In the event triggering such death or Disability occurs within the payments that are subject first year of the Term, the amount shall be determined by your K-1 received from PMG for the year prior to the Excise Tax (effective year of your termination. In addition, for the “Accounting Firm”)first three years from the Effective Date, the Company, MVB and PMG shall provide disability and life insurance to you in sufficient amounts to be able to cover a minimum of two and a half times your Base Compensation. The Company After the third year and for the remainder of the Agreement Term, the Company, MVB and PMG shall cause the Accounting Firm to provide detailed supporting calculations of its determinations disability and life insurance consistent with what is provided to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses highest level executives of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code , MVB and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the EmployeePMG.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided Following a Change in Section 5(b)Control of the Company, upon if, ------------------ during the termination of Employee’s employment by the Company other than for Cause prior to a thirty-six (36) months following such Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment Executive is terminated by the Company without Cause or by (ii) Executive terminates employment with the Employee Company (or its successor or assigns) for Good Reason, the Company shall pay and provide Executive each of the following:
(a) Within five (5) business days after the effective date of any such termination of employment (the "Effective Date"), the Company (or its successor or assigns) will pay Executive a lump sum cash payment equal to one (1) times the average annual compensation that was includible in Executive's gross income during each of the lesser of (i) the five (5) full fiscal years immediately prior to the Effective Date and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee number of years Executive was employed by the Company immediately prior to the Effective Date.
(b) Executive and her dependents shall continue to be covered for twelve (12) months after the Effective Date by all survivor rights, insurance and benefit programs of the Company (or its successor or assigns) in a lump sum on type and amount at least equivalent to that provided to she and her dependents by the later of 60th day following the Termination Date or the closing on the event constituting Company immediately prior to the Change of Control; provided that if participation in Control, provided any one or more of such arrangements is not possible under the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)terms thereof, the Company (or its successor or assigns) will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor provide substantially identical benefits outside of the Company in a form as prepared programs. The cost of this coverage will be paid by the Company (the “Release”or its successor or assigns).
(c) and delivered to Employee no later than five business days after the Termination Date, (ii) If all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as or any portion of the dates of amounts payable to Executive under this Agreement, either alone or together with other payments which Executive has the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available right to receive from the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee constitute "excess parachute payments" (within the meaning of section 409A Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid that are subject to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined imposed by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”or similar tax and/or assessment), whichever the Company (or its successor or assigns) shall increase the amounts payable pursuant to Section 6(a) above to the extent necessary to place Executive in the same after-tax position as she would have been in had no such excise tax been imposed on the payments hereunder. The determination of the foregoing amountsamount of any such excise taxes shall initially be made by the independent accounting firm employed by the Company immediately prior to the Change in Control. If, taking into account at a later date, it is determined that the applicable Federalamount of excise taxes payable by Executive is greater than the amount initially so determined, state, and local employment then the Company (or its successor or assigns) shall pay Executive an amount equal to the sum of (i) such additional excise taxes, income taxes(ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other taxes payable by Executive with respect to the amount specified in (i) and (ii) above, and the Excise Tax, results in reimbursement provided by this (iii). Upon the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result occurrence of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunderCompany, disregard if, during the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a six (6) months following such Change in Control first with respect to Company funded amounts and then the Employee’s deferralsControl, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s Executive terminates employment with the Company is terminated by the Company for Cause (or for any reason not covered by Section 5(aits successor or assigns) or 5(b)without Good Reason, then within five (5) business days after the Effective Date, the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through Executive an amount equal to thirty percent (30%) of the Termination Date.
g. In addition to the benefits otherwise provided amount described in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i6(a) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsabove.
Appears in 1 contract
Sources: Executive Employment Agreement (Amserv Healthcare Inc)
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal Subject to the aggregate provisions of one times: subsection (d) below and the other terms and conditions of this Letter Agreement, in the event (i) the annual rate of base salary then being paid to Company terminates the Employee, plus Executive’s employment without “cause” (ii) within twelve months after a Change of Control (as defined above), the average of the past three years short term bonus pay, plus Executive terminates his employment with “good reason” or (iii) the CompanyExecutive’s portion employment terminates as a result of 12 months’ premiums under the Executive’s death or disability (any health, disability and life insurance plan or program in which of the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the foregoing being a “Severance PayTermination”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not provide the Executive the following benefits, which shall be obligated to make any the only severance benefits or other payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If EmployeeExecutive’s employment with the Company is terminated by to which the Executive shall be entitled. Without limiting the generality of the foregoing, these benefits, together with those set forth in Section 12 below, are in lieu of all salary and bonuses for periods ending on the date of termination, accrued vacation and other rights the Executive may have against the Company for Cause or for any reason not covered by Section 5(aits affiliates.
(a) or 5(b)After a Severance Termination, then the Company shall pay Executive will receive payment of an amount equal to Employee only one month of his base salary and any accrued but unused vacation or PTO earned through in effect at the time of the Severance Termination Datefor a period of twelve months.
g. In addition (b) Upon a Severance Termination, the Executive shall be able to exercise any options which have vested on or before the benefits otherwise provided termination date until the later of (a) the 5th anniversary of the Approval Date as set forth in Section 54 herein or; (b) the third anniversary of the date of termination.
(c) Upon a Severance Termination, the Employee shall Executive will receive continued coverage under the Company’s medical and health plans in accordance with COBRA rules and regulations following the termination date (including any period as may be entitled required by law), provided that coverage will end if the Executive obtains comparable coverage from a subsequent employer or otherwise ceases to the following be eligible for COBRA benefits.
(d) All compensation and benefits and payments described above in (a) through (c) of this Section 11 will be contingent upon the Employee’s termination of employment: (i) the payment Executive’s execution of a waiver and release of all claims against the Company substantially in the form as approved by the OXIS Board of Directors (however, such waiver and release form shall not materially modify or alter the terms of this Letter Agreement, nor shall such form place any conditions, restrictions or approvals, such as Board approvals or otherwise, on Executive’s right to receive any benefit of any sort pursuant to this Letter Agreement) and expiration of the Employee’s base salary and any other form or type of compensation earnedseven-day revocation period referred to in the release, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination Executive’s not engaging in accordance any competition with the terms under Company during the period of his employment by the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right Executive’s “not engaging in any solicitation” during the period of his employment by the Company.
(e) In this letter, the term “cause” means (a) the Executive’s failure to exercise adhere to any written policy of the Company if the Executive has been given a reasonable opportunity to comply with such policy and cure the Executive’s failure to receive all rights in comply (which reasonable opportunity to cure must be granted for a period of ten days); (b) the Employee is vested on willful and continued failure by the Date Executive, if not cured within ten (10) days after receipt by the Executive of Terminationwritten notice from the Company reasonably detailing the matters to be cured, in accordance to substantially perform his material duties and responsibilities with the terms Company under this Agreement as directed by the Board of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to Directors (other than any such plans failure resulting from his incapacity due to physical or programs.mental illness), (c) the Executive’s appropriation (or attempted appropriation) of a business opportunity of the Company, including attempting to secure or securing any personal profit in connection
Appears in 1 contract
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the “Severance Payments”) upon the termination of the Employee’s employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated by the Employer without Cause prior to following a Change in Control or by the Employee with Good Reason following a Change in Control, as the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e)case may be, if (i) the Employee’s employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (ii) the Employee terminates his employment with Good Reason prior to a Change in Control and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Employee’s employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to two (2) times the sum of (i) the higher of the Employee’s Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or the Employee’s Base Salary in effect immediately prior to the Change in Control, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, higher of (x) the annual Bonus earned by the Employee shall receive 2.99 times in respect of the Severance Pay calculated Employer’s fiscal year immediately preceding that in accordance with Section 5(a)which the Date of Termination occurs, (y) the average annual Bonus so earned in respect of the three fiscal years immediately preceding that in which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in ControlControl occurs, provided or (z) $185,750. Of the conditions specified foregoing payments, one-half of such payments shall be in consideration of and allocated to Employee’s obligations under Section 5(c) have been satisfied13.2.
c. Notwithstanding (B) For 18 months after the foregoing provisions Employee’s Date of Section 5(a) and (b)Termination, the Company will maintain in full force and effect, for the Employee’s continued benefit (and that of all family members and other dependents who were enrolled in the programs on the Employee’s Date of Termination) all life, medical and dental insurance programs in which the Employee (and members of the Employee’s family or other dependents) were participating or by which such individuals were covered immediately before the Employee’s Date of Termination. If the terms of any of such programs do not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)allow the continued participation described in the preceding sentence, as applicable, unless the Company will: (i) Employee signs a release provide benefits that are substantially similar (including eligibility conditions, conditions on benefits, the value of claims benefits and the scope of coverage) to those provided by the life, medical and dental insurance programs in favor which the Employee, members of the Company in a form as prepared by Employee’s family and dependents were participating immediately before the Company (the “Release”) Employee’s Date of Termination; and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods ensure that any eligibility or other conditions on benefits under these programs, including deductibles and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Releaseco-payments, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when administered by applying the Employee’s termination of employment occurs, experience under any predecessor program in which the Employee is a specified employee within the meaning (and members of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay family and dependents) were participating before Termination. With respect to this Section 10.1(B), any benefits or payments for relating to medical and dental insurance that are provided after completion of the first six months following separation from service applicable continuation period permitted under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended, and any benefits or payments relating to life insurance shall be paid subject to the following: (A) the amount of expenses eligible for reimbursement or the benefits or payments provided during any taxable year of the Employee may not affect the expenses eligible for reimbursement or the benefits or payments to be provided to the Employee in a single lump sum any other taxable year; (B) reimbursement of any eligible expense must be made on or before the first last day of the seventh month after Employee’s taxable year following the month taxable year in which the Employee’s separation from service occurs.
e. In expense was incurred; and (C) the event right to reimbursement or to such benefits or payments is not subject to liquidation or exchange for another benefit. To the extent that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee extended under this Agreement Section 10.1(B) would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by taxable compensation for the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to solely responsible for any such plans or programstaxes.
Appears in 1 contract
Severance Payments. a. Except (a) If ▇▇▇▇ is (x) terminated without Cause (as defined in section 4(c) below) or (y) terminates as a result of a Triggering Event (as defined in section 4(b) below) after a Change of Control (as defined in section 4(a) below), then ▇▇▇▇ will be entitled to receive in satisfaction of all obligations (other than as provided in section 2 above) that the Company may have to ▇▇▇▇: (i) in the case of clause (x) hereof, severance compensation equal to one year of her base salary then in effect; or in the case of clause (y) hereof, severance compensation equal to two years of her base salary plus her maximum potential bonus amount for two years; in either case, less applicable taxes and withholding paid in a lump sum on the 60th day following ▇▇▇▇’▇ termination of employment; and, if needed by ▇▇▇▇, (ii) her then-current health insurance coverage, at the then current employee cost, during the twelve (12) month period following a termination in the case of clause (x); or during the twenty-four (24) month period following a resignation in the case of clause (y). Such benefits will be provided for the twelve (12) month or twenty-four (24) month period, as applicable, following the date of ▇▇▇▇’▇ termination. In addition, in the event that ▇▇▇▇ is terminated without Cause, the vesting of 100% of all stock options, stock appreciation rights, restricted stock units and any other equity awards granted to ▇▇▇▇ under the Company’s equity incentive plans that as of the date of such termination remain unvested shall accelerate, to the extent permissible by law, notwithstanding and in addition to any existing vesting provisions set forth in the applicable equity award agreement and/or the Company equity incentive plan. The receipt of the foregoing severance compensation, health insurance coverage and acceleration of vesting pursuant to this section 3 will be subject to ▇▇▇▇ signing and not revoking a release of claims agreement in a form reasonably acceptable to the Company, and such release becoming effective within forty-five (45) days of ▇▇▇▇’▇ termination and not thereafter being revoked. To the extent that any of the health insurance benefits provided under this section 3(a) would result in unintended tax consequences under Code Section 5(b105(h) or its analog in the Patient Protection and Affordable Care Act of 2010, Company shall in lieu of providing such benefits provide ▇▇▇▇ with a lump sum payment equal to twelve (12) or twenty-four (24) months of COBRA continuation coverage on the 55th day following ▇▇▇▇’▇ termination of employment.
(b) For the sake of clarity, no severance benefit that is paid on account of ▇▇▇▇’▇ termination of employment will be paid unless and until ▇▇▇▇ incurs a “separation from service” under the default rules of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding any other provision of this Agreement to the contrary, if ▇▇▇▇ is a “specified employee” within the meaning of Section 409A of the Code and the related guidance (“Section 409A”) at the time of ▇▇▇▇’▇ separation from service, then only that portion of the severance and benefits set forth in section 3(a) above, together with any other severance payments or benefits, that may be considered deferred compensation under Section 409A, which (when considered together) do not exceed the Section 409A Limit (as defined below) and which qualify as separation pay under Treasury Regulation Section 1.409A-1(b)(9)(iii), upon may be paid within the termination of Employee’s employment by first six (6) months following ▇▇▇▇’▇ separation from service in accordance with section 3(a) above or (for payments or benefits not provided under this Agreement) with the Company payment schedule applicable to each such other than for Cause prior to a Change in Controlpayment or benefit. Otherwise, the Employee shall portion of the severance and benefits provided under this Agreement, together with any other severance payments or benefits that may be entitled considered deferred compensation under Section 409A, that would otherwise be payable within the six (6) month period following ▇▇▇▇’▇ separation from service will accrue during such six (6) month period and will be paid in a lump sum on the date six (6) months and one (1) day following the date of ▇▇▇▇’▇ separation from service (or the next business day if such date is not business day). All remaining severance payments and benefits will be payable in accordance with the payment schedule applicable to an amount equal to such payments or benefits. For purposes of this Agreement, “Section 409A Limit” means the aggregate lesser of one two (2) times: (i) the sum of ▇▇▇▇’▇ annualized compensation based upon the annual rate of base salary then being paid pay for services provided to the Employee, plus Company for the taxable year of ▇▇▇▇ preceding the taxable year of ▇▇▇▇’▇ separation from service from the Company as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any related Internal Revenue Service guidance; or (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums maximum amount that may be taken into account under any health, disability and life insurance a qualified plan or program in which the Employee was entitled pursuant to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i401(a)(17) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month year in which the Employee’s such separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Severance and Change of Control Agreement (Kratos Defense & Security Solutions, Inc.)
Severance Payments. a. Except as provided in Section 5(b), upon 6.1 If (i) the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to is terminated following a Change in Control and within two (2) years after a Change in Control, other than (A) by the Employee shall be entitled to an amount equal to Company for Cause, (B) by reason of death or Disability, or (C) by the aggregate of one times: (i) the annual rate of base salary then being paid to the EmployeeExecutive without Good Reason, plus or (ii) the average of Executive voluntarily terminates her employment for any reason during the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a 30 day period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date anniversary of a Change in Control, then, in either such case, the Company that occurs more than 60 days after shall pay the Termination Date Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date“Severance Payments”), provided and Section 6.2, in addition to any payments and benefits to which the conditions specified in Executive is entitled under Section 5(c) 5 hereof. For purposes of this Agreement, the Executive’s employment shall be deemed to have been satisfied.
b. Notwithstanding Section 5(a) and subject to terminated following a Change in Control by the limitation in Section 5(e)Company without Cause or by the Executive with Good Reason, if (i) the EmployeeExecutive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control, or (ii) the Executive terminates her employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee Executive shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay to the Executive, on the first day of the seventh (7th) month following the month in which occurs the Executive’s Separation from Service, a lump sum severance payment, in cash, equal to one and one half (11/2) times the sum of (i) the Executive’s base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid Executive’s target annual bonus pursuant to Employee any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason. The amount payable pursuant to this Section 6.1(A) shall be reduced by the amount of any cash severance or salary continuation benefit paid or payable to the Executive under any other plan, policy or program of the Company or any of its Affiliates or any written employment agreement between the Executive and the Company or any of its Affiliates.
(B) For the 18 month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and her dependents life, accident and health insurance benefits substantially similar to those provided to the Executive and her dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and her dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that, unless the Executive consents to a lump sum different method (after taking into account the effect of such method on the later calculation of 60th day “parachute payments” pursuant to Section 6.2 hereof), such health and life insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the 18 month period following the Executive’s termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination Date or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason. Notwithstanding anything in this Section 6.1(B) to the closing contrary, with respect to the first six (6) months following the Executive’s Separation from Service, if the premiums payable by the Company for group term life insurance on the event constituting Executive’s life exceeds the Change in Control, provided amount of the conditions specified “limited payments” exemption set forth in Section 5(c1.409A-1(b)(9)(v)(B) have been satisfied.
c. Notwithstanding of the foregoing provisions Income Tax Regulations (or any successor provision thereto), then, to the extent required in order to comply with Code Section 409A, the Executive, in advance, shall pay to the Company an amount equal to the premiums for any such life insurance policy, other than with respect to life insurance coverage to which the Executive would be entitled independent of Section 5(athis Agreement. Promptly following the end of such six (6) and (b)month period, the Company will not be obligated make a cash payment to make any payments the Executive equal to or on behalf the difference between the aggregate amount paid by the Executive for such coverage and the amount that the Executive would have paid for such life insurance coverage if such cost had been determined pursuant to this Section 6.1(B) other than the preceding sentence.
(C) Each option to purchase shares of Employee under Section 5(a) common stock of the Company outstanding as of the Date of Termination shall become fully vested and (b), exercisable as applicable, unless of such date and shall remain exercisable during the shorter of (i) Employee signs a release the remaining term of claims in favor of such option (such remaining term to be determined as if the Company in a form as prepared by the Company (the “Release”Executive were still actively employed) and delivered to Employee no later than five business days after the Termination Date, or (ii) all applicable consideration periods ten (10) years from the date on which the option originally was granted, and rescission periods provided by law with respect each grant of restricted stock or similar grant, the award of which is contingent only upon the continued employment of the Executive to a subsequent date, shall become fully vested as of the Date of Termination.
(D) Unless payable to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with Executive under the terms of this Agreement as of any annual or long-term incentive plan, the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available Company shall pay to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum Executive on the first day of the seventh (7th) month after following the month in which occurs the EmployeeExecutive’s separation Separation from service occursService, a lump sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation (including performance share awards) which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date, and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent incentive compensation awards (including performance share awards) to the Executive for all then uncompleted periods under any such plan, calculated as to each such award by multiplying the award that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level (or if higher, at the then projected actual final level), of the individual and corporate performance goals established with respect to such award, by the fraction obtained by dividing the number of full months and any fractional portion of a month during such performance award period through the Date of Termination by the total number of months contained in such performance award period. Notwithstanding the forgoing, if and to the extent the Executive had elected to defer receipt of any such award, and if the Executive’s deferral election is irrevocable as of the Date of Termination for purposes of Code Section 409A, the amount calculated above shall be credited to the Executive’s account under the applicable deferred compensation plan in lieu of being distributed directly to the Executive.
e. In (E) The benefits then accrued by or payable to the Executive under the Company’s Supplemental Executive Retirement Plan, Executive Separation Allowance Plan, Deferred Compensation Plan, Pension Parity Plan, or any successor to any such plan, and the benefits then accrued by or payable to the Executive under any other nonqualified plan providing supplemental retirement or deferred compensation benefits shall become fully vested notwithstanding any eligibility conditions that would otherwise apply with respect to such benefits and the benefit, as so vested, will be paid in accordance with the terms of the applicable plan or program; provided that if the Executive has not attained fifty-five (55) years of age, the Executive’s benefit under the Executive Separation Allowance Plan will commence to be paid upon the Executive’s attainment of age fifty-five (55). With respect to the Supplemental Executive Retirement Plan, Executive Separation Allowance Plan, and any other nonqualified nonaccount balance plan or portion of a plan providing supplemental retirement or deferred compensation benefits, the Company shall transfer an amount in cash sufficient to pay all benefits then accrued by or payable to the Executive under the terms of such plans into an irrevocable grantor trust (a so-called “Rabbi Trust”) whose trustee shall be an entity unaffiliated with and independent of the Company, which trust shall be required to pay such benefits in accordance with and subject to the applicable terms of each plan (as modified by this Agreement) and the trust instrument; provided that if such transfer to the Rabbi Trust would be treated, under Code Sections 83 and 409A(b), as a taxable transfer to the Executive, such transfer to the Rabbi Trust shall not be made until such time as the transfer will not be treated as a taxable event under Code Sections 83 and 409A; and provided further, that any amendment or termination of any such plan on or after the Change in Control date the effect of which would be to reduce or eliminate the benefit payable to the Executive shall be disregarded.
(F) The Company shall reimburse the Executive for expenses incurred for outplacement services suitable to the Executive’s position for a period of two (2) years following the Executive’s Separation from Service, (or, if earlier, until the first acceptance by the Executive of an offer of employment) in an amount not exceeding 25% of the sum of the Executive’s annual base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstances constituting Good Reason, and target annual bonus pursuant to any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or circumstance constituting Good Reason.
(G) For the six (6) month period immediately following the Date of Termination, the Company shall provide the Executive with the use of any Company provided automobile on the same terms and conditions that were applicable immediately prior to the Date of Termination or, if more favorable, immediately prior to the first occurrence of an event or circumstance constituting Good Reason. The Executive’s right to use a Company provided automobile cannot be exchanged for cash or another benefit.
(A) Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under Executive in connection with a Change in Control or the termination of the Executive’s employment (whether pursuant to the terms of this Agreement would or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, including the Severance Payments, being hereinafter called “Total Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement, the cash Severance Payments shall first be reduced, and the noncash Severance Payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments); provided, however, that the Executive may elect to have the noncash Severance Payments reduced (or eliminated) prior to any reduction of the cash Severance Payments.
(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm (the “Auditor”) which was, immediately prior to the Change in Control, the Company’s independent auditor, does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such payment being subject to excise tax under Section 4999 Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, then in excess of the amounts due Base Amount allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
(C) At the time that payments are made under Section 5(b) that this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). If the Executive objects to the Company’s calculations, the Company shall pay to the Employee shall be either (i) the full payment or (ii) Executive such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject Severance Payments (up to excise tax under 100% thereof) as the Executive determines is necessary to result in the proper application of subsection (A) of this Section 4999 6.2.
6.3 The payments provided in subsections (A) and (D) of Section 6.1 hereof shall be made on the first day of the Code seventh (7th) month following the “Excise Tax”), whichever of month in which occurs the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the CodeExecutive’s Separation from Service. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in At the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be payments are made under this Section 5(e) Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior attached to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”statement). .
6.4 The Company also shall cause reimburse the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All Executive for all legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder relating to the termination of the Accounting Firm shall be borne solely by the Company. The Accounting FirmExecutive’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under seeking in good faith to obtain or enforce any Company stock purchase and stock incentive plans benefit or programs, or any successor to any such plans or programs.right pr
Appears in 1 contract
Severance Payments. a. Except (a) In the event that Employee's employment is terminated by (i) the Company while this Agreement is in effect without Good Cause as provided defined in Section 5(bSections 8(c)(1), upon the termination of Employee’s employment (2) or (3) hereof, (ii) by the Company other for Good Cause as defined in Section 8(c)(4) hereof, (iii) because the Company terminates the Employment Period pursuant to Section 2 of this Employment Agreement, (iv) by reason of incapacity or disability in accordance with Section 4, or (v) by reason of death in accordance with Section 5:
(1) The Company shall pay to Employee or his estate, no later than for Cause prior to a Change in Controlthirty (30) calendar days after such Termination Date, the Employee shall be entitled to an amount equal to any unpaid current Annual Base Salary accrued through the aggregate Termination Date, his bonus, calculated at one hundred percent (100%) of one times: (i) his Annual Base Salary prorated for the annual rate of base salary then being paid to current fiscal year through the EmployeeTermination Date, plus one (ii1) times the average sum of the past three years short term bonus payhis then current Annual Base Salary and bonus, plus calculated at one hundred percent (iii100%) the Company’s portion of 12 months’ premiums under any healthhis Annual Base Salary. The Company shall continue to keep in full force and effect all plans or policies of medical, disability accident and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid benefits with respect to Employee by and his dependents with the Company over same level of coverage available to employees under the terms of those employee benefit plans for a period of 12 months from twelve (12) months, upon the same terms, costs and otherwise to the same extent as such plans are in effect for employees of the Company who were similarly situated to Employee as of the Termination Date in accordance with Date.
(2) All restricted shares previously awarded to Employee but not yet vested shall become vested and non-forfeitable as of the Company’s regular payroll cycleTermination Date.
(3) To the extent stock options granted to Employee have not become fully vested and exercisable as of the Termination Date, such options shall become fully vested and all vested stock options shall be exercisable for two (2) years commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a(b) and subject to In the limitation in Section 5(e), if (i) the event that Employee’s 's employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change Cause as defined in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(aSections 8(c)(1), which (2) or (3):
(1) The Company shall be paid pay to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in ControlEmployee, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business thirty (30) calendar days after the Termination Date, an amount equal to his then current Annual Base Salary accrued but unpaid through the Termination Date; and Employee shall have a period of ninety (ii90) all applicable consideration periods and rescission periods provided by law with respect days after such Termination Date in which to exercise any exercisable vested stock options, subject to the Release provisions of any applicable stock option agreement.
(2) Any restricted shares or stock options previously granted but still subject to restriction or unvested at the Termination Date shall be forfeited.
(c) Good Cause shall mean the Company's Board has determined in good faith, without being bound by the Company's progressive discipline policy for employees:
(1) that Employee has engaged in acts or omissions against the Company or any of its subsidiaries constituting dishonesty, intentional breach of fiduciary obligation or intentional wrongdoing or misfeasance; or
(2) that Employee has been arrested or indicted in a possible criminal violation involving fraud or dishonesty; or
(3) that Employee has intentionally and in bad faith acted in a manner which results in a material detriment to the assets, business or prospects of the Company or any of its subsidiaries; or
(4) that Employee has failed to perform on a prolonged basis, where such failure is considered to be substantial and where corporate performance expectations have expired without been previously agreed upon with the Employee rescinding on an annual basis. Further, the Releasefailure to perform must be because of things considered to be within the reasonable control of the Employee, generally of an operating or strategic nature, and excluding performance primarily resulting from things clearly beyond the reasonable control of Employee, such as the following:
(iiiA) Employee is a drop in strict compliance with the terms Company's stock share price as a result of this Agreement as of the dates of the payments. The cessation of these payments will be in addition toan overall market correction, and not as an alternative to(B) severe national economic conditions, any other remedies at law or in equity available (C) adverse problems intrinsic to the Company, including without limitation the right to seek specific performance or an injunction's industry.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i(d) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either Employee's employment is terminated (i) because the full payment Employee terminates the Employment Period pursuant to Section 2 of this Employment Agreement or (ii) such lesser amount determined by because Employee voluntarily leaves the employ of the Company in accordance with this Section 5(e) that would result in no portion of during the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b)Employment Period, then the Company shall pay to Employee, no later than thirty (30) calendar days after such Termination Date, an amount equal to any unpaid current Annual Base Salary accrued through the Termination Date, plus one (1) times his then current Annual Base Salary. Any bonus finally determined to be payable at the end of the fiscal year in which the Termination Date is included shall be prorated for the period up to and including the Termination Date and shall be promptly paid to Employee only at the same time any other similar bonuses are paid to any other employee of the Company for such fiscal year. The Company shall continue to keep in full force and effect all plans or policies of medical, accident and life insurance benefits with respect to Employee and his base salary dependents with the same level of coverage available to employees under the terms of those employee benefit plans for a period of twelve (12) months, upon the same terms, costs and any accrued but unused vacation or PTO earned through otherwise to the same extent as such plans are in effect for employees of the Company who were similarly situated to Employee as of the Termination Date.
g. In addition to (e) Following the benefits otherwise provided in Section 5Employment Period, the Employee shall be entitled eligible for continuation of health and dental insurance coverage pursuant to the following benefits and payments upon Consolidated Omnibus Budget Reconciliation Act (COBRA) for eighteen (18) months. For the first twelve (12) months, Employee’s termination 's cost will be an amount equal to the normal employee contribution. Thereafter, the cost will be an amount equal to the COBRA cost of employment: such coverage. During the first eighteen (i18) the payment months, Employee may elect any of the coverages available to Humana employees. Thereafter, Humana agrees that Employee may elect coverage under any of the insured products offered by Humana's health insurance or HMO subsidiaries for Employee’s base salary , his spouse as of the date hereof ("Spouse"), and any eligible dependent until the later of Employee's age sixty-five (65) or eligibility for Medicare coverage (hereinafter "Extended Coverage"). At the earlier of Employee attaining Medicare eligibility or death, Employee's Spouse and any now current eligible dependent of Employee and Spouse will be eligible for Extended Coverage until the later of Spouse's age sixty-five (65) or Medicare coverage eligibility. If at any time during which the Extended Coverage is in effect Employee or his Spouse obtains Medicare or becomes eligible for other form employee group health insurance coverage which does not exclude a pre-existing condition of Employee, Spouse or type dependent, Humana's obligation will cease as to the one who has obtained Medicare or, in the case of compensation earnedother employee group health coverage, vested as to that person and payable through their eligible dependents. Employee's premium for the Date Extended Coverage and Spouse's premium, if she retains Extended Coverage, will be amount equal to the COBRA cost of Termination; (ii) such coverage. If Humana hereafter adopts a retiree health insurance program and Humana still has obligations under this provision, Employee will be offered the right to receive all option of participating in that program in lieu of the Extended Coverage described herein. The health and dental insurance benefits to hereunder shall be administered in conjunction with any other similar benefits which the Employee is vested on the Date of Termination in accordance with the terms under has from the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights but in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsno case shall be duplicative.
Appears in 1 contract
Sources: Employment Agreement (Humana Inc)
Severance Payments. a. Except as provided Within thirty (30) days of the Separation Date (and, in Section 5(ball events, within the time periods required by applicable law), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: pay Executive (i) his Base Salary (as such term is defined in the annual rate of base salary then being paid to Employment Agreement) accrued through the EmployeeSeparation Date, plus (ii) any accrued but unused vacation through the average of the past three years short term bonus paySeparation Date, plus and (iii) the Company’s portion of 12 months’ premiums under any health, disability reasonable and life insurance plan or program in which the Employee was entitled to participate immediately qualified unreimbursed expenses properly incurred prior to the Termination Separation Date provided Executive submits the expenses for reimbursement to the Company before the Separation Date (the aggregated amount“Accrued Obligations”). Except as otherwise provided by Section 2(h), Section 2(i), and Section 7 and subject to and conditioned upon, the execution and delivery by Executive of the release agreement attached hereto as Exhibit A (the “Release”) within thirty (30) days of the Separation Date, the Company agrees to pay Executive (collectively, the “Severance PayPayments”):
(1) One Million Four Hundred Forty Thousand Dollars ($1,440,000), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date less applicable taxes, withholdings and deductions, in accordance with the Company’s regular normal payroll cyclepractices, commencing in accordance with the following schedule (i) Three Hundred Sixty Thousand ($360,000) shall be paid on the first regular payroll date of the Company in 2014 that occurs more than 60 days is on or after the Termination Date (March 1, 2014 and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date)prior to March 15, provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, 2014; and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which remaining One Million Eighty Thousand dollars ($1,080,000) shall be paid to Employee by in equal installments over the Company in a lump sum eighteen month period beginning on the later of 60th day following the Termination Date or the closing on the event constituting the Change in ControlJuly 1, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)2014, the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum payment beginning on the first day payroll that is on or after July 1, 2014;
(2) A lump sum cash payment in 2014 (to be paid on or before March 15, 2014) equal to the bonus Executive would have otherwise been entitled to under the Company’s bonus plan in effect for 2013 had he remained employed through the date the bonus is paid, based on Executive’s actual achievement of the seventh month after the month performance objectives established for 2013;
(3) A lump sum cash payment in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or 2015 (to be received by the Employee under this Agreement would result in all paid on or a portion of such payment being subject before March 15, 2015) equal to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or amount of the target bonus percentage achieved by the Company’s then-Chief Executive Officer with respect the 2015 performance year, multiplied by (ii) such lesser $720,000; and
(4) A lump sum cash payment in 2016 (to be paid on or before March 15, 2016) equal to (i) the amount determined of the target bonus percentage achieved by the Company Company’s then-Chief Executive Officer with respect the 2016 performance year, multiplied by (ii) $720,000. Executive agrees that the Severance Payments are in addition to any pay and/or benefits to which he is otherwise entitled. Each payment of the Severance Payments made in accordance with this Section 5(e2(a) that would result in no portion shall be treated as a separate payment for purposes of Section 409A of the payment being subject to excise tax under Section 4999 Internal Revenue Code of the Code 1986, as amended (the “Excise TaxCode”), whichever of ) to the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under extent Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect applies to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeesuch payments.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Retirement Transition Agreement (Texas Capital Bancshares Inc/Tx)
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s With respect to any Transferred Employee whose employment is terminated by the Company Purchaser for any reason other than for Cause prior cause on or before the six (6) month anniversary of the applicable Transfer Date, Purchaser shall pay to a Change in Controlsuch Transferred Employee the amount of severance compensation and benefits equal to two (2) weeks of severance per year of service with Seller and its Affiliates; provided, the that each such Transferred Employee shall be entitled to an amount equal to the aggregate a minimum of one times: four (i4) the annual rate weeks’ severance and a maximum of base salary then being paid to the Employeetwenty-six (26) weeks’ severance; provided, plus (ii) the average of the past three years short term bonus payfurther, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the that such Transferred Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs enters into a release of claims in favor of the Company in against Purchaser and its Affiliates and, provided, further, that this Section 8.7(c) shall not apply to a form as prepared by the Company (the “Release”) and delivered to Transferred Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law who enters into any agreement with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is Purchaser that provides for a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and severance payment of any equity awards or other compensation or benefitskind upon termination of employment, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of which case such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company agreement shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, control with respect to any amount that severance payment obligations of Purchaser, if any. In addition to and notwithstanding any provision herein to the contrary, if a Branch Employee does not constitute the “deferral of compensation” under receive an offer from Purchaser in compliance with Section 409A of the Code 8.7(b) and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If such Branch Employee’s employment with the Company Seller and its Affiliates is terminated by Seller or its applicable Affiliate after the Company for Cause or for consummation of the transactions contemplated by this Agreement (and in no event later than two (2) months following the Closing Date (or, in the case of any reason not covered Leave Recipient, two (2) months following any later potential Transfer Date contemplated by Section 5(a8.7(a)(ii)) or 5(bsuch later date as may be required to comply with applicable law (including the Worker Adjustment and Retraining Notification Act of 1988, as amended, or any similar state or local law)), then Purchaser shall reimburse Seller, within thirty (30) calendar days of receipt of an invoice from Seller, for the Company shall pay to Employee only his base salary costs of any severance compensation and benefits (including the costs incurred during any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.notice
Appears in 1 contract
Sources: Purchase and Assumption Agreement (Amerant Bancorp Inc.)
Severance Payments. a. Except (a) Upon termination of the Executive's employment (i) for cause as provided described in Section 5(b9(a); or (ii) by the voluntary termination of employment of the Executive, the Executive shall not be entitled to any severance payment other than compensation earned by the Executive before the date of termination calculated pro rata up to and including the date of termination together with any amount to which the Executive is entitled under the Employment Standards Act (Ontario), upon as amended and in force from time to time.
(b) If the termination of Employee’s Executive's employment is terminated without notice by the Company Corporation for any reason other than for Cause prior to as described in Section 9(a), or if the responsibilities of the Senior Vice-President and President, Memory Division of the Corporation are reduced in a Change in Controlmanner that constitutes constructive dismissal, the Employee Executive shall be entitled to receive for 36 months following the date of termination the Executive's salary at a per-month rate equal to the aggregate of (i) the then applicable monthly base salary rate and (ii) the aggregate of the Executive's annual bonuses for the three fiscal years preceding the year in which the termination occurs, divided by 36 (or such lesser number of months during such period during which the Executive was employed by the Corporation), provided that such entitlement shall be reduced by 50% of the Executive's earnings from any other position or employment obtained by the Executive ("Replacement Earnings") during the first six months following the date of termination, 75% of any Replacement Earnings during the seventh to 24th month following the date of termination, and 100% of any Replacement Earnings during the 25th to 36th month following the date of termination. In addition, if the Executive's employment is terminated without notice by the Corporation for any reason other than as described in Section 9(a), or if the responsibilities of the Senior Vice-President and President, Memory Division of the Corporation are reduced in a manner that constitutes constructive dismissal, then in such circumstances the Executive shall be entitled to a cash payment in an amount equal to the aggregate then estimated net present value (as by the President & Chief Executive Officer, acting reasonably, assuming that the Executive would be employed by the Corporation for the ensuing 24 months and using as a discount rate the Corporation's cost of one times: (ifunds under its principal bank working capita1 credit lines) the annual rate of base salary then being paid to the Employee, plus (ii) the average 24 months' of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified non-monetary employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee Executive is vested on then entitled: including hospitalization, supplemental health, group life, dental, special care for children, employee assistance, medical/surgical, vision and hearing benefits. The payment described in this Section 10(b) is the Date only severance payment or payment in lieu of Termination notice that the Executive will receive in accordance with the terms under event of the Company pension and welfare benefit plans or any successor termination of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights this Agreement for reasons contemplated in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsthis Section 10(b).
Appears in 1 contract
Sources: Employment Agreement (Celestica Inc)
Severance Payments. a. Except (a) If a Terminating Event occurs within two (2) years after the date on which a Change in Control has occurred, then the Executive shall be entitled to receive the following:
(i) an aggregate amount equal to 1.5 times the Executive's "Highest Annual Compensation" (as provided defined in paragraph (c) of this Section 5(b4) (hereinafter "Lump Sum Payment "), upon payable within thirty (30) days of the termination date on which the Executive's employment with the Bank terminates (the "Date of Employee’s employment Termination ");
(ii) any base salary, commissions or other compensation accrued or earned, but not yet paid, as of the Date of Termination and any annual or other bonus actually awarded, but not yet paid, as of the Date of Termination, such amounts to be paid on the Date of Termination;
(iii) reimbursement for all business expenses for which the Executive would ordinarily be reimbursed by the Company Employers in the ordinary course of business in accordance with the Employers ' policies , programs, procedures or practices incurred, but not yet paid, as of the Date of Termination , such amount to be paid on the Date of Termination;
(iv) payment of the per diem value of any unused vacation days, whether deemed to be accrued or unaccrued, that would be available to the Executive through the end of the calendar year (but not beyond) in which the Date of Termination occurs;
(v) continuation of the Employers' employee welfare benefit plans, programs and practices in which the Executive and his spouse and any other than for Cause prior eligible dependents participate or are eligible to participate as of the Date of Termination or, if more favorable to the Executive, as of the date of a Change in Control, at the Employee shall be entitled to an amount equal levels in effect on, and at the same out-of-pocket costs to the aggregate Executive as of, the Date of one times: (i) the annual rate of base salary then being paid Termination or, if more favorable to the EmployeeExecutive, plus (ii) the average as of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, for the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the sixeighteen-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect period commencing on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.; and
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a(vi) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, as may be provided in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or applicable plans, programs, policies, procedures or any successor practices of the Employers.
(b) If a Terminating Event occurs within one ( 1) year prior to any the date on which a Change in Control occurs, then the Executive shall be entitled to receive, as provided in this paragraph (b), all of the payments and benefits that he would have been entitled to receive under paragraph (a) of this Section 4, unless such plans Terminating Event occurs as a result of a termination for Cause (as such term is defined in paragraph (k) of Section 8 below), in which case no increase or programsadjustments to the amounts paid or benefits provided to the Executive in connection with such Terminating Event shall be made under this paragraph (b). If required in accordance with the immediately preceding sentence, the amounts paid and benefits provided to the Executive in connection with a Terminating Event that occurs within one (1) year prior to the date on which a Change in Control occurs shall be increased or otherwise adjusted to ensure that the Executive receives the full payments and benefits contemplated by paragraph (a) of this Section 4. If the payments and/or benefits to be received by the Executive in connection with a Terminating Event that has occurred within one (1) year prior to the date on which a Change in Control occurs are required to be increased or adjusted under this paragraph (b), then the Executive shall be paid on the first ordinary payroll payment date of the Bank following the occurrence of such Change in Control the cash amount necessary to ensure that the Executive shall have received the full amounts of the payments and benefits that the Executive would have received as of such date under paragraph (a) of this Section 4.
Appears in 1 contract
Sources: Change in Control/Noncompetition Agreement (Enterprise Bancorp Inc /Ma/)
Severance Payments. a. Except (1) At any time prior to a Change in Control (as provided in Section 5(bdefined below), upon in the termination of Employee’s event that (A) Executive's employment hereunder is terminated by the Company other than at any time for any reason except (i) for Cause prior (as defined below) or (ii) due to Executive's death or Disability (as defined below), or (B) Executive terminates his own employment hereunder for Good Reason (as defined below), then, in either such event, Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to him on the Termination Date as salary continuation (pursuant to the Company's normal payroll procedures) for a period equal to six (6) consecutive months following the Termination Date. In the event of Executive's death during such salary continuation period, the Company shall pay the sum of the present value of all remaining payments (using a 5% discount rate) in a single payment to Executive's surviving spouse, if any, or if there is no surviving spouse, to Executive's estate within 60 days of his death. Such severance payments shall be subject to Sections 10 and 11 hereof. Prior to a Change in Control, in the Employee event that Executive's employment is terminated through notice of non-renewal as of the end of the Initial Term of Employment (pursuant to Section 4) or any one-year Renewal Term, Executive shall be entitled to an amount equal receive, and the Company shall be obligated to the aggregate of one times: (i) the annual rate of pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to him on the Termination Date as salary continuation (pursuant to the aggregated amountCompany's normal payroll procedures) for each month following his Termination Date, not to exceed six months, that Executive is (A) not in violation of the “Severance Pay”confidential information, non-competition and other covenants of Sections 10 and 11 hereof and (B) not employed by another employer, as determined by the Company.
(2) At any time after a Change in Control (as defined below), which shall be paid to Employee by in the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company event that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(cA) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s Executive's employment hereunder is terminated by the Company without at any time for any reason except (i) for Cause (as defined below) or by the Employee for Good Reason, and (ii) due to Executive's death or Disability (as defined below), or (B) Executive terminates his own employment hereunder for Good Reason (as defined below in this Section 6(c)), then, in either such event, Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation except as provided below in this paragraph) then being paid to him on the Termination Date occurs as salary continuation (pursuant to the Company's normal payroll procedures) for a period equal to twelve (12) consecutive months following the Termination Date, plus an additional single sum payment equal to one-half of Executive's target bonus (pursuant to Section 3(b)) for the Bonus Year in which the termination occurred, which bonus shall be payable within 24 months immediately following 30 days from the Termination Date. In the event of Executive's death during such salary continuation period, the Company shall pay the sum of the present value of all remaining payments in a single payment (using a 5% discount rate) to Executive's surviving spouse, if any, or if there is no surviving spouse, to Executive's estate within 60 days of his death.
After a Change in Control, in the Employee shall receive 2.99 times event that the Severance Pay calculated in accordance with Company terminates Executive's employment through notice of nonrenewal as of the end of the Initial Term of Employment (pursuant to Section 5(a)4) or any one-year Renewal Term, which Executive shall be entitled to receive, and the Company shall be obligated to pay, Executive's base salary under Section 3(a) (without regard to any bonuses or extraordinary compensation) then being paid to Employee by the Company in a lump sum him on the later Termination Date as salary continuation (pursuant to the Company's normal payroll procedures) for a period of 60th day six (6) consecutive months following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfiedDate.
c. Notwithstanding the foregoing provisions of (3) Except as otherwise specifically provided in this Section 5(a) and (b6(b), the Company will not be obligated to make any severance payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will shall be in addition to, and shall not as an alternative toreduce or offset, any other remedies at law or in equity available payments that are due to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption Executive from the six-month delay requirement of section 409A(a)(2)(B)(iCompany (or any other source) of the Code is not availableor under any other agreements, the Employee’s Severance Pay except that severance payments for the first six months following separation from service hereunder shall be paid offset any severance benefits otherwise due to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of Executive under any equity awards severance pay plan or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined program maintained by the Company in accordance with that covers its employees generally. The provisions of this Section 5(e6(b) that would result in no portion shall supersede any conflicting provisions of the payment being subject this Agreement but shall not be construed to excise tax under Section 4999 of the Code (the “Excise Tax”)curtail, whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all offset or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect limit Executive's rights to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunderother payments, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of whether contingent upon a Change in Control and second(as defined below) or otherwise, with respect to under this Agreement or any amount that constitutes the “deferral other agreement, contract, plan or other source of compensation” under Section 409A payment.
(4) A "CHANGE IN CONTROL" of the Code Company shall be deemed to have occurred if any of the following shall have taken place: (A) any "person" (as such term is used in Sections 13(d) and regulations promulgated thereunder14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")) other than Gord▇▇ ▇▇▇▇ ▇▇▇ his Affiliates (defined below), disregard taken together, is or becomes the acceleration "beneficial owner" (as defined in Rule 13d-3 under the time Exchange Act, or any successor provisions thereto), directly or indirectly, of payment and then disregard securities of the acceleration Company representing thirty-five percent (35%) or more of vesting as a result the combined voting power of the Company's then-outstanding voting securities; (B) the approval by the stockholders of the Company of a Change in Control first with respect to Company funded amounts and then the Employee’s deferralsreorganization, merger, or consolidation, in each case only with respect to which persons who were stockholders of the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor Company immediately prior to the event triggering the payments that are subject to the Excise Tax such reorganization, merger, or consolidation do not, immediately thereafter, own or control more than fifty percent (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d50%) of the Code) compounded based on combined voting power entitled to vote generally in the nature election of directors of the paymentreorganized, merged or consolidated Company's then outstanding securities in substantially the same proportion as their ownership of the Company's outstanding voting securities prior to such reorganization, merger or consolidation; (C) a liquidation or dissolution of the Company or the sale of all or substantially all of the Company's assets; (D) in effect on the Date event any person is elected by the stockholders of Terminationthe Company to the Board who has not been nominated for election by a majority of the Board or any duly appointed committee thereof; or (E) following the election or removal of directors, but if a majority of the Board consists of individuals who were not otherwise specifiedmembers of the Board two (2) years before such election or removal, compounded on unless the election of each director who is not a semiannual basisdirector at the beginning of such two-year period has been approved in advance by directors representing at least a majority of the directors then in office who were directors at the beginning of the two-year period. The determination by the Accounting Firm shall be final and binding on Board, in its discretion, may deem any other corporate event affecting the Company and the Employeeto be a "Change in Control" hereunder.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided (a) In consideration of Employee's promises and the Release and Covenant Not To Sue contained in Section 5(bParagraph 3 of this Agreement, Company:
(i) will pay to Employee the aggregate sum of $600,000 less withholding for taxes and other required items (the "Separation Pay"), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to which represents an amount equal to the aggregate of one times: (i) the annual rate of Employee's base salary then being paid to as of the Employeedate of this Agreement ($250,000), plus an amount equal to Employee's maximum annual bonus opportunity as of the date of this Agreement ($250,000), plus an additional $100,000 severance amount. Notwithstanding the provisions of Section 7(b) (ii) the average of the past three years short term bonus payEmployment Agreement, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amountis specifically superseded hereby, the “Severance Pay”), which Separation Pay shall be paid to Employee by the Company in equal installments over a period of 12 twelve (12) months from the Termination Date in accordance with the Company’s regular 's normal payroll cyclepolicies. Such payments shall begin on October 15, commencing on the first regular payroll date 2004, unless Employee revokes this Agreement prior to that date;
(ii) will reimburse Employee for full COBRA benefits for Employee, pursuant to Section 7(b)(iii) of the Company that Employment Agreement. Pursuant to Section 7(b)(iii) of the Employment Agreement, such payments shall cease when Employee becomes eligible to receive health, medical, and/or dental benefits from a new employer or on March 31, 2006 (whichever event occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Dateearlier), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated . These reimbursements shall be made by the Company without Cause on a monthly basis provided Employee provides reasonable documentation to verify his payment of the COBRA benefits.
(b) In further consideration of Employee's promises and the Release and Covenant Not To Sue contained in Paragraph 3 of this Agreement, Company agrees, notwi▇▇▇tanding the terms of the Employment Agreement or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by any stock option agreement between the Company in a lump sum on and Employee, that all of the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)Employee's stock options, as applicableset forth on Schedule A hereto, unless (i) Employee signs a release of claims in favor of to the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after extent unvested on the Termination Date, (ii) all applicable consideration periods shall accelerate and rescission periods provided by law with respect to become 100% vested and exercisable on the Release have expired without Employee rescinding the ReleaseTermination Date, and all such stock options shall will remain exercisable until fifteen (iii15) months from the date employee ceases to be a Director of the Company. Schedule A attached hereto contains a complete listing of all stock options held by Employee is in strict compliance with the terms of this Agreement as of the dates Termination Date. Except as modified by this Section 2(b), all of Employee's stock options shall continue to be governed by the paymentsapplicable stock option plan and stock option agreement. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(iThis Section 2(b) specifically supersedes Section 7(b)(iv) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employment Agreement. Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event acknowledges and agrees that the vesting, acceleration and payment provisions of this Section 2(b) shall not apply to any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to stock options that may be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined granted by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through subsequent to the Termination Date.
g. In addition to (c) The parties acknowledge and agree that the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits above payments and payments agreements have been negotiated and agreed upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary voluntarily by both parties. The parties also acknowledge and agree that these amounts exceed any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all pay and benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans already may have been entitled by contract or any successor of such plan and law, or for any other plan or agreement relating to retirement benefits; reason, and (iii) the right to exercise that they constitute good, valuable and to receive all rights sufficient consideration for Employee's covenants and agreements contained in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsthis Agreement.
Appears in 1 contract
Sources: Separation and Release Agreement (Indus International Inc)
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 and Section 12(B) hereof, if the Executive has a Separation from Service following a Change in Section 5(bControl and during the Term, and such Separation from Service is an involuntary Separation from Service (within the meaning of Treasury Regulation section 1.409A-1(n)(1), upon the termination of Employee’s employment ) by the Company other than for Cause prior to or Disability, or is a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee Separation from Service by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee Executive for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary the Executive the amounts, and any accrued but unused vacation or PTO earned through provide the Termination Date.
g. In Executive the benefits, described in this Section 6.1 ("Severance Payments"), in addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits any payments and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee Executive is vested entitled under Section 5 hereof. Notwithstanding the foregoing, the Executive shall not be eligible to receive any payment or benefit provided for in this Section 6.1 unless the Executive shall have executed and delivered to the Company within 45 days after the Separation from Service a release (substantially in the form of Exhibit A hereto) in favor of the Company and others set forth on said Exhibit A, relating to all claims or liabilities of any kind relating to the Executive's employment and termination of employment with the Company, and the Executive shall not have revoked such release within 7 days after executing it. Subject to Section 12(B) hereof, any payments and benefits that, but for the preceding sentence, may be paid or provided pursuant to the provisions below of this Section 6.1 before the 56th day following the Separation from Service shall be paid or provided on the Date 56th day following the Separation from Service, unless such payment or benefit may be paid or provided pursuant to the provisions below of Termination this Section 6.1 within a designated period following the Separation from Service that ends more than 56 days following the Separation from Service, in accordance with which case such payment or benefit shall be paid or provided within the terms under portion of such designated period that begins on the 56th day following the Separation from Service and ends on the last day of such designated period, provided in each case that the Executive executed the release and delivered it to the Company pension within the aforementioned 45-day period and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) did not revoke the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsrelease within 7 days after executing it.
Appears in 1 contract
Severance Payments. a. Except (a) If a Terminating Event occurs within two (2) years after the date on which a Change in Control has occurred, then the Executive shall be entitled to receive the following:
(i) an aggregate amount equal to 1.5 times the Executive's "Highest Annual Compensation" (as provided defined in paragraph (c) of this Section 5(b4), upon such amount to be paid out in equal periodic installments in accordance with the termination Bank's ordinary payroll practices over the eighteen-month period commencing on the first payroll payment date after the date on which the Executive's employment with the Bank terminates (the "Date of Employee’s employment Termination");
(ii) any base salary, commissions or other compensation accrued or earned, but not yet paid, as of the Date of Termination and any annual or other bonus actually awarded, but not yet paid, as of the Date of Termination, such amounts to be paid on the Date of Termination;
(iii) reimbursement for all business expenses for which the Executive would ordinarily be reimbursed by the Company Employers in the ordinary course of business in accordance with the Employers' policies, programs, procedures or practices incurred, but not yet paid, as of the Date of Termination, such amount to be paid on the Date of Termination;
(iv) payment of the per diem value of any unused vacation days, whether deemed to be accrued or unaccrued, that would be available to the Executive through the end of the calendar year (but not beyond) in which the Date of Termination occurs;
(v) continuation of the Employers' employee welfare benefit plans, programs and practices in which the Executive and his spouse and any other than for Cause prior eligible dependents participate or are eligible to participate as of the Date of Termination or, if more favorable to the Executive, as of the date of a Change in Control, at the Employee shall be entitled to an amount equal levels in effect on, and at the same out-of-pocket costs to the aggregate Executive as of, the Date of one times: (i) the annual rate of base salary then being paid Termination or, if more favorable to the EmployeeExecutive, plus (ii) the average as of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, for the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum eighteen-month period commencing on the later Date of 60th day following Termination (or, if such continuation is not permitted by applicable law or if the Termination Date or the closing on the event constituting the Change Bank's Board of Directors so determines in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)its sole discretion, the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company Bank shall pay to the Employee shall be either Executive a cash amount equal to the difference between (iA) the full payment or (ii) such lesser aggregate amount determined that would be required to be paid by the Company Executive in order for the Executive to obtain a continuation of such benefits and coverages for such eighteen-month period for himself, his spouse and any other eligible dependents under or through one or more plans, programs or other arrangements provided by one or more unaffiliated third parties and (B) the out-of-pocket costs that would be incurred by the Executive in accordance with this Section 5(ethe terms hereof if such continuation of benefits and coverages were provided under the Employers' employee welfare benefit plans, programs and practices);
(vi) that would result in no portion reimbursement for the reasonable fees of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt a professional out-placement service selected by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy Executive within ninety (ii90) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by such amount to be paid promptly after the Accounting Firm shall be final and binding on the Company and the Employee.expense is incurred; and
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a(vii) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, as may be provided in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or applicable plans, programs, policies, procedures or practices of the Employers.
(viii) all annual payments (which currently are $33,000 per year but which may be adjusted upward by either an amendment to the Split Dollar Agreement between the Executive and the Employers or by an additional split dollar agreement) which are payable to Mass Mutual on February 28th of each year up through age 65 of the Executive under the Split Dollar Agreement between the Executive and the Employers shall be made in one lump sum payment.
(b) If a Terminating Event occurs within one (1) year prior to the date on which a Change in Control occurs, then the Executive shall be entitled to receive, as provided in this paragraph (b), all of the payments and benefits that he would have been entitled to receive under paragraph (a) of this Section 4 if such Terminating Event had occurred within two (2) years after the date on which a Change in Control has occurred, unless such Terminating Event occurs as a result of a termination for Cause (as such term is defined in paragraph (f) of Section 8 below), in which case no increase or adjustments to the amounts paid or benefits provided to the Executive in connection with such Terminating Event shall be made under this paragraph (b). If required in accordance with the immediately preceding sentence, the amounts paid and benefits provided to the Executive in connection with a Terminating Event that occurs within one (1) year prior to the date on which a Change in Control occurs shall be increased or otherwise adjusted to ensure that the Executive receives the full payments and benefits contemplated by paragraph (a) of this Section 4, as if such Terminating Event had occurred within two (2) years after the date on which a Change in Control has occurred. If the payments and/or benefits to be received by the Executive in connection with a Terminating Event that has occurred within one (1) year prior to the date on which a Change in Control occurs are required to be increased or adjusted under this paragraph (b), then the Executive shall be paid on the first ordinary payroll payment date of the Bank following the occurrence of such Change in Control the cash amount necessary to ensure that as of such date the Executive shall have received the full amounts of the payments and benefits that the Executive would have received as of such date under paragraph (a) of this Section 4 if such Terminating Event had occurred within two (2) years after the date on which a Change in Control has occurred (including without limitation the economic equivalent of any successor noncash benefits that have not been provided to the Executive during the period from the date on which such Terminating Event occurred and the date on which such Change in Control occurred) and from and after such payroll payment date the Executive shall receive the full amounts of the remaining payments and benefits that the Executive is required to receive under paragraph (a) of this Section 4 in accordance with the terms thereof (including without limitation, to the extent that reimbursement for the reasonable fees of a professional out-placement service selected by the Executive has not already then been paid hereunder, such reimbursement with respect to a professional out-placement service selected by the Executive within ninety (90) days after the occurrence of such Change in Control).
(c) For purposes of this Section 4, the Executive's "Highest Annual Compensation" shall mean, as determined as of any Date of Termination, the sum of (i) the highest per annum rate of base salary paid by the Employers to the Executive at any time during the three-year period prior to such Date of Termination, (ii) the highest amount of commission or other compensation (which is not otherwise included in the base salary and bonus amounts referred in clauses (i) and (iii) of this paragraph (c)) paid by the Employers to the Executive with respect to any of the three most recently completed fiscal years of the Bank prior to such plans Date of Termination, and (iii) the highest annual incentive compensation or programsother bonus amount paid by the Employers to the Executive (or which would have been paid but for an election by the Executive to defer payment to a later period) with respect to any of the three most recently completed fiscal years of the Bank prior to such Date of Termination.
Appears in 1 contract
Sources: Change in Control/Noncompetition Agreement (Enterprise Bancorp Inc /Ma/)
Severance Payments. a. Except as provided Following a Change in Section 5(b)Control of the Company, upon if, ------------------ during the termination of Employee’s employment by the Company other than for Cause prior to a thirty-six (36) months following such Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment Executive is terminated by the Company without Cause or by (ii) Executive terminates employment with the Employee Company (or its successor or assigns) for Good Reason, the Company shall pay and provide Executive each of the following:
(a) Within five (5) business days after the effective date of any such termination of employment (the "Effective Date"), the Company (or its successor or assigns) will pay Executive a lump sum cash payment equal to three (3) times the average annual compensation that was includible in Executive's gross income during each of the lesser of (i) the five (5) full fiscal years immediately prior to the Effective Date and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee number of years Executive was employed by the Company immediately prior to the Effective Date.
(b) Executive and her dependents shall continue to be covered for thirty-six (36) months after the Effective Date by all survivor rights, insurance and benefit programs of the Company (or its successor or assigns) in a lump sum on type and amount at least equivalent to that provided to she and her dependents by the later of 60th day following the Termination Date or the closing on the event constituting Company immediately prior to the Change of Control; provided that if participation in Control, provided any one or more of such arrangements is not possible under the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)terms thereof, the Company (or its successor or assigns) will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor provide substantially identical benefits outside of the Company in a form as prepared programs. The cost of this coverage will be paid by the Company (the “Release”or its successor or assigns).
(c) and delivered to Employee no later than five business days after the Termination Date, (ii) If all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as or any portion of the dates of amounts payable to Executive under this Agreement, either alone or together with other payments which Executive has the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available right to receive from the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee constitute "excess parachute payments" (within the meaning of section 409A Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid that are subject to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined imposed by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”or similar tax and/or assessment), whichever the Company (or its successor or assigns) shall increase the amounts payable pursuant to Section 6(a) above to the extent necessary to place Executive in the same after-tax position as she would have been in had no such excise tax been imposed on the payments hereunder. The determination of the foregoing amountsamount of any such excise taxes shall initially be made by the independent accounting firm employed by the Company immediately prior to the Change in Control. If, taking into account at a later date, it is determined that the applicable Federalamount of excise taxes payable by Executive is greater than the amount initially so determined, state, and local employment then the Company (or its successor or assigns) shall pay Executive an amount equal to the sum of (i) such additional excise taxes, income taxes(ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other taxes payable by Executive with respect to the amount specified in (i) and (ii) above, and the Excise Tax, results in reimbursement provided by this (iii). E-39 Upon the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result occurrence of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunderCompany, disregard if, during the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a six (6) months following such Change in Control first with respect to Company funded amounts and then the Employee’s deferralsControl, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s Executive terminates employment with the Company is terminated by the Company for Cause (or for any reason not covered by Section 5(aits successor or assigns) or 5(b)without Good Reason, then within five (5) business days after the Effective Date, the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through Executive an amount equal to thirty percent (30%) of the Termination Date.
g. In addition to the benefits otherwise provided amount described in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i6(a) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsabove.
Appears in 1 contract
Sources: Executive Employment Agreement (Amserv Healthcare Inc)
Severance Payments. a. Except as provided The Company shall pay you cash severance in Section 5(b), upon the termination form of Employee’s employment by continuation of your base salary from the Company other than for Cause prior to a Change in Control, Separation Date through the Employee shall be entitled to an amount equal to the aggregate of one times: (i) first anniversary thereof at the annual rate of base salary then being paid to the Employee, plus $425,000.00 (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance PayPayment”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be made in addition toregular periodic installment payments at the rate of $16,346.15 every two weeks, resulting in cumulative payments of $425,000.00, less withholding and not as an alternative toother customary payroll deductions. In addition, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either you two (i2) the full payment or cash bonus payments (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise TaxSeverance Bonus Payments”), whichever of the foregoing amountsone in an amount not less than $212,500.00, taking into account the applicable Federalless withholding and other customary payroll deductions, stateto be paid on May 27, and local employment taxes, income taxes2016, and the Excise Tax, results second Severance Bonus Payment in the receipt by the Employeeamount of $425,000.00 to be paid no later than March 15, on an after-tax basis, 2017. You agree that this Severance Payment and each of the greatest amount Severance Bonus Payments are in addition to any other benefits and payments to which you are otherwise legally entitled. Your receipt of the payment notwithstanding Severance Payment and the Severance Bonus Payments are expressly conditioned on your execution and non-revocation of this Agreement, including but not limited to the release provisions of paragraphs 11 and 15 hereof. Severance Payment installments shall commence within a reasonable time after the expiration of seven (7) days of your execution of this Agreement (assuming you have not revoked the agreement within that all or some portion period under paragraph 15(h)). Notwithstanding the foregoing to the contrary, in any case where the first and last days of the payment may be applicable release and nonrevocability periods provided for in this Agreement (“Applicable Release Period”) are in two separate taxable under Section 4999 of the Code. In the event the amounts due under Section are reducedyears, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations payments required to be made to you under paragraph 2 of this Agreement that are treated as deferred compensation for purposes of Section 5(e409A (as defined in paragraph 16 below) shall be made by a nationally recognized accounting firm that is made/commence in the Company’s outside auditor immediately prior to later taxable year, as soon as practicable, but in no event later than thirty (30) days following the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses conclusion of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code)Applicable Release Period. For the purposes avoidance of all calculations under Section 280G doubt, you are not permitted to elect the taxable year in which any of the Code and the application of payments under this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeeparagraph 2 are made.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided (a) The Company will make the severance payments specified in Section 5(b), upon ) or (c) below if this Employment Agreement is terminated pursuant to Sections 4(d) or (e) hereof.
(b) If the termination of Employee’s employment by the Company other than for Cause Employment Agreement is terminated pursuant to Section 4(d) prior to a "Change in In Control, the Employee shall be entitled to an amount equal to the aggregate of one times: " (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”as defined below), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in as severance payments under this Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b5(b), the Company will not be obligated pay Employee the severance benefits then in effect under the Company's severance policy for all employees.
(c) If this Employment Agreement is terminated pursuant to make any payments to Section 4(d) or on behalf of Employee under Section 5(a(e) and within twenty-four (b), as applicable, unless (i24) Employee signs months after a release of claims Change in favor Control of the Company in a form as prepared by has occurred, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, shall pay the Employee is a specified employee within lump sum equal to three (3) times the meaning of section 409A of the Code, salary and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be bonus paid to the Employee in a single the prior calendar year. This lump sum on the first day of the seventh month shall be paid within 30 days after the month in which the Employee’s separation from service occurs.
e. effective date of termination. In the event that the vestingaddition, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by health insurance benefits for the Employee under this Agreement would result in all or a portion will be continued for thirty-six (36) months after the effective date of such payment being subject termination upon substantially the same terms as provided to excise tax under Section 4999 of Employee immediately before the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code)Control. For the purposes of all calculations under Section 280G this Employment Agreement, a "Change in Control" shall be deemed to have occurred if any of the Code following have occurred: <page>
(i) either (A) the Corporation shall receive a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission pursuant to Section 13(d) of the application Securities Exchange Act of this 1934 (the "1934 Act") disclosing that any person (as such term is used in Section 5.113(d) of the ▇▇▇▇ ▇▇▇) ("Person"), all determination as is the beneficial owner, directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation or (B) the Company has actual knowledge of facts which would require any Person to present value shall use 120 percent file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable Federal rate (determined under period of time specified in Section 1274(d13(d) of the Code▇▇▇▇ ▇▇▇) compounded based on disclosing that such Person is the nature beneficial owner, directly or indirectly, of twenty (20) percent or more of the paymentoutstanding stock of the Corporation;
(ii) purchase by any Person, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on other than the Company and the Employee.
f. If Employee’s employment with or a wholly-owned subsidiary of the Company is terminated or an employee benefit plan sponsored or maintained by the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Corporation (or securities, including units of limited partnership interests, convertible into stock) for Cause cash, securities or for any reason not covered by Section 5(a) or 5(bother consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation (calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(iii) approval by the shareholders of the Corporation of (A) any consolidation or merger of, or other business combination involving, the Corporation in which the Corporation is not to be the continuing or surviving entity or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, other than a consolidation or merger or business combination of the Corporation in which holders of its stock immediately prior to the consolidation or merger or business combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the consolidation or merger or business combination as immediately before, or (B) any consolidation or merger or business combination in which the Corporation is the continuing or surviving corporation but in which the common shareholders of the Corporation immediately prior to the <page> consolidation or merger or business combination do not hold at least a majority of the outstanding common stock of the continuing or surviving corporation (except where such holders of common stock hold at least a majority of the common stock of the corporation which owns all of the common stock of the Corporation), or (C) any sale, lease, exchange or other transfer by operation of law or otherwise (in one transaction or a series of related transactions) of all or substantially all the assets of the Corporation or the Partnership; or
(iv) a change in the majority of the members of the Board within a 24-month period unless the election or nomination for election by the Corporation shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through beginning of the Termination Date24-month period.
g. In addition to (v) more than fifty percent (50%) of the benefits assets of the Corporation or the Partnership are sold, transferred or otherwise provided disposed of, whether by operation of law or otherwise, other than in Section 5, the usual and ordinary course of its business.
(d) Employee shall be entitled under no obligation to mitigate damages with respect to termination and in the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and event Employee is employed or receives income from any other form or type of compensation earned, vested and payable through source there shall be no offset therefor against the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under amounts due from the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programshereunder.
Appears in 1 contract
Severance Payments. a. Except as provided (a) The Company will make the severance payments specified in Section 5(b), upon ) or (c) below if this Employment Agreement is terminated pursuant to Sections 4(d) or (e) hereof.
(b) If the termination of Employee’s employment by the Company other than for Cause Employment Agreement is terminated pursuant to Section 4(d) prior to a “Change in In Control, the Employee shall be entitled to an amount equal to the aggregate of one times: ” (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”as defined below), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in as severance payments under this Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b5(b), the Company will not be obligated pay Employee the severance benefits then in effect under the Company’s severance policy for all employees.
(c) If this Employment Agreement is terminated pursuant to make any payments to Section 4(d) or on behalf of Employee under Section 5(a(e) and within twenty-four (b), as applicable, unless (i24) Employee signs months after a release of claims Change in favor Control of the Company in a form as prepared by has occurred, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, shall pay the Employee is a specified employee within lump sum equal to twice the meaning of section 409A of the Code, salary and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be bonus paid to the Employee in a single the prior calendar year. This lump sum on the first day of the seventh month shall be paid within 30 days after the month in which the Employee’s separation from service occurs.
e. effective date of termination. In the event that the vestingaddition, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by health insurance benefits for the Employee under this Agreement would result in all or a portion will be continued for twenty-four (24) months after the effective date of such payment being subject termination upon substantially the same terms as provided to excise tax under Section 4999 of Employee immediately before the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code)Control. For the purposes of all calculations under Section 280G this Employment Agreement, a “Change in Control” shall be deemed to have occurred if any of the Code following have occurred:
(i) either (A) the Corporation shall receive a report on Schedule 13D, or an amendment to such a report, filed with the Securities and Exchange Commission pursuant to Section 13(d) of the application Securities Exchange Act of this 1934 (the “1934 Act”) disclosing that any person (as such term is used in Section 5.113(d) of the 1934 Act) (“Person”), all determination as is the beneficial owner, directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation or (B) the Company has actual knowledge of facts which would require any Person to present value shall use 120 percent file such a report on Schedule 13D, or to make an amendment to such a report, with the SEC (or would be required to file such a report or amendment upon the lapse of the applicable Federal rate (determined under period of time specified in Section 1274(d13(d) of the Code1▇▇▇ ▇▇▇) compounded based on disclosing that such Person is the nature beneficial owner, directly or indirectly, of twenty (20) percent or more of the paymentoutstanding stock of the Corporation;
(ii) purchase by any Person, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on other than the Company and the Employee.
f. If Employee’s employment with or a wholly-owned subsidiary of the Company is terminated or an employee benefit plan sponsored or maintained by the Company or a wholly-owned subsidiary of the Company, of shares pursuant to a tender or exchange offer to acquire any stock of the Corporation (or securities, including units of limited partnership interests, convertible into stock) for Cause cash, securities or for any reason not covered by Section 5(a) or 5(bother consideration provided that, after consummation of the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of twenty (20) percent or more of the outstanding stock of the Corporation (calculated as provided in paragraph (d) of Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(iii) approval by the shareholders of the Corporation of (A) any consolidation or merger of, or other business combination involving, the Corporation in which the Corporation is not to be the continuing or surviving entity or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, other than a consolidation or merger or business combination of the Corporation in which holders of its stock immediately prior to the consolidation or merger or business combination have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the consolidation or merger or business combination as immediately before, or (B) any consolidation or merger or business combination in which the Corporation is the continuing or surviving corporation but in which the common shareholders of the Corporation immediately prior to the consolidation or merger or business combination do not hold at least a majority of the outstanding common stock of the continuing or surviving corporation (except where such holders of common stock hold at least a majority of the common stock of the corporation which owns all of the common stock of the Corporation), or (C) any sale, lease, exchange or other transfer by operation of law or otherwise (in one transaction or a series of related transactions) of all or substantially all the assets of the Corporation or the Partnership; or
(iv) a change in the majority of the members of the Board within a 24-month period unless the election or nomination for election by the Corporation shareholders of each new director was approved by the vote of at least two-thirds of the directors then still in office who were in office at the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through beginning of the Termination Date24-month period.
g. In addition to (v) more than fifty percent (50%) of the benefits assets of the Corporation or the Partnership are sold, transferred or otherwise provided disposed of, whether by operation of law or otherwise, other than in Section 5, the usual and ordinary course of its business.
(d) Employee shall be entitled under no obligation to mitigate damages with respect to termination and in the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and event Employee is employed or receives income from any other form or type of compensation earned, vested and payable through source there shall be no offset therefor against the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under amounts due from the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programshereunder.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon (a) If the termination of Employee’s Executive's employment by the Company other than is terminated for Cause prior to a Change in Controlany reason including death, the Employee Executive or spouse of the Executive shall be entitled to an amount equal to receive the aggregate of one times: greater of:
(i) the annual rate of total of:
(A) 24 months' salary at the then applicable base salary rate;
(B) the present value, as determined by the Chairman, acting reasonably, of the benefits described in section 4(b) that would be enjoyed by the Executive during the consecutive 24 months assuming his employment was not terminated and assuming the then being current level of benefits were continued for those 24 months; and
(C) the present value, as determined by the Chairman, acting reasonably, of the amounts that would have been paid by the Corporation or reimbursed to the Employee, plus Executive pursuant to section 8 during the consecutive 24 months assuming that his employment had not been termination; and
(ii) the average salary otherwise payable to the Executive for the unexpired term of this agreement together with the other amounts described in clause 11(b)(i), mutatis mutandis, provided that in no case will the Executive receive less than the amount to which he is entitled under the Employment Standards Act (Ontario). The payment described in this subsection 11(b) is the only severance payment the Executive will receive in the event of the past three years short term bonus pay, plus (iii) the Company’s portion termination of 12 months’ premiums under any health, disability and life insurance plan or program this agreement for reasons contemplated in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”this subsection 11(b), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a(b) and subject to the limitation in Section 5(e), if (i) the Employee’s The Executive's employment is terminated by as a result of the Company without Cause permanent disability or by death of the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in ControlExecutive, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date Executive or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)his estate, as applicable, unless (i) Employee signs a release of claims in favor shall be entitled to receive, within 30 days of the Company in a form as prepared by date of such termination, the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as balance of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay base salary that would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall otherwise be paid to the Employee in a single lump sum on Executive during the first day remainder of the seventh month after term of this agreement. The Executive agrees to reasonably comply with all requirements necessary for the month in which Corporation to obtain life insurance for the Employee’s separation from service occursterm of this agreement.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b(c) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under this section 11, whenever a payment is to be determined with reference to the remaining term of this agreement, if less than six months remain in the term of this agreement and no party has given notice of its intention not to renew this agreement as contemplated by Section 280G 1, the "remaining term of this agreement" shall include the remainder of the Code and the application then existing term of this Section 5.1, all determination as to present value shall use 120 percent of agreement plus the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeerenewal period.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided The Company shall pay and provide, in Section 5(b)exchange for the execution of this Agreement, upon the termination Executive with the following:
(a) Two (2) years’ base pay payable in equal installments each regular pay period during the two (2) years beginning with the first regular payroll date following the Effective Date, with the initial payment to occur, or be credited, on October 15, 2009. For purposes of Employee’s employment this calculation, base pay shall be calculated based on the rate of annual salary being paid by the Company other to Executive as of September 30, 2009. Because Executive is a “specified employee,” as such term is defined within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), payment of all amounts under this Section (a) shall be suspended for a period of six (6) months and one (1) day immediately following the Effective Date. Immediately thereafter, the Company shall pay to Executive all of the suspended payments under this Section (a), with interest accrued on such amounts at the prime rate (as published in the Wall Street Journal).
(b) Executive shall receive annual bonus payments, payable on the first and second anniversaries of the Effective Date, in an amount equal to fifty thousand dollars ($50,000).
(c) Reimbursement for the use of a cell phone in an amount comparable to the cell phone provided by the Company on the Effective Date for the two (2) years following the Effective Date;
(d) Continued participation in the Company’s group health, dental, and/or vision plan (“Health Plan”) during the two (2) year period following October 31, 2009. This coverage shall be provided as follows:
(i) During the initial eighteen (18) months immediately following October 31, 2009 each of Executive, his spouse and his covered dependents may enroll in COBRA as permitted under the Health Plan. If one or more of such individuals elect to enroll in COBRA, then Executive shall pay an amount equal to the subsidized cost of coverage paid by an active employee of the Company to receive such coverage.
(ii) During the period between May 1, 2011, and October 31, 2011, each of Executive, his spouse and his covered dependents may participate in the Health Plan by paying the full non-subsidized cost to receive such coverage. Nothing in this Section (d) shall be interpreted as limiting the right of Executive’s spouse and covered dependents to receive extended participation in the Company’s group health plan under COBRA in the event Executive elects to enroll in Medicare in a timely manner.
(e) Continued life insurance benefits from the Company during the two (2) year period following the Effective Date at a level of coverage that is equal to the coverage level provided to the Executive on September 30, 2009;
(f) Club dues paid for the two (2) years following the Effective Date that are equal to than for Cause those provided to the Executive immediately prior to the Effective Date;
(g) Continuation of banking services without service charge or at a Change reduced charge for the two (2) years following the Effective Date if any of these banking products were being utilized by the Executive immediately prior to his resignation;
(h) Payment of reasonable and customary business related expenses incurred through the last day of active employment, provided all receipts shall be submitted in Controlwriting to the Company within ninety (90) days following the Effective Date;
(i) Outplacement or executive search firm consulting services during the two (2) year period following the Effective Date, provided the total value of such services shall not exceed $20,000;
(j) Executive will be permitted to exercise the vested portion of his stock options during the ninety (90) day period immediately following the Effective Date. Executive agrees that the only vested stock option awards to which he is entitled are those listed on the attached Exhibit A.
(k) In the event that Executive (or his spouse or dependents) is enrolled in the Health Plan during the period designated in Section (d)(ii) above, the Employee Company shall reimburse Executive for a portion of the medical premium expenses that he incurs to purchase such continued medical coverage under the Health Plan, but only to the extent such expense is equal to the premium level that would be paid by an employee of the Company receiving the same level of coverage (which amount shall be entitled referred to herein as the “Medical Reimbursement”). In addition, the Company will pay Executive an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to Federal, state and local income taxes that Employee pays on the EmployeeMedical Reimbursement payments, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable additional Federal, state, state and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, taxes imposed on an afterEmployee due to such additional income tax gross-tax basis, of the greatest amount of the up payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within Company will pay the meaning of Section 6662 additional income tax gross-up amounts owed to Executive under this paragraph at the same time payments of the CodeMedical Reimbursement are made. The Company shall reimburse Executive for the expenses related to benefits provided under Subsections 2(f), (g), and (k) pursuant to Treasury Regulation Section 1.409A-3(i)(1)(iv)(A). For The availability of reimbursement under this paragraph in any calendar year will not be increased or decreased to reflect the purposes amount actually reimbursed in a prior or subsequent calendar year, and all reimbursements under this paragraph will be paid to Executive within twenty (20) days following the Company’s receipt of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basisrequest for reimbursement. The determination by the Accounting Firm Executive shall not be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company permitted to exchange this right of reimbursement for Cause cash or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsbenefit.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon If the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee Executive for Good Reason, then, subject to the Executive’s execution of a general waiver and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims agreement in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company’s customary form, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser Executive an amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise TaxSeverance Amount”), whichever ) equal to the sum of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect (x) his then current his base salary (without giving effect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code decrease in annual base salary which constituted Good Reason for Executive’s termination) and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (iiy) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, his target annual bonus as in effect on the Date of Termination, but if not otherwise specifiedin equal monthly installments, compounded on a semiannual basis. The determination by in accordance with the Accounting Firm shall be final and binding Company’s customary payroll practices, during the period beginning on the Company Date of Termination and ending on the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination first anniversary of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; provided, however, that no such payment shall be made following the first date that the Executive violates any covenant contained in Section 2 or 3 of the Non-Competition Agreement (iiand, if applicable, has failed to cure such violation within the cure period set forth in Section 2 or 3 of the Non-Competition Agreement). Notwithstanding the forgoing, if the Board (or its delegate) determines that the right to receive all benefits to which Executive is a “specified employee” within the Employee is vested on meaning of Section 409A(a)(2)(B) of the Internal Revenue Code as of the Date of Termination and that Section 409A of the Internal Revenue Code applies with respect to a payment to the Executive pursuant to this Section 3, one half of the Severance Amount shall be paid in a cash lump-sum on the six month anniversary of the Date of Termination (plus interest at the short-term applicable federal rate compounded semi-annually on all amounts to accrue from the date such payment would have been made but for the application of this proviso until the date of payment), with the other one-half of the Severance Amount payable to the Executive in accordance with the terms under Company’s customary payroll practices in equal monthly installments during the Company pension and welfare benefit plans or any successor period beginning on the six-month anniversary of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of TerminationTermination and ending on the first anniversary of the Date of Termination (but in no event shall any amount be payable following the first date that the Executive violates any covenant contained in Section 2 or 3 of the Non-Competition Agreement (and, if applicable, has failed to cure such violation within the cure period set forth in accordance with Section 2 or 3 of the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsNon-Competition Agreement)).
Appears in 1 contract
Sources: Severance Agreement (Goodman Global Holdings, Inc.)
Severance Payments. a. Except as provided in Section 5(b)If, upon during the termination of Employee’s employment by Term, the Company terminates your employment for any reason other than Cause, or you terminate your employment for Cause prior Good Reason, or your employment is terminated due to your death or Disability, or either party sends a Change in ControlNon-renewal Notice pursuant to Section 2 hereof, the Employee you shall be entitled to an amount equal receive the applicable payments and benefit coverage described in this Section 7 (the “Severance Payments”); subject to your delivery of a release in the aggregate form attached hereto as Exhibit E (the "Release”) within forty-five (45) days after your Termination Date.
(a) If, during the Term, the Company terminates your employment for any reason (other than Cause or as a result of one times: a Non-renewal Notice pursuant to Section 2 hereof) or you terminate your employment for Good Reason, you shall be entitled to receive the sum of:
(i) the annual rate of base salary then being paid an amount (less deductions required by law) equal to the Employee, plus three times (ii3x) the average of the past sum of (A) your Base Compensation for the last three (3) fiscal years short term bonus payof the Company (as reflected on the Company’s books for such fiscal years), plus (iiiB) your Bonus Compensation for the last three (3) fiscal years of the Company (as reflected on the Company’s portion books for such fiscal years); plus
(ii) an amount (less deductions required by law) equal to Three Million One Hundred Seventy-Eight Thousand Dollars ($3,178,000). The Company shall pay the amounts set forth in this Section 7(a) as follows: (x) seventy-five percent (75%) of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which such amounts shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day (A) thirty (30) days following the your Termination Date or (B) ten (10) days after you deliver to the closing Company the Release, regardless of whether the Company has signed the Release and (y) the remaining twenty-five percent (25%) of such amounts shall be paid on the event constituting the Change in Control, provided the conditions specified in Section 5(csecond (2nd) have been satisfiedanniversary of your Termination Date.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)) If your employment terminates as a result of your death or Disability or either party has sent a Non-renewal Notice pursuant to Section 2 hereof and this Agreement has not otherwise been terminated pursuant to any other provision hereof prior to the three (3)-year period after the date of any such Non-renewal Notice, the Company will not be obligated to make any payments to you or on behalf of Employee under Section 5(a) and (b)your beneficiary, personal or legal representatives or estate, as applicablethe case may be, unless shall be entitled to receive the sum of:
(i) Employee signs a release an amount (less deductions required by law) equal to one times (1x) the average of claims in favor the sum of (A) your Base Compensation for the last three (3) fiscal years of the Company (as reflected on the Company’s books for such fiscal years), plus (B) your Bonus Compensation for the last three (3) fiscal years of the Company (as reflected on the Company’s books for such fiscal years); plus
(ii) an amount (less deductions required by law) equal to Three Million One Hundred Seventy-Eight Thousand Dollars ($3,178,000). Notwithstanding the foregoing, in the event that a form as prepared Non-renewal Notice has been given by the Company prior to your death or Disability, in lieu of the one times (1x) multiple contained in Sections 7(b)(i) hereof, the “Release”multiple shall be the remaining number of years between the date of your death or Disability and the third anniversary of the date of the Non-renewal Notice, but in no event less than one (1) and delivered to Employee year. The Company shall pay the amounts set forth in this Section 7(b) as follows: (x) seventy-five percent (75%) of such amounts shall be paid in a lump sum no later than five business sixty (60) days following your Termination Date or, in the event of termination due to your Disability, on the later of (A) sixty (60) days following your Termination Date or (B) ten (10) days after you (or in the Termination Dateevent of your death, (iiyour personal or legal representative) all applicable consideration periods and rescission periods provided by law with respect deliver to the Release have expired without Employee rescinding Company the Release, regardless of whether the Company has signed the Release and (iiiy) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the sixremaining twenty-month delay requirement of section 409A(a)(2)(B)(ifive percent (25%) of the Code is not available, the Employee’s Severance Pay payments for such amounts shall be paid on the first six months following separation from service (1st) anniversary of your Termination Date; provided, however, that one hundred percent (100%) of such amounts shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards your personal or other compensation legal representatives or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company your estate in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local time periods set forth herein if your employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay due to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Dateyour death.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 two times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.,
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except (a) If Executive executes and does not revoke this Agreement, as provided in Section 5(bseverance payments, Company shall pay or provide to Executive:
(1) Four hundred and three thousand dollars ($403,300.00), upon less applicable deductions and withholdings, payable in twelve (12) substantially equal monthly installments, beginning on the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: sixtieth (i60th) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to day following the Termination Date (the aggregated amount“Payment Date”);
(2) if Executive is entitled to and elects continuation of group medical coverage required under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Severance PayCode”, “COBRA Coverage”), he will be reimbursed by Company for the portion of the applicable monthly premium required to be paid by Executive (and his eligible dependents) for COBRA Coverage, which reimbursement (y) shall be equal to the portion of the monthly premium paid by Company for group health coverage with respect to its active employees for the level of coverage provided to Executive and his dependents in the form of COBRA Coverage and (z) shall be provided for the lesser of (A) twelve (12) months following the Termination Date or (B) the period commencing on the date that COBRA Coverage begins and ending on the date that COBRA Coverage terminated by its terms. These amounts shall be paid to Employee by monthly; provided, however, that any portion of the Company over a amounts for the period of 12 months from beginning on the Termination Date in accordance with the Company’s regular payroll cycle, commencing and ending on the first regular payroll date of the Company that occurs more than 60 days after the Termination Payment Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following Payment Date;
(3) all equity awards shall vest and shall be exercisable, if applicable, in accordance with their terms as set forth in the Equity Plan or applicable award agreement; provided, however, that any stock options that were outstanding on July 13, 2013 and that are outstanding on the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(cshall remain exercisable for five (5) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days years after the Termination DateDate (or, if less, the expiration of the applicable stock option); and
(ii4) all applicable consideration periods outplacement services provided at the Company’s direct cost (and rescission periods provided not by law with respect reimbursement to Executive) by the Release have expired without Employee rescinding the Release, and (iii) Employee is firm of Challenger ▇▇▇▇ & Christmas in strict compliance accordance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to arrangement established with such firm by the Company, including without limitation the right for a period of up to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(ione (1) of the Code is not available, the Employee’s Severance Pay payments for the first six months year following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise (b) The payments described in this Paragraph 3 will not be counted as compensation for any Executive benefit plan or program.
(c) The payments described in this Paragraph 3 are provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with Section 4(b) of the terms under Employment Agreement and additional payments and benefits as agreed by the Company pension and welfare benefit plans or any successor are over and above that to which Executive is otherwise entitled upon the termination of such plan his employment from Company. A summary of outstanding equity awards and any other plan or agreement relating to retirement benefits; the vesting and (iii) the right to exercise and to receive all rights in which the Employee exercisability provisions applicable thereto is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsattached hereto as Attachment 1.
Appears in 1 contract
Severance Payments. a. Except (i) In the event of termination of the Employee by the Company without cause or termination of this Agreement by Employee pursuant to Section 4(b)(i) hereof, the Company shall: (A) pay to Employee an amount equal to one times the Employee's annual salary in effect at the time of termination (not giving effect to any salary reduction giving rise to such termination) and (B) either continue the Employee's health (medical and dental) insurance as provided in Section 5(b)5(c) for one year following the date of such termination to the extent permitted under applicable law and the Company's group health insurance policies or reimburse the Employee for her cost for comparable coverage to the extent such coverage cannot be provided under such policies. Such severance pay shall be payable in equal monthly installments over the one-year period beginning on the date of termination of this Agreement and shall be subject to tax withholding to the extent required under applicable law. Notwithstanding anything herein to the contrary, upon the Company shall not be required to continue to provide Employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. This severance pay and continuation of health benefits contemplated by this paragraph are agreed by the parties hereto to be in full satisfaction and compromise of any claim arising out of any termination of Employee’s 's employment without cause or pursuant to Section 4(b)(i).
(ii) Notwithstanding anything herein to the contrary, in the event of termination of the Employee by the Company other than for Cause prior to without cause within the two-year period following a Change in ControlControl or termination by Employee under Section 4(b)(i) or (ii) of this Agreement, then in lieu of the severance pay and benefit continuation provided in Section 4(d)(i) above, the Company shall: (A) pay to Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to and one-half times the Employee, plus 's annual salary in effect at the time of termination (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under not giving effect to any health, disability and life insurance plan or program in which the Employee was entitled salary reduction giving rise to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”such termination), which shall be paid to Employee by and (B) either continue the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date Employee's health (medical and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), dental) insurance as provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) for one and subject one-half years following the date of such termination to the limitation in Section 5(e), if (i) extent permitted under applicable law and the Employee’s employment is terminated by the Company without Cause Company's group health insurance policies or by reimburse the Employee for Good Reason, and (ii) her cost for comparable coverage to the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which extent such coverage cannot be provided under such policies. Such severance pay shall be paid to Employee by payable in equal monthly installments over the Company in a lump sum one and one-half year period beginning on the later date of 60th day following termination of this Agreement and shall be subject to tax withholding to the Termination Date or extent required under applicable law. Notwithstanding anything herein to the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)contrary, the Company will shall not be obligated required to make continue to provide employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. Notwithstanding anything herein to the contrary, the Company shall not be required to pay any payments to amount (the "Excess Amount") that, upon advice of the Company's independent tax advisor or on behalf counsel, would be in excess of Employee under Section 5(a) and (b)2.99 times Employee's Base Amount, as applicable, unless (i) Employee signs a release of claims defined in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(iSection 280G(b)(3) of the Internal Revenue Code is not availableof 1986, as amended (the Employee’s Severance Pay payments for "Code"), and, therefore, would trigger the first six months following separation from service shall be paid to tax (the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received "Excise Tax") imposed by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then unless Employee agrees to be bound by the amounts due under noncompetition provisions of Section 5(b) 7 hereof for one additional year following the termination. Payment of the Excess Amount shall be consideration for the Employee agreeing to be bound by such noncompetition provision for such additional year. Election by the Employee to receive the Excess Amount and to be bound by the noncompetition provision shall be given in writing to the Company not later than five days after the date on which the Company notifies Employee in writing that an Excess Amount may be payable absent such agreement and, upon receipt of such notice, the Company shall be obligated to pay the Excess Amount to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 two times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO FTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except as provided The Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the “Severance Payments”) upon the termination of the Employee’s employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated by the Employer without Cause following a Change in Control or by the Employee with Good Reason following a Change in Control, as the case may be, if (I) the Employee’s employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (II) the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately terminates his employment with Good Reason prior to a Change in Control and the Termination Date circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (iIII) the Employee’s employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to (i) the Employee’s Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based multiplied by three (3), and (ii) the average annual bonus, including but not limited to the Annual Bonus described in Exhibit A, earned by the Employee under the Employer’s annual incentive plan in the Employer’s three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs multiplied by three (3). In addition, Employee will be entitled to receive any unpaid compensation and/or compensation attributable to LTIP RS Awards (at the target grant value) that have not been issued as provided in, and pursuant to the terms of, Exhibit A through the remainder of the Term. Of the foregoing payments, an amount equal to one year’s Base Salary plus one year’s Annual Bonus shall be in consideration of and allocated to Employee’s obligations under Section 13.2.
(B) For the a period beginning on the Date occurs within 24 months of Termination and ending at the end of the Term, as it may be extended, the Employer shall arrange to provide the Employee with life, disability, accident and health insurance benefits substantially similar to those which the Employee is receiving immediately following prior to the Notice of Termination (without giving effect to any amendment to such benefits made subsequent to a Change in Control, which amendment adversely affects in any manner the Employee’s entitlement to or the amount of such benefits); provided, however, that, unless the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a)consents to a different method, which such health insurance benefits shall be paid to Employee provided through a third-party insurer. Benefits otherwise receivable by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Employee pursuant to this Section 5(c10.1(B) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not shall be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Employee without limitation cost during the right to seek specific performance or an injunction.
d. If, when benefit period following the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, (and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be such benefits actually received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay made available to the Employee shall be either (i) reported to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt Employer by the Employee). Notwithstanding the foregoing, on an after-tax basis, of the greatest amount of the payment notwithstanding that all any benefits or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made payments provided under this Section 5(e10.1(B) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employmentfollowing: (i) the payment amount of expenses eligible for reimbursement or benefits provided under this Section 10.1(B) during any taxable year of the Employee’s base salary and Employee may not affect the expenses eligible for reimbursement or the benefits to be provided to the Employee in any other form or type of compensation earned, vested and payable through the Date of Terminationtaxable year; (ii) the right to receive all benefits to reimbursement of an eligible expense must be made on or before the last day of the Employee’s taxable year following the taxable year in which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefitsexpense was incurred; and (iiiiii ) the right to exercise and reimbursement or such benefits may not be subject to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans liquidation or programs, or any successor to any such plans or programsexchange for another benefit.
Appears in 1 contract
Severance Payments. a. Except 6.1. Subject to Section 6.2 and Section 6.3 hereof, if the Executive has a Separation from Service following a Change in Control and during the Term either by the Company or by the Executive, other than (a) by the Company for Cause, (b) by reason of death or Disability, or (c) by the Executive without Good Reason (any such Separation from Service being hereafter sometimes referred to as a “Compensable Termination”), then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”), in addition to any payments and benefits to which the Executive is entitled under Sections 5 and 6.3 hereof. Notwithstanding the foregoing, the Executive shall not be eligible to receive any payment or benefit provided for in this Section 6.1 until the Executive shall have executed a release substantially in the form of Exhibit A hereto effective as of the date of the Compensable Termination or a date subsequent thereto and shall not have revoked said release. No later than the latest date for payment provided for in Section 5(b)6.2, upon the termination Executive must have properly executed the release and returned it to the Company, and such release must have become fully effective and irrevocable. If that condition is not met, the Executive shall not be entitled at any time to any payment or benefit provided for in this Section 6.1. The Severance Payments are in lieu of Employee’s employment by any severance benefits that would otherwise be payable or provided pursuant to any severance plan or practice of the Company other than for Cause prior those payments and benefits to a Change in Control, which the Employee shall be Executive is entitled to an amount equal to the aggregate of one times: under Sections 5 and 6.3 hereof.
(i) The Company shall pay the Executive, at the time provided in Section 6.2 below, a lump sum cash payment equal to _______ times (____ x) the Executive’s annual rate of base salary then being paid to at the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program rate in which the Employee was entitled to participate effect immediately prior to the Compensable Termination Date or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason (the aggregated amount, the “Severance PayBase Salary”).
(ii) The Company shall pay the Executive, which shall at the time provided in Section 6.2 below, a lump sum cash payment equal to _______ times (___ x) the full amount of the Executive’s target level bonus (as may be paid to Employee by the Company over a period of 12 months from the Termination Date defined in accordance with the Company’s regular payroll cycle, commencing on short-term incentive plan (or similar plan)) for the first regular payroll date fiscal year of the Company that in which the Compensable Termination occurs more than 60 or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason.
(iii) The Company will pay the Executive for all earned but unused vacation leave at the time of the Compensable Termination.
6.2. All payments to be made pursuant to subsections (i) through (iii) of Section 6.1 above shall be made within 45 calendar days after the date on which a Compensable Termination Date (occurs. It is the intention of the parties that the condition of a Compensable Termination constitutes a “substantial risk of forfeiture” within the meaning of the Treasury Regulations under section 409A of the Code and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject payments pursuant to the limitation in Section 5(e), if subsection (i) through (iii) of Section 6.1 above meet the Employee’s employment is terminated by “short-term deferral” exception under such Treasury Regulations; and the Company without Cause parties shall interpret this Agreement accordingly.
6.3. In the event that the severance and other benefits provided for in this Agreement or by otherwise payable to Executive (i) constitute “parachute payments” within the Employee for Good Reasonmeaning of Section 280G of the Code, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall would be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect subject to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined imposed by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), then Executive’s benefits under this Agreement shall be either
(i) delivered in full, or
(ii) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable Federalfederal, state, state and local employment taxes, income taxes, taxes and the Excise Tax, results in the receipt by the Employee, Executive on an after-tax after−tax basis, of the greatest amount of the payment benefits, notwithstanding that all or some portion of the payment such benefits may be taxable under Section 4999 of the Code. In the event the amounts due under Section If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are reduceddelivered to a lesser extent, the amounts shall be reduced reduction will occur in the following order order: reduction of priority: firstcash payments, with respect cancellation of equity awards granted within the twelve (12) month period prior to a “change in control” (as determined under Code Section 280G) that are deemed to have been granted contingent upon the change in control (as determined under Code Section 280G), cancellation of accelerated vesting of equity awards, reduction of employee benefits. Unless the Company and Executive otherwise agree in writing, any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations determination required to be made under this Section 5(e) shall be made in writing by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax independent public accountants (the “Accounting FirmAccountants”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G and 4999 of the Code. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall cause bear all costs the Accounting Firm to provide detailed supporting Accountants may reasonably incur in connection with any calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under contemplated by this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the EmployeeSection.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. 3.01. Except as provided in Section 5(b3.03, below, and provided that the Executive’s termination occurs on or after January 1, 2016, regardless of the reason for his termination the Company shall pay the Executive in lieu of any further salary payments or bonuses to the Executive for any periods subsequent to his termination, and in lieu of any severance benefits otherwise payable to the Executive under any prior agreement or Company-established severance plan, as follows:
(a) An amount equal to the greater of $400,000 or one (1) year of the Executive’s salary at the base salary rate in effect as of the date of his termination; and
(b) An amount equal to the Executive’s target Non-Plan Award for the calendar year in which his employment terminates, if any, multiplied by a fraction (the “Applicable Fraction”), upon the termination numerator of Employeewhich is the number of days in such calendar year that the Executive was an employee of the Company, and the denominator of which is 365; and
(c) an amount equal to the payment, if any, that the Executive would have been paid in respect of his Plan Award for the calendar year in which his employment terminates had the Executive been employed by the Company for the entire calendar year, multiplied by the Applicable Fraction; provided, however, that the amount payable to the Executive under clauses (b) and (c) of this Section shall not exceed, in the aggregate, the Applicable Fraction multiplied by the maximum aggregate annual incentive award that could have been payable to him for the year in which his employment terminates had he been employed by the Company for the entire calendar year. “Subject to the provisions of Sections 6.04 and 6.05, the amount set forth in clause (a) of this Section shall be payable in advance in four equal quarterly installments commencing with the Date of Termination and on each succeeding 90th day thereafter, subject to Section 21(a); the amount set forth in clause (b) of this Section shall be payable in accordance with Section 21(a); and the amount set forth in clause (c) of this Section shall be payable, if at all, on the later of the date six months after the date of the Executive’s separation from service and the date when similar annual incentive awards under the Company’s Key Executive Incentive Bonus Plan, or if not then in effect, granted under any similar plan, (the “Plan”) are paid to other senior executives of the Company who have remained in its employ throughout such calendar year. Notwithstanding the foregoing, if the Executive’s employment terminates in a termination described in this Section 3.01 during a calendar year before the terms of annual award opportunities for such year shall have been established under the Plan or any other annual incentive program for the year of termination, such year of termination, then for the purposes of this Section 3.01 (a) his target Non-Plan Award for such year of termination shall be deemed to be his target Non-Plan Award for the immediately preceding calendar year, if any (adjusted for his current salary), and (b) his Plan Award for such year of termination shall be determined by assuming the same dollar pay-out opportunities (expressed as a percentage of his then current salary) as the Executive had under his Plan Award for the immediately preceding calendar year, but with performance based on the Company performance goals established under the Plan for the year of termination.
3.02. In addition to the amounts provided for in Section 3.01, above, the Executive will be entitled to the following:
(a) Until 18 months from the Date of Termination, Executive (and, to the extent applicable, Executive’s dependents) shall continue to be covered, at the Company’s expense, under the Company’s medical, dental and hospital insurance plans and until twelve (12) months from the Date of Termination, Executive shall continue to be covered, at the Company’s expense, under the Company’s group life and accidental death and dismemberment insurance plans; provided that if Executive is provided with comparable coverage by a successor employer any such coverage by the Company shall cease;
(b) All payments to which the Executive has vested rights as of the date of his termination under any employee benefit, disability, insurance and similar plans which provide for payments beyond the period of employment, except for any benefits provided under severance plan or program established or maintained by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the CompanyExecutive’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b)Continuity Agreements, as applicableamended; and
(c) All unpaid amounts, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance respect of any Non-Plan Award or Plan Award for any calendar year ending before the calendar year in which the Date of Termination occurs, which would have been payable had Executive remained in the Company’s employ until such Bonus would have been paid
3.03. The Executive will be (1) paid an annual base salary of $525,000 for the 2015 calendar year, and (2) entitled to payment of his Plan Award and Non-Plan Award, if any, for the 2015 year with an aggregate target equal to 100% of his 2015 base salary to the extent earned and payable under the terms of all awards the Plan and with the actual payment based on the same ratio to target as the other Executive Vice President’s of the Company actual Bonuses bear to their target Bonus, and such payment for the period will be made at the same time that such payments are made generally to other senior executives who participate in the Plan (the “2015 Incentive Payment”). The Executive’s participation in the LTIP beyond December 31, 2015 (that is, for periods beginning in calendar year 2016 and beyond), if any, must be approved by the Company’s Board of Directors or the Compensation Committee thereof. In the event the Board (or Compensation Committee) in its discretion does not grant the Executive an award in 2016 under the LTIP for the performance period 2016-2018 based on the Executive’s 2015 rate of salary (notwithstanding any different rate of salary in 2016) and salary multiplier in effect during 2015 (it being understood that whether or not to make such in award is in the sole discretion of the Board of Directors or the Compensation Committee thereof), the Executive may elect to terminate his employment with the Company. In the event the Company does not pay the Executive the 2015 annual base salary described above, the Board does not grant the Executive the LTIP restricted stock purchase unit award in January 2016 and stock incentive plans performance based cash award in respect to the period commencing January 1, 2016 as described above (it being understood that whether or programsnot to make such in award is in the sole discretion of the Board of Directors or the Compensation Committee thereof), or any successor the Board does not cause the Company to any pay to the Executive the 2015 Incentive Payment, as described above, the Executive may elect to terminate his employment with the Company. If such plans election is made prior to April 1, 2016, or programsif later at the time the 2015 Bonus payment is made (and only if such election is made prior to April 1, 2016 or if later at the time the 2015 Incentive Payment is made), this Third Amended Severance Agreement will have no force and effect and, instead, all of the provisions of the Amended Severance Agreement, as amended prior to January 1, 2016, shall apply, including, but not limited to Articles 3, 4 and 5.” “4 INTENTIONALLY OMITTED” “5 INTENTIONALLY OMITTED”
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon 2.1 If the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s Executive's employment is terminated during the Term (a) by the Company without Cause (as defined below) or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to ) by reason of death or on behalf of Employee under Section 5(a) and Disability (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(bdefined below), then the Company shall pay to Employee only his base salary the Executive the amounts, and any accrued but unused vacation or PTO earned through provide the Termination DateExecutive the benefits, described in Section 2.2 (the "Severance Payments").
g. In addition (a) The Company shall pay to the benefits otherwise provided Executive as severance, an amount in Section 5, the Employee shall be entitled cash equal to the following benefits and payments upon the Employee’s termination sum of employment: (i) the payment of the Employee’s Executive's base salary as in effect for the fiscal year ending immediately prior to the fiscal year in which such termination occurs, and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right annual bonus (if any) earned by the Executive pursuant to receive all any annual bonus or incentive plan maintained by the Company in respect of the fiscal year ending immediately prior to the fiscal year in which the termination occurs, such cash amount to be paid to the Executive ratably monthly in arrears over the Non-Competition Period (as defined below).
(b) for the 12-month period immediately following such termination, the Company shall arrange to provide the Executive and his dependents insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the date of termination, at no greater cost to the Executive than the cost to the Executive immediately prior to such date. Benefits otherwise receivable by the Executive pursuant to this Section 2.2(b) shall cease immediately upon the discovery by the Company of the Executive's breach of the covenants contained in Sections 5 or 6 hereof. In addition, benefits otherwise receivable by the Executive pursuant to this Section 2.2(b) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the 12-month period following the Executive's termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the date of termination.
2.3 Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state, or local law and any additional withholding to which the Employee is vested on Executive has agreed.
2.4 If the Date of Termination in accordance Executive's employment with the terms under Company terminates during the Term, the Executive shall not be required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating pursuant to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsthis Section 2.
Appears in 1 contract
Sources: Severance Agreement (Rayovac Corp)
Severance Payments. a. Except as provided in Section 5(b), upon the (a) Upon any termination of Employeethe Executive’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee Executive for Good Reason, the Company shall pay as severance to the Executive an amount equal to six months’ of base salary with escalation to a maximum of 9 months, increasing by one (1) month at the end of each subsequent service anniversary date for 3 years. For the avoidance of doubt, the maximum severance payable under this provision shall be 9 months irrespective of the length of service of the Executive. The Company shall pay the Cash Severance Amount over a number of months immediately following the Date of Termination equal to the Employment Years (the “Severance Period”), in equal installments as nearly as practicable, on the normal payroll dates for employees of the Company generally but in no event less frequently than monthly. Any amounts payable pursuant to this Section 6(a) shall not be paid until the first scheduled payment date following the date the release contemplated in Section 6(d) is executed and no longer subject to revocation, with the first such payment being in an amount equal to the total amount to which the Executive would otherwise have been entitled during the period following the Date of Termination if such deferral had not been required; provided, however, that any such amounts that constitute nonqualified deferred compensation within the meaning of Code Section 409A shall not be paid until the sixtieth (60th) day following such termination to the extent necessary to avoid adverse tax consequences under Code Section 409A, and, if such payments are required to be so deferred, the first payment shall be in an amount equal to the total amount to which the Executive would otherwise have been entitled during the period following the Date of Termination if such deferral had not been required; provided, further, that, if the Executive is a “specified employee” within the meaning of Code Section 409A, any amounts payable to the Executive under this Section 6(a) during the first six (6) months and one (1) day following the Date of Termination that constitute nonqualified deferred compensation within the meaning of Code Section 409A shall not be paid until the date that is six (6) months and one ( 1) day following such termination to the extent necessary to avoid adverse tax consequences under Code Section 409A, and, if such payments are required to be so deferred, the first payment shall be in an amount equal to the total amount to which the Executive would otherwise have been entitled to during the period following the Date of Termination if such deferral had not been required.
(b) In the event of any termination of the Executive’s employment (i) by the Company for Cause, or (ii) due to the Termination Date occurs within 24 months immediately following a Change in ControlExecutive’s death or Disability, the Employee Executive shall not be entitled to any severance or other payments or benefits as of the Date of Termination (except as required by applicable law) and all rights to receive 2.99 times a salary, benefits or other compensation shall terminate as of the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later Date of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified except as set forth in Section 5(c) have been satisfied7.
c. Notwithstanding (c) If the foregoing provisions Executive breaches any provision of Section 5(a) and (b)Sections 8 through 11 hereof, the Company will not shall no longer be obligated to make any payments or reimbursements or provide any benefits pursuant to or on behalf of Employee this Section 6.
(d) The Company’s obligations under this Section 5(a) and (b), as applicable, unless 6 shall be contingent upon (i) Employee signs the delivery by the Executive of a complete release of claims in favor of the Company Company, its subsidiaries, affiliates, and respective officers, directors, employees, principals, managers, partners, members, attorneys and representatives, in a substantially the form attached hereto as prepared by Annex A, within twenty-one (21) days after the Date of Termination and (ii) the Executive not revoking such release.
(e) In the event that the Company fails to pay any of the amounts set forth in Section 6(a) within five (the “Release”5) and delivered to Employee no later than five business days after the Termination Datedate when due, the overdue amounts shall accrue interest at a rate equal to five (ii5%) all applicable consideration periods per year until such overdue amounts and rescission periods provided by law with respect interest are paid. If the Executive dies during the postponement period prior to the Release have expired without Employee rescinding the Release, and (iii) Employee is payment in strict compliance with the terms full of this Agreement as of the dates of the payments. The cessation of these payments will be amounts set forth in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occursSection 6(a), the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service unpaid amounts shall be paid to the Employee in a single lump sum on the first day personal representative of the seventh month after the month in which the EmployeeExecutive’s separation from service occursestate when due.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other (f) The payments and the value of any benefit received or to be received by the Employee under this Agreement would result provided in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e6(a) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the payments and benefits otherwise provided set forth in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs7 hereof.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one two times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Severance Agreement (Alerus Financial Corp)
Severance Payments. a. Except 6.1 Subject to Section 6.2 hereof and subject to Executive entering into a release of claims in substantially the form attached hereto as provided Appendix I, the Company shall pay the Executive the payments and provide the benefits described in this Section 5(b), 6.1 ("Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control during the term of this Agreement, in addition to the payments and benefits described in Section 5.0 hereof, unless such termination is (A) by the Company other than for Cause prior Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason. The Executive's employment shall be deemed to have been terminated following a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated Control by the Company without Cause or by the Employee for Executive with Good Reason, and (ii) Reason if the Termination Date occurs within 24 months immediately following Executive's employment is terminated prior to a Change in ControlControl without Cause at the direction (or action which constitutes a direction) of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control or if the Executive terminates his employment with Good Reason prior to a Change in Control (determined by treating a Potential Change in Control as a Change in Control in applying the definition of Good Reason) if the circumstance or event which constitutes Good Reason occurs at the direction (or action which constitutes a direction) of such Person.
(i) Subsequent to the Date of Termination, the Employee Company shall receive 2.99 times make cash severance payments to the Severance Pay calculated Executive over a thirty-six (36) month period in accordance with Section 5(a)substantially equal bi-weekly installments, which shall be paid in an amount equal to Employee by the Company sum of (a) the higher of the Executive's annual base salary in a lump sum on effect immediately prior to the later occurrence of 60th day following the Termination Date or the closing on the event constituting or circumstance upon which the Notice of Termination is based or in effect immediately prior to the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)) the higher of the highest annual bonus paid to the Executive in the three years preceding the year in which the Date of Termination occurs or paid in the three years preceding the year in which the Change in Control occurs.
(ii) For a thirty-six (36) month period after the Date of Termination, the Company will not be obligated shall arrange to make provide the Executive with medical and dental insurance benefits substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any payments reduction in such benefits subsequent to or on behalf of Employee under Section 5(a) and (ba Change in Control which reduction constitutes Good Reason), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared . Benefits otherwise receivable by the Company (the “Release”Executive pursuant to this Section 6.1(ii) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect shall be reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Executive without limitation cost during the right to seek specific performance or an injunction.
d. If, when thirty-six (36) month period following the Employee’s Executive's termination of employment occurs(and any such benefits actually received by the Executive shall be reported to the Company by the Executive). If the benefits provided to the Executive under this Section 6.1(ii) shall result in a decrease, pursuant to Section 6.2, in the Change in Control Payments and these Section 6.1(ii) benefits are thereafter reduced pursuant to the immediately preceding sentence because of the receipt of comparable benefits, the Employee is a specified employee within Company shall, at the meaning time of section 409A such reduction, pay to the Executive the lesser of (a) the amount of the Code, and if decrease made in the Severance Pay would be considered deferred compensation under section 409A of Payments pursuant to Section 6.2, or (b) the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the seventh month after the month in which the Employee’s separation from service occursCode.
e. In 6.2 Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result Executive in all connection with a Change in Control or a portion of such payment being subject to excise tax under Section 4999 the termination of the CodeExecutive' s employment (whether or not received pursuant to the terms of this Agreement) (all such payments and benefits, including but not limited to the Severance Payments, being hereinafter called the "Total Payments") would be subject in whole or in part to the Excise Tax, then the amounts due under Section 5(b) that the Company Severance Payments shall pay be reduced to the Employee shall be either (i) extent, but only to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent, necessary so that would result in no portion of the payment being Total Payments is subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax; provided, results in that no such reduction shall be effected unless the receipt by the Employee, on an after-tax basis, of the greatest net amount of the payment notwithstanding that all or some portion Total Payments after such reduction in the Severance Payments and after deduction of the payment may net amount of federal, state and local income taxes on such reduced Total Payments would be taxable under Section 4999 greater than the excess of (a) the net amount of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced Total Payments without such reduction in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A Severance Payments but after deduction of the Code net amount of federal, state and regulations promulgated thereunderlocal income taxes (other than the Excise Tax) on such unreduced Total Payments, disregard over (b) the acceleration Excise Tax to which the Total Payments are subject. The determination as to whether a reduction in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required Severance Payments is to be made under this Section 5(e) 6.2 and, if so, the amount of any such reduction shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately 's auditors or by such other firm of certified public accountants, benefits consulting firm or legal counsel as the Board may designate prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”)Change in Control. The Company shall cause provide the Accounting Firm to provide detailed supporting executive with its calculations of its determinations the amounts referred to in this Section 6.2 and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations.
6.3 The Company also shall pay to the Company Executive all legal fees and Employee. Notice must be given expenses incurred by the Executive as a result of a termination which entitles the Executive to the Accounting Firm Severance Payments (including all such fees and expenses, if any, incurred in disputing any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). Such payments shall be made within 15 five (5) business days after an event entitling Employee to an amount due under this Agreement. All delivery of the Executive's written requests for payment accompanied with such evidence of fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination incurred as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeereasonably may require.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Executive Officer Change in Control Agreement (Polycom Inc)
Severance Payments. a. Except as provided in Section 5(b)In addition to paying Employee his salary through January 21, upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control2006, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay Employee the following amounts (subject to any applicable federal, state and local tax withholding requirements) in full and complete satisfaction of all amounts due Employee under the Employment Agreement:
a) The Company shall pay Employee shall be either $282,500.00 on or before January 21, 2006 in full satisfaction of any and all amounts due under the Employment Agreement, including but not limited, amounts payable under Sections 4(b) and 12(b) of the Employment Agreement, severance, medical benefits, and reimbursements.
b) An additional 30,000 shares of Employee’s Restricted Award (i) as that term is used in the full payment or (ii) such lesser amount determined by Employment Agreement and the Company in accordance with this Section 5(eRestricted Stock Grant Agreement, effective as of November 4, 2004) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code are currently not vested shall vest and become non-forfeitable on January 21, 2006 (the “Excise TaxAccelerated Shares”). All shares comprising the Restricted Award not otherwise vested as of January 21, whichever 2006 shall be forfeited pursuant to the Employment Agreement and paragraph 6 of the foregoing amounts, taking into account Restricted Stock Grant Agreement. The Restricted Stock Grant Agreement is hereby amended consistent with the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results above.
c) The parties shall reasonably cooperate in the receipt by certification or recertification, to the Employee, on an after-tax basisextent required, of the greatest amount of Restricted Stock Grant and the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the CodeAccelerated Shares. In the event the amounts due under Section are reduced, the amounts Employee shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations return to the Company the shares of Employee's Restricted Award that are currently not vested and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling will not become vested on or before January 21, 2006.
d) Employee to an amount due agrees that he shall have no further rights under this Agreement. All fees and expenses Section 2 of the Accounting Firm shall be borne solely by Registration Rights Agreement between the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeeparties.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Separation Agreement (Franklin Credit Management Corp/De/)
Severance Payments. a. Except (a) If the Company terminates the Executive's employment without Just Cause or the Executive terminates his employment for Good Reason, in either case prior to the end of the Term (or the Extension Term, as provided in Section 5(bapplicable), upon the termination of Employee’s employment by or if the Company other than for Cause prior to delivers a Change in ControlNon-Extension Notice on or before March 31, 2005, the Employee shall be entitled Company will provide the Executive the following benefits (but without any mitigation of the Company's liability to an amount the Executive):
(i) For a severance period equal to the aggregate remainder of one times: the Term (isubject to a minimum severance period of 18 months and a maximum severance period of 30 months), (A) continuing base salary (at the annual rate payable as of the date of termination), (B) an annual bonus equal to 50% of annual base salary then being (to be paid to at the Employeetime other senior executive bonuses are paid), plus and (iiC) the average of the past three years short term bonus paycontinuing medical, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability dental and life insurance plan or program in which coverage (on terms substantially comparable to those provided to the Employee was entitled to participate Executive and his covered dependents immediately prior to the Termination Date termination of his employment);
(ii) Any earned but unpaid Annual Bonus for the aggregated amountyear prior to the year in which the Executive's termination of employment occurs, and any other previously earned and accrued entitlements and benefits from the “Severance Pay”Company or its affiliates (including any entitlements under applicable Company or affiliate benefit plans, programs or policies), which shall be paid to Employee ;
(iii) If the Executive is terminated by the Company over without Just Cause effective prior to July 1, 2002, a period full Annual Bonus for the fiscal year (or the first half of 12 months the fiscal year, in the case of 2002) in which such termination takes place;
(iv) If the Executive terminates his employment for Good Reason effective prior to July 1, 2002, a pro-rated Annual Bonus for the fiscal year (or the first half of the fiscal year, in the case of 2002) in which such termination takes place, based on the length of the Executive's employment for that fiscal year;
(v) If the Executive's employment terminates on or after July 1, 2002, he shall be considered for a pro-rated annual incentive bonus for the fiscal year in which such termination of employment is effective;
(vi) Full vesting of all stock options then held by the Executive that are granted to the Executive by True North on or after January 1, 2000 (including the stock options granted to the Executive concurrent with entering into the January 1, 2000 Amendment to the Agreement);
(vii) Full vesting of all restricted stock then held by the Executive that was previously or is in the future granted to the Executive by True North (including the restricted stock granted to the Executive concurrent with entering into the January 1, 2000 Amendment to the Agreement); and
(viii) Each stock option granted to the Executive by True North on or after January 1, 2000 (including the stock options granted to the Executive concurrent with entering into the January 1, 2000 Amendment to the Agreement) then held by the Executive shall be exercisable by the Executive for up to three years after the date of termination of employment, but in no case beyond the 10-year term of such stock option. it being understood that, other than pursuant to clauses (i)-(viii) above, the Executive shall have no interest in or right to receive from the Termination Date in accordance with the Company’s regular payroll cycleCompany or its affiliates any other entitlement, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfiedbenefit or bonus.
b. Notwithstanding Section 5(a(b) and subject to If the limitation in Section 5(e), if (i) the Employee’s Executive's employment is terminated by the Company without for Just Cause or by if the Employee Executive terminates his employment for any reason other than for Good Reason, the Executive will receive only the amounts and benefits specified in Paragraph 4(a)(ii) hereof.
(iic) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on In the event constituting of the Change in ControlExecutive's death or disability, provided the conditions as specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (bParagraph 3(b), the Company Executive, his heirs, distributees and legal representatives will not be obligated to make any payments to or on behalf of Employee under Section 5(areceive only the amounts and benefits specified in Paragraph 4(a)(ii) hereof and (b), as applicable, unless (i) Employee signs a release of claims in favor the pro rata portion of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments Annual Bonus for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month year in which the Employee’s separation from service Executive's death or disability occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Employment Agreement (True North Communications Inc)
Severance Payments. a. Except as provided 6.1 Subject to Section 6.2 hereof, the Company shall pay the Executive the payments described in this Section 5(b), 6.1 ("Severance Payments") upon the termination of Employee’s the Executive's employment following a Change in Control during the term of this Agreement, in addition to the payments and benefits described in Section 5.0 hereof, unless such termination is (A) by the Company other than for Cause, or (B) by reason of Death or Disability. The Executive's employment shall be deemed to have been terminated following a Change in Control by the Company without Cause if the Executive's employment is terminated prior to a Change in Control without Cause at the direction (or action which constitutes a direction) of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control.
(i) Subsequent to the Date of Termination, the Employee Company shall be entitled make cash severance payments to the Executive over a twelve (12) month period in substantially equal bi-weekly installments, in an amount equal to one (1) times the aggregate sum of one times: (ia) the higher of the Executive's annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate effect immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date occurrence of the Company that occurs more than 60 days after event or circumstance upon which the Notice of Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified is based or in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject effect immediately prior to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)) the higher of the highest annual bonus paid to the Executive in the three years preceding the year in which the Date of Termination occurs or paid in the three years preceding the year in which the Change in Control occurs.
(ii) For a twelve (12) month period after the Date of Termination, the Company will not be obligated shall arrange to make any payments provide the Executive with medical and dental insurance benefits substantially similar to or those which the Executive is receiving on behalf the same premium cost share basis immediately prior to the Notice of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared Termination. Benefits otherwise receivable by the Company (the “Release”Executive pursuant to this Section 6.1(ii) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect shall be reduced to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law extent comparable benefits are actually received by or in equity made available to the Company, including Executive without limitation cost during the right to seek specific performance or an injunction.
d. If, when twelve (12) month period following the Employee’s Executive's termination of employment occurs(and any such benefits actually received by the Executive shall be reported to the Company by the Executive). If the benefits provided to the Executive under this Section 6.1(ii) shall result in a decrease, pursuant to Section 6.2, in the Change in Control Payments and these Section 6.1(ii) benefits are thereafter reduced pursuant to the immediately preceding sentence because of the receipt of comparable benefits, the Employee is a specified employee within Company shall, at the meaning time of section 409A such reduction, pay to the Executive the lesser of (a) the amount of the Code, and if decrease made in the Severance Pay would be considered deferred compensation under section 409A of Payments pursuant to Section 6.2, or (b) the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day Executive without being, or causing any other payment to be, nondeductible by reason of section 28OG of the seventh month after the month in which the Employee’s separation from service occursCode.
e. In 6.2 Notwithstanding any other provisions of this Agreement, in the event that the vesting, acceleration and any payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result Executive in all connection with a Change in Control or a portion of such payment being subject to excise tax under Section 4999 the termination of the CodeExecutive' s employment (whether or not received pursuant to the terms of this Agreement) (all such payments and benefits, including but not limited to the Severance Payments, being hereinafter called the "Total Payments") would be subject in whole or in part to the Excise Tax, then the amounts due under Section 5(b) that the Company Severance Payments shall pay be reduced to the Employee shall be either (i) extent, but only to the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) extent, necessary so that would result in no portion of the payment being Total Payments is subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax; provided, results in that no such reduction shall be effected unless the receipt by the Employee, on an after-tax basis, of the greatest net amount of the payment notwithstanding that all or some portion Total Payments after such reduction in the Severance Payments and after deduction of the payment may net amount of federal, state and local income taxes on such reduced Total Payments would be taxable under Section 4999 greater than the excess of (a) the net amount of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced Total Payments without such reduction in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A Severance Payments but after deduction of the Code net amount of federal, state and regulations promulgated thereunderlocal income taxes (other than the Excise Tax) on such unreduced Total Payments, disregard over (b) the acceleration Excise Tax to which the Total Payments are subject. The determination as to whether a reduction in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required Severance Payments is to be made under this Section 5(e) 6.2 and, if so, the amount of any such reduction shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately 's auditors or by such other firm of certified public accountants, benefits consulting firm or legal counsel as the Board may designate prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”)Change in Control. The Company shall cause provide the Accounting Firm to provide detailed supporting executive with its calculations of its determinations the amounts referred to in this Section 6.2 and such supporting materials as are reasonably necessary for the Executive to evaluate the Company's calculations.
6.3 The Company also shall pay to the Company Executive all legal fees and Employee. Notice must be given expenses incurred by the Executive as a result of a termination which entitles the Executive to the Accounting Firm Severance Payments (including all such fees and expenses, if any, incurred in disputing any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). Such payments shall be made within 15 five (5) business days after an event entitling Employee to an amount due under this Agreement. All delivery of the Executive's written requests for payment accompanied with such evidence of fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination incurred as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employeereasonably may require.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Severance Payments. a. Except as provided in Section 5(b), upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal Subject to the aggregate provisions of one times: (d) below and the other terms and conditions of this Letter Agreement, in the event during the Term (i) the annual rate of base salary then being paid to the EmployeeCompany terminates Executive's employment without cause, plus (ii) the average Executive terminates his employment with good reason within twelve months following a Change of the past three years short term bonus payControl, plus (iii) Executive's employment terminates as a result of Executive's death or disability, or (iv) Executive terminates his employment due to the Company’s portion 's failure to diligently pursue the Target Business (any of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amountforegoing being a "Severance Termination"), the “Severance Pay”)Company will provide Executive the following benefits, which shall be paid the only severance benefits or other payments with respect to Employee by Executive's employment with the Company over to which Executive shall be entitled. Without limiting the generality of the foregoing, these benefits are in lieu of all salary (except for salary for periods ending on the date of termination), accrued vacation and other rights Executive may have against the Company or its affiliates.
(a) After a period Severance Termination, any UPA Payments shall cease immediately upon such termination and Executive will receive (i) his base salary for the remainder of 12 months from the Termination Date Term and (ii) at the discretion of the Board of Directors of the Company, any projected "bonus" (determined in accordance with Section 8 hereof) for the Company’s regular payroll cycleremainder of the Term.
(b) Upon a Severance Termination, commencing (i) Executive will be able to exercise any options previously issued to him which have become exercisable on or before the termination date until the earlier of (A) the first anniversary of the date of termination or (B) the expiration date of the option; (ii) Executive will receive a pro rata portion of the Business Establishment Grant (rounded down to the nearest whole number) determined by multiplying the Business Establishment Grant by a fraction (rounded to two decimal places), the numerator of which is the number of complete months of Continued Service during the Term, and the denominator of which is 12, but in no event shall such pro rata portion be fewer than 75,000 shares, and such shares shall be fully vested on the date of termination; and (iii) on the first regular payroll anniversary of the date of such termination, Executive will receive (A) the Company Business Participant Grant, if any, to which Executive would otherwise have been entitled had his Continued Service not so terminated, for the calendar year in which such termination occurs and (B) a pro rata portion of the Business Participant Grant for the following calendar year commencing on January 1 of such calendar year and ending on the first anniversary of the date of such termination; provided, however, that if the Severance Termination occurs more than 60 days after by reason of Executive's termination of his employment for good reason within twelve months following a Change of Control, then clause (iii) above will not apply and the Termination Date provisions under the caption "Change of Control" under Schedule A will apply. Such pro rata portion of the Business Establishment Grant and such Business Participant Grants (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions or portion thereof) specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(aclauses (ii) and subject to (iii) above shall be fully vested on the limitation in Section 5(e)date of grant. For purposes of this paragraph, if (i) "Business Participant Grant for the Employee’s employment is terminated by following year commencing on January 1 of such calendar year and ending on the Company without Cause or by first anniversary of the Employee date of such termination" means the Business Participant Grant Executive would have received if the Incremental Growth in Clinical Services Revenue for Good Reasonthe period from January 1 of the calendar year following the year in which the Severance Termination occurs through the first anniversary of the date of such termination was annualized for the entire year, and (ii) the Termination Date occurs within 24 months immediately following "pro rata portion" means the number of days in such year up to and including the date of the first anniversary of such termination divided by the total number of days in that full calendar year.
(c) Upon a Change in ControlSeverance Termination, Executive will receive continued coverage under the Employee shall receive 2.99 times the Severance Pay calculated Company's medical and health plans in accordance with Section 5(aCOBRA rules and regulations following the termination date for the remainder of the Term (including any period as may be required by law), which shall provided that coverage will end if Executive obtains comparable coverage from a subsequent employer or otherwise ceases to be paid eligible for COBRA benefits. If Executive ceases to Employee by be eligible for COBRA because the Company in a lump sum on does not pay the later of 60th day following the Termination Date premiums for its existing or group insurance policy or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) Company ceases to have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)a group healthcare plan, the Company will not pay Executive, for any portion of the period referred to above during which Executive's COBRA eligibility ceases for such reasons, the amount of the premium it would have had to pay for Executive's coverage under the then existing, or if none, the most recently existing, healthcare insurance policy. Executive should consult with the Company's Manager of Human Resources concerning the process for assuming ownership of and continued premium payments for any life insurance policy. Executive will be obligated to make any payments to or reimbursed in accordance with Company policies promptly for all of Executive's reasonable and necessary business expenses incurred on behalf of Employee under the Company prior to Executive's termination date.
(d) All compensation and benefits described above in (a) through (c) of this Section 5(a) and (b), as applicable, unless 6 will be contingent upon (i) Employee signs Executive's execution of a release of all claims against the Company substantially in favor the form of Exhibit A and expiration of the Company seven-day revocation period referred to in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Daterelease, (ii) all applicable consideration periods and rescission periods provided Executive's not engaging in any Competition (as defined in Section 7 of this Letter Agreement) with the Company during the period of his employment by law with respect to the Release have expired without Employee rescinding Company or the ReleaseTerm, and (iii) Employee is Executive's not engaging in strict compliance with the terms any Solicitation (as defined in Section 7 of this Agreement as Letter Agreement) during the period of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of his employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company or the Term.
(e) The Company will pay Executive the amount described in accordance (a) above in equal monthly installments with this Section 5(e) that would result in no portion of the first payment being subject payable on the date when the seven-day revocation period referred to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, below with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”)release expires. The Company shall cause will prepare the Accounting Firm final release (which will be substantially in the form attached as Exhibit A to provide detailed supporting calculations of its determinations this Letter Agreement) and deliver it to the Company and Employee. Notice must be given to the Accounting Firm Executive within 15 five business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s Executive's termination of employment: . Executive will have twenty-one (i21) days in which to consider the payment release although Executive may execute it sooner. Please note that the release has a revocation period of seven days.
(f) In this Letter Agreement, the term "cause" means (a) Executive's failure to adhere to any written policy of the Employee’s base salary Company if Executive has been given a reasonable opportunity to comply with such policy and any other form or type cure Executive's failure to comply (which reasonable opportunity to cure must be granted for a period of compensation earned, vested and payable through the Date of Terminationten days); (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Employment Agreement (Chromavision Medical Systems Inc)
Severance Payments. a. Except as provided The Severance Pay set forth in Section 5(b)Sections 1.1, upon the termination of Employee’s employment by the Company other than for Cause prior to a Change in Control1.3, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability 1.8 and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which 1.9 shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cyclepractices or benefit policies, commencing on the first regular payroll date of the Company as applicable; provided, however, that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if no event: (i) shall the Employeepayment of such Severance Pay commence until after the Severance and Settlement Agreement becomes final and binding and (ii) except as set forth otherwise in the second to last sentence of this Section 1.4, shall any element of the Severance Pay be paid earlier than the date that is six (6) months following the Executive’s separation from service (within the meaning of Code Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), unless the Executive is not a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) immediately prior to such separation from service. If there is any delay in the payment of any element of the Severance Pay due to the operation of the preceding sentence, then once the conditions to payment of such element have been met such payments will begin in accordance with the Company’s regular payroll practices; provided that any amounts which would have been paid previous thereto but for the delay imposed by the preceding sentence will be paid in a lump sum to the Executive as soon as such conditions to payment are met. Any and all applicable federal, state and local taxes and withholdings shall be withheld from any Severance Pay. Notwithstanding the delay on the payment of Severance Pay imposed by subsection (ii) of the first sentence of this Section 1.4, following such time as the Severance and Settlement Agreement becomes final and binding, but prior to the date that is six (6) months following the Executive’s separation from service, the Executive shall be entitled to such of the medical, dental and other benefits provided by Section 1.3 of this Agreement as do not constitute nonqualified deferred compensation subject to Code Section 409A. If the Executive’s employment is terminated by the Company without Without Cause or by the Employee Executive for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following but such termination does not constitute a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee separation from service” within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b409A(a)(2)(A)(i), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall Executive will still be entitled to the following benefits payments otherwise called for by Section 1.1 of this Agreement, but such payments will be made in the manner called for by this Section 1.4 beginning after such time as the Executive does have a “separation of service”, and the amount of such payments upon will be computed under Section 1.1 as if the Employee’s Executive had had a “separation from service” on the date of such termination of employment: (i) the payment Without Cause or for Good Reason.”
3. Section 1.8 of the Employee’s base salary Agreement is deleted and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination replaced in accordance its entirety with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.following:
Appears in 1 contract
Severance Payments. a. Except as provided in In addition to the amounts payable under Section 5(b4(f)(i), upon in the termination of Employee’s employment by event Noble terminates the Company other than for Executive without Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by not include a termination under Section 4(a)) or the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee Executive resigns for Good Reason, and subject to Executive executing within thirty (ii30) days following such termination of employment, and not subsequently revoking, a general release of all claims arising under this Agreement or otherwise related to Executive’s employment by Noble, which release shall be in substantially the form attached as Exhibit A to the Prior Employment Agreement (as amended or revised to comport with changes in applicable law), and subject to the Executive abiding in all material respects by his obligations under Sections 5, 6, 7, and 8 of the Agreement, Noble will provide the Executive with the following payments:
(A) the Termination Date occurs within 24 greater of (I) a cash amount equal to six (6) months immediately of his Salary following the date of the Executive’s termination of employment or (II) a Change in Controlcash amount equal to the Salary he would have received had he remained employed through June 19, the Employee 2009, less taxes and withholdings, which amount shall receive 2.99 times the Severance Pay calculated be paid in accordance with Section 5(athe normal payroll practices of Noble over the six (6) month period or period up to June 19, 2009, as applicable, following the date of Executive’s termination of employment (the “Salary Continuation”); and
(B) reimbursement (or direct payment to the carrier), which shall be paid to Employee by for the Company in a lump sum period ending on the later of 60th day June 19, 2009 or six (6) months following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the EmployeeExecutive’s termination of employment occurs(the “Continuation Period”), the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject the premium costs incurred by Executive (and his spouse and dependents, where applicable) to excise tax under Section 4999 obtain COBRA coverage pursuant to one of the Codegroup health plans sponsored by Noble (or a Noble Company), then which reimbursement (or direct payment) shall equal the amounts due premium costs incurred by Noble (or a Noble Company, if applicable), for the Continuation Period, on behalf of a similarly-situated employee, to obtain coverage under Section 5(bthe same group health plan sponsored by Noble (or a Noble Company, if applicable) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting FirmHealth Care Continuation”). The Company shall cause Notwithstanding anything in the Accounting Firm to provide detailed supporting calculations of its determinations foregoing to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority contrary, (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d1) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee Executive shall be entitled to receive the following benefits and payments upon Health Care Continuation only if Executive is participating in a group health plan sponsored by Noble (or a Noble Company) as of the Employee’s date on which Executive incurs a termination of employment: , and (i2) the payment Executive shall be responsible, during the Continuation Period, for premium costs for COBRA coverage in excess of the Employee’s base salary Health Care Continuation, and any other form or type of compensation earnedthe Executive shall be responsible, vested and payable through after the Date of Termination; (ii) Continuation Period, for all premium costs for COBRA coverage, if the right Executive continues to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of elect such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsCOBRA coverage.
Appears in 1 contract
Sources: Employment Agreement (Noble Environmental Power LLC)
Severance Payments. a. Except as provided in Section 5(b)After the date of such termination, upon the termination of Employee’s employment by the Company other than shall, for Cause prior to a Change in Controlperiod of six (6) months following the date of such termination, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) continue to pay the annual Employee at a rate of base salary then being paid to based on the Employee’s then-current Base Salary and target annual bonus, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date installments in accordance with the Company’s regular standard payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date practices (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Dateas in effect immediately prior to such termination), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, pay the Employee shall receive 2.99 times and the Severance Pay calculated Employee’s dependents’ COBRA premiums under all Company-sponsored group health plans (other than the Company’s Flexible Spending Account) that such individuals are enrolled in accordance with Section 5(a), which shall be paid to Employee by at the time of such termination (unless the Company determines in a lump sum its sole discretion that such payment of COBRA premiums could result in the imposition of any addition tax on the later of 60th day following the Termination Date or the closing on the event constituting the Change Employee, in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), which case the Company will not be obligated to make any payments to or on behalf instead reimburse the Employee for the cost of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall dependents’ COBRA premiums, with such reimbursement to be paid to the Employee in a single lump sum on the first day made within thirty (30) days of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of date such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”premiums are made), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the such termination occurs within one (1) year following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control of Control, then such payments and secondbenefits shall continue for a period of six (6) months after the date of such termination. Notwithstanding the foregoing, with respect to any amount that constitutes the “deferral of compensation” however, (A) payments and benefits under Section 409A of the Code clauses (i) and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is terminate immediately upon the Company’s outside auditor immediately prior to date the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm Employee commences to provide detailed supporting calculations of its determinations services to the Company another entity for compensation, whether present or deferred, and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to provide the following benefits and payments upon the Employee’s termination of employment: (i) the payment Company with written notice of the Employee’s base salary acceptance of such a service provider position within three (3) days thereof and any other form or type of compensation earned, vested and payable through the Date of Termination; (B) benefits under subsection (ii) shall cease on the right to receive all benefits to which date that the Employee is vested on (or the Date of Termination in accordance with the terms Employee’s dependents, as applicable) ceases to be eligible for COBRA continuation coverage under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsnormal COBRA rules.
Appears in 1 contract
Sources: Employment Agreement (Monolithic Power Systems Inc)
Severance Payments. a. Except as provided Following a Change in Section 5(b)Control of the Company, upon if, during the termination of Employee’s employment by the Company other than for Cause prior to a thirty-six (36) months following such Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment Executive is terminated by the Company without Cause or by (ii) Executive terminates employment with the Employee Company (or its successor or assigns) for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on shall pay and provide Executive each of the later following:
(a) Within five (5) business days after the effective date of 60th day following such termination of employment (the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b"Effective Date"), the Company (or its successor or assigns) will not be obligated pay Executive a lump sum cash payment equal to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless the greater of:
(i) Employee signs a release seven hundred and fifty thousand dollars ($750,000);
(ii) three (3) times the average annual compensation that was includible in Executive's gross income during each of claims in favor the five (5) full fiscal years immediately prior to the Effective Date.
(b) Executive and his dependents shall continue to be covered for thirty-six (36) months after the Effective Date by all survivor rights, insurance and benefit programs of the Company (or its successor or assigns) in a form as prepared type and amount at least equivalent to that provided to him and his dependents by the Company immediately prior to the Change of Control; provided that if participation in any one or more of such arrangements is not possible under the terms thereof, the Company (or its successor or assigns) will provide substantially identical benefits outside of the programs. The cost of this coverage will be paid by the Company (the “Release”or its successor or assigns).
(c) and delivered to Employee no later than five business days after the Termination Date, (ii) If all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as or any portion of the dates of amounts payable to Executive under this Section 6, either alone or together with other payments which Executive has the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available right to receive from the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee constitute "excess parachute payments" (within the meaning of section 409A Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid that are subject to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined imposed by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”or similar tax and/or assessment), whichever the Company (or its successor or assigns) shall increase the amounts payable pursuant to Section 6(a) above to the extent necessary to place Executive in the same after-tax position as he would have been in had no such excise tax been imposed on the payments hereunder. The determination of the foregoing amountsamount of any such excise taxes shall initially be made by the independent accounting firm employed by the Company immediately prior to the Change in Control. If, taking into account at a later date, it is determined that the applicable Federalamount of excise taxes payable by Executive is greater than the amount initially so determined, state, and local employment then the Company (or its successor or assigns) shall pay Executive an amount equal to the sum of (i) such additional excise taxes, income taxes(ii) any interest, fines and penalties resulting from such underpayment, plus (iii) an amount necessary to reimburse Executive for any income, excise or other taxes payable by Executive with respect to the amount specified in (i) and (ii) above, and the Excise Tax, results in reimbursement provided by this (iii). Upon the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result occurrence of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunderCompany, disregard if during the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a six (6) months following such Change in Control first with respect to Company funded amounts and then the Employee’s deferralsControl, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s Executive terminates employment with the Company is terminated by the Company for Cause (or for any reason not covered by Section 5(aits successor or assigns) or 5(b)without Good Reason, then within five (5) business days after the Effective Date, the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through Executive an amount equal to twenty percent (20%) of the Termination Date.
g. In addition to the benefits otherwise provided amount described in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i6(a) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programsabove.
Appears in 1 contract
Severance Payments. a. Except (i) In the event of termination of the Employee by the Company without cause or termination of this Agreement by Employee pursuant to Section 4(b)(i) hereof, the Company shall: (A) pay to Employee an amount equal to one times the Employee's annual salary in effect at the time of termination (not giving effect to any salary reduction giving rise to such termination) and (B) either continue the Employee's health (medical and dental) insurance as provided in Section 5(b)5(c) for one year following the date of such termination to the extent permitted under applicable law and the Company's group health insurance policies or reimburse the Employee for his cost for comparable coverage to the extent such coverage cannot be provided under such policies. Such severance pay shall be payable in equal monthly installments over the one-year period beginning on the date of termination of this Agreement and shall be subject to tax withholding to the extent required under applicable law. Notwithstanding anything herein to the contrary, upon the Company shall not be required to continue to provide Employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. This severance pay and continuation of health benefits contemplated by this paragraph are agreed by the parties hereto to be in full satisfaction and compromise of any claim arising out of any termination of Employee’s 's employment without cause or pursuant to Section 4(b)(i).
(ii) Notwithstanding anything herein to the contrary, in the event of termination of the Employee by the Company other than for Cause prior to without cause within the two-year period following a Change in ControlControl or termination by Employee under Section 4(b)(i) or (ii) of this Agreement, then in lieu of the severance pay and benefit continuation provided in Section 4(d)(i) above, the Company shall: (A) pay to Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to and one-half times the Employee, plus 's annual salary in effect at the time of termination (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under not giving effect to any health, disability and life insurance plan or program in which the Employee was entitled salary reduction giving rise to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”such termination), which shall be paid to Employee by and (B) either continue the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date Employee's health (medical and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), dental) insurance as provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) for one and subject one-half years following the date of such termination to the limitation in Section 5(e), if (i) extent permitted under applicable law and the Employee’s employment is terminated by the Company without Cause Company's group health insurance policies or by reimburse the Employee for Good Reason, and (ii) his cost for comparable coverage to the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which extent such coverage cannot be provided under such policies. Such severance pay shall be paid to Employee by payable in equal monthly installments over the Company in a lump sum one and one-half year period beginning on the later date of 60th day following termination of this Agreement and shall be subject to tax withholding to the Termination Date or extent required under applicable law. Notwithstanding anything herein to the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)contrary, the Company will shall not be obligated required to make continue to provide employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. Notwithstanding anything herein to the contrary, the Company shall not be required to pay any payments to amount (the "Excess Amount") that, upon advice of the Company's independent tax advisor or on behalf counsel, would be in excess of Employee under Section 5(a) and (b)2.99 times Employee's Base Amount, as applicable, unless (i) Employee signs a release of claims defined in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(iSection 280G(b)(3) of the Internal Revenue Code is not availableof 1986, as amended (the Employee’s Severance Pay payments for "Code"), and, therefore, would trigger the first six months following separation from service shall be paid to tax (the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received "Excise Tax") imposed by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then unless Employee agrees to be bound by the amounts due under noncompetition provisions of Section 5(b) 7 hereof for one additional year following the termination. Payment of the Excess Amount shall be consideration for the Employee agreeing to be bound by such noncompetition provision for such additional year. Election by the Employee to receive the Excess Amount and to be bound by the noncompetition provision shall be given in writing to the Company not later than five days after the date on which the Company notifies Employee in writing that an Excess Amount may be payable absent such agreement, and, upon receipt of such notice, the Company shall be obligated to pay the Excess Amount to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Employment Agreement (Compdent Corp)
Severance Payments. a. Except (i) In the event of termination of the Employee by the Company without cause or termination by Employee pursuant to Section 4(b)(i) hereof, the Company shall: (A) pay to Employee an amount equal to two times the Employee's annual salary in effect at the time of the termination (not giving effect to any salary reduction giving rise to such termination) plus two times the greater of (1) the average bonus received by the Employee for the last three fiscal years (or such shorter time if Employee has been employed by the Company for less than three years) or (2) the bonus earned by Employee for the most recently ended fiscal year and (B) either continue the Employee's health (medical and dental) insurance as provided in Section 5(b)5(c) for two years following the date of such termination to the extent permitted under applicable law and the Company's group health insurance policies or reimburse the Employee for his cost for comparable coverage to the extent such coverage cannot be provided under such policies. Such severance pay shall be payable in equal monthly installments over the two-year period beginning on the date of termination of this Agreement and shall be subject to tax withholding to the extent required under applicable law. Notwithstanding anything herein to the contrary, upon the Company shall not be required to continue to provide Employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. This severance pay and continuation of health benefits contemplated by this paragraph are agreed by the parties hereto to be in full satisfaction and compromise of any claim arising out of any termination of Employee’s 's employment without cause or pursuant to Section 4(b)(i).
(ii) Notwithstanding anything herein to the contrary, in the event of termination of the Employee by the Company other than for Cause prior to without cause within the two-year period following a Change in ControlControl or termination by Employee under Section 4(b)(i), (ii), or (iii) of this Agreement, then in lieu of the severance pay and benefit continuation provided in Section 4(d)(i) above, the Company shall: (A) pay to Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to three times the Employee, 's annual salary in effect at the time of the termination (not giving effect to any salary reduction giving rise to such termination) plus three times the greater of (ii1) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which received by the Employee was entitled to participate immediately prior to for the Termination Date three fiscal years preceding such termination (the aggregated amount, the “Severance Pay”), which shall be paid to or such shorter time if Employee has been employed by the Company over a period of 12 months from for less than three years) or (2) the Termination Date in accordance with bonus earned by Employee for the Company’s regular payroll cyclemost recently ended fiscal year, commencing on (B) either continue the first regular payroll date of the Company that occurs more than 60 days after the Termination Date Employee's health (medical and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), dental) insurance as provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject for three years following the date of such termination to the limitation in Section 5(e), if extent permitted under applicable law and the Company's group health insurance policies or reimburse the Employee for his cost for comparable coverage to the extent such coverage cannot be provided under such policies and (iC) pay to Employee the prorated portion of the greater of (1) the Employee’s employment is terminated by the Company without Cause or average bonus received by the Employee for Good Reason, and the three fiscal years preceding such termination (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the or such shorter time if Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee has been employed by the Company for less than three years) or (2) the bonus earned by Employee for the most recently ended fiscal year. Such severance pay shall be payable in a lump sum equal monthly installments over the three-year period beginning on the later date of 60th day following termination of this Agreement and shall be subject to tax withholding to the Termination Date or extent required under applicable law. Notwithstanding anything herein to the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b)contrary, the Company will shall not be obligated required to make continue to provide Employee with health benefits under this paragraph if Employee becomes entitled to receive benefits substantially similar to those which Employee otherwise would have been entitled to receive hereunder. Notwithstanding anything herein to the contrary, the Company shall not be required to pay any payments to amount (the "Excess Amount") that, upon advice of the Company's independent tax advisor or on behalf counsel, would be in excess of Employee under Section 5(a) and (b)2.99 times Employee's Base Amount, as applicable, unless (i) Employee signs a release of claims defined in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(iSection 280G(b)(3) of the Internal Revenue Code is not availableof 1986, as amended (the Employee’s Severance Pay payments for "Code"), and, therefore, would trigger the first six months following separation from service shall be paid to tax (the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received "Excise Tax") imposed by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then unless Employee agrees to be bound by the amounts due under noncompetition provisions of Section 5(b) 7 hereof for one additional year following the termination. Payment of the Excess Amount shall be consideration for the Employee agreeing to be bound by such noncompetition provision for such additional year. Election by the Employee to receive the Excess Amount shall be given in writing to the Company not later than five days after the date on which the Company notifies Employee in writing that an Excess Amount may be payable absent such agreement, and, upon receipt of such notice, the Company shall be obligated to pay the Excess Amount to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
Appears in 1 contract
Sources: Employment Agreement (Compdent Corp)
Severance Payments. a. Except (A) If there shall be a Change In Control (as provided in Section 5(b), upon the termination defined below) of Employee’s employment by the Company between April 1, 2000 and January 1, 2001, and within three (3) years of the Change In Control, the Company shall terminate the Executive's employment other than for Cause prior to a Change in ControlCause, death, or Disability, or the Employee Executive shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s terminate his employment is terminated by the Company without Cause or by the Employee for Good Reason, and (ii) the Termination Date occurs within 24 months immediately following a Change in Control, the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(a), which shall be paid to Employee by the Company in a lump sum on the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay the following severance payments and benefits (collectively, the "BENEFITS") to the Employee shall be either Executive:
(i) The Executive's base salary through and including the full payment or (ii) such lesser amount determined by Date of Termination at the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s (ii) An amount equal to two (2) times the Executive's annual base salary at the highest rate in effect during the twelve (12) month period preceding the Date of Termination.
(iii) An amount equal to two (2) times the average amount paid to the Executive over the prior three (3) years in connection with the Company's Management Profit Sharing Plan for Executive Personnel ("EPS") or any successor or replacement to the EPS.
(iv) An amount equal to the product of (a) the amount which Executive would have been entitled to under the EPS, or under any successor or replacement to the EPS, if Executive had been employed the entire calendar year in which the termination occurred and (b) a fraction, the numerator of which is the number of days of Executive's employment with the Company is terminated by the 2 Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s year of termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable employment through the Date of Termination; , and the denominator of which is 365.
(iiv) In the right to receive all benefits to which the Employee is vested on the Date case of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; compensation previously deferred by the Executive, all amounts previously deferred, and not yet paid by the Company.
(iiivi) the right to exercise and to receive all rights in which the Employee is vested on For two (2) years following the Date of Termination, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive at no increase in the rate or amount of contribution by the Executive and/or his family (other than an increase resulting from a change to the benefit plan(s) of the Company in which the Executive is a participant that applies generally to all participants in the plan) all medical, prescription, dental, disability, and life insurance programs, and allowances for automobiles and country clubs, and other benefits generally available to all members of senior management of the Company, in effect in the twelve (12) month period preceding the Date of Termination; provided, however, that the Company may amend any benefit or benefit plan generally applicable to its employees so long as the amendment treats the Executive in the same manner as the other employees of the Company, including other executives of the Company, covered by the benefit or benefit plan.
(B) The Benefits under Sections 1(A)(i) and 1(A)(iii) shall be paid in a lump sum no later than the thirtieth (30th) day following the Date of Termination. The Benefits under Section 1(A)(ii) shall be paid monthly. The Benefits under Section 1(A)(iv) shall be paid concurrently when payments are made to other participants in the EPS or any successor or replacement to the EPS for the year in question. The Benefits under Sections 1(A)(v) shall be payable in accordance with the terms of all awards the deferred compensation plan (if any). Premiums for the Benefits under Section 1(A)(vi) shall be paid on or before their due dates.
(C) For purposes of determining the Executive's benefits under any Company stock purchase of the Company's nonqualified supplemental employee retirement plans ("SERPs"), the Executive shall be credited with two (2) additional years of service and stock incentive plans shall be credited with additional earnings in an amount equal to those Benefits that would have been treated as earnings under the SERPs if they had been received by the Executive while he was an employee of the Company. For purposes of the SERPs, the Benefits shall be treated as having been paid to the Executive at such time or programstimes as they would have been paid to the Executive if he had remained as an employee of the Company.
(D) All Benefits shall be subject to normal withholdings for federal, state, and local taxes and other payroll deductions required by applicable law or any successor to any such plans or programsregulation.
Appears in 1 contract
Sources: Severance Benefits Agreement (Stanadyne Automotive Corp)
Severance Payments. a. Except as provided Subject in all events to the provisions of Section 5(b), upon 3(c)(ii)(f) above:
(a) If the termination of EmployeeExecutive’s employment by the Company other than for Cause prior to a Change in Control, the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e), if (i) the Employee’s employment is terminated by the Company without Cause pursuant to Section 4(a)(iv), or by the Employee Executive’s resignation for Good ReasonReason pursuant to Section 4(a)(v), the Company shall provide the Executive with the following payments and benefits, subject to Section 12; provided, however, that payments and benefits provided pursuant to this Agreement shall be contingent upon the Executive’s execution and expiration of the revocation period without revocation, within sixty (60) days following the effective Date of Termination, of a general waiver and release of claims by the Executive against the Company and its affiliates substantially in the form attached hereto as Exhibit B, and such amounts shall be paid or commence to be paid (unless due later pursuant to Section 12(b)) on the sixtieth (60th) day following the Date of Termination (with a lump sum payment of any installments due prior to such date paid as part of the initial payment):
(i) a payment equal to the Benefit Amount; provided, however, that such severance payment shall be in lieu of notice or any other benefits to which the Executive might otherwise be entitled. The payment shall be paid in equal installments over the Severance Period, in accordance with the normal payroll practices of the Company;
(ii) the Termination Date Annual Bonus for the year in which such termination occurs within 24 months immediately following a Change (based on the Company’s performance in Controlrelation to the applicable performance targets, as determined in good faith by the Employee shall receive 2.99 times the Severance Pay calculated in accordance with Section 5(aCompensation Committee), which shall be paid to Employee multiplied by the Company in a lump sum on Pro-Rate Factor (as applicable to the later of 60th day following Executive’s employment with the Termination Date or Company) and paid at such time as the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) Annual Bonus would otherwise have been satisfied.paid;
c. Notwithstanding the foregoing provisions of Section 5(a) and (b), the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor of the Company in a form as prepared by the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available a monthly amount equal to the Companyapplicable COBRA premiums for the Executive and dependents including medical, including without limitation dental and prescription drug coverage for the right to seek specific performance or an injunction.
d. If, when Executive and dependents for the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption period from the six-month delay requirement Date of section 409A(a)(2)(B)(i) Termination until the earlier of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall be paid to the Employee in a single lump sum on the first day of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment end of the Severance Period or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of date on which the payment being subject Executive becomes eligible to excise tax under Section 4999 of the Code receive comparable benefits from a subsequent employer (the “Excise TaxCovered Period”); provided, whichever of however, that if there are any delayed payment requirements for the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all first sixty (60) days or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy six (ii6) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days months after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specifiedthe amounts for such period shall be payable in lump sum immediately after the end of the delay; and
(b) Upon a termination of the Executive’s employment pursuant to Section 4(a)(i) the Executive’s estate will receive payment of the Benefit Amount, compounded on paid in a semiannual basislump sum within thirty (30) days after the date of such event. The determination by the Accounting Firm shall be final Company may, at its election and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b)at its own expense, then the Company shall obtain insurance to pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. such Benefit Amount. In addition to the benefits otherwise provided in Section 5foregoing, the Employee shall Executive’s estate will be entitled to the following benefits payments described in Sections 5(a)(ii) and payments upon the Employee’s (iii).
(c) Upon a termination of employment: (i) the Executive’s employment pursuant to Section 4(a)(ii), the Executive will receive payment of the Employee’s base salary and any other form or type Benefit Amount, paid in equal installments over a period of compensation earned, vested and payable through the Date of Termination; twenty-four (ii24) the right to receive all benefits to which the Employee is vested months beginning on the Date date of Termination the Disability, furnished to the Executive pursuant to a Disability salary continuation benefit program to be maintained by the Company. In addition to the foregoing, Executive will be entitled to the payments described in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; Sections 5(a)(ii) and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs).
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Severance Payments. a. Except as provided Subject to Section 10.2 hereof, the Employer shall pay the Employee the payments described in this Section 5(b), 10.1 (the "Severance Payments") upon the termination of the Employee’s 's employment following a Change in Control and prior to the end of the Change-in-Control Protective Period, in addition to any payments and benefits to which the Employee is entitled under Sections 5, 6, 7 and 8.1 hereof, unless such termination is (i) by the Company other than Employer for Cause, (ii) by reason of death or Disability, or (iii) by the Employee without Good Reason. For purposes of this Agreement, the Employee's employment shall be deemed to have been terminated by the Employer without Cause prior to following a Change in Control or by the Employee with Good Reason following a Change in Control, as the Employee shall be entitled to an amount equal to the aggregate of one times: (i) the annual rate of base salary then being paid to the Employee, plus (ii) the average of the past three years short term bonus pay, plus (iii) the Company’s portion of 12 months’ premiums under any health, disability and life insurance plan or program in which the Employee was entitled to participate immediately prior to the Termination Date (the aggregated amount, the “Severance Pay”), which shall be paid to Employee by the Company over a period of 12 months from the Termination Date in accordance with the Company’s regular payroll cycle, commencing on the first regular payroll date of the Company that occurs more than 60 days after the Termination Date (and including any installment that would have otherwise been paid on regular payroll dates during the period of 60 days following the Termination Date), provided the conditions specified in Section 5(c) have been satisfied.
b. Notwithstanding Section 5(a) and subject to the limitation in Section 5(e)case may be, if (i) the Employee’s 's employment is terminated without Cause prior to a Change in Control and such termination was at the request or direction of a Person who has entered into an agreement with the Employer the consummation of which would constitute a Change in Control, (ii) the Employee terminates his employment with Good Reason prior to a Change in Control and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Employee's employment is terminated by the Company Employer without Cause prior to a Change in Control (but following a Potential Change in Control) and such termination is otherwise in connection with or in anticipation of a Change in Control which actually occurs. For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Employee shall be presumed to be correct unless the Employer establishes to the Committee by clear and convincing evidence that such position is not correct.
(A) In lieu of any further salary payments to the Employee for Good Reasonperiods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Employer shall pay to the Employee a lump sum severance payment, in cash, equal to three (3) times the sum of (i) the higher of the Employee's Base Salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or the Employee's Base Salary in effect immediately prior to the Change in Control, and (ii) the higher of the annual bonus earned by the Employee in respect of the Employer's fiscal year immediately preceding that in which the Date of Termination occurs or the average annual bonus so earned in respect of the three fiscal years immediately preceding that in which the Change in Control occurs.
(B) Notwithstanding any provision of any annual incentive plan to the contrary, the Employer shall pay to the Employee a lump sum amount, in cash, equal to the sum of (i) any annual incentive compensation which has been allocated or awarded to the Employee for a completed fiscal year preceding the Date of Termination and which, as of the Date of Termination, is contingent only upon the continued employment of the Employee to a subsequent date, and (ii) a pro rata portion to the Date of Termination of a deemed annual bonus for the Employer's fiscal year in which the Date of Termination occurs, calculated by multiplying (i) the higher of the annual bonus earned by the Employee with respect to the immediately preceding fiscal year or the average annual bonus earned by the Employee with respect to the immediately preceding three fiscal years of the Employer by (ii) the fraction obtained by dividing the number of days in the fiscal year of the Employer in which termination occurs within 24 months up to and including the Date of Termination by 365.
(C) For the thirty-six (36) month period immediately following the Date of Termination, the Employer shall arrange to provide the Employee with life, disability, accident and health insurance benefits substantially similar to those which the Employee is receiving immediately prior to the Notice of Termination (without giving effect to any amendment to such benefits made subsequent to a Change in Control, which amendment adversely affects in any manner the Employee's entitlement to or the amount of such benefits); PROVIDED, HOWEVER, that, unless the Employee consents to a different method (after taking into account the effect of such method on the calculation of "parachute payments" pursuant to Section 10.2 hereof), such health insurance benefits shall be provided through a third-party insurer. Benefits otherwise receivable by the Employee pursuant to this Section 10.1(C) shall be reduced to the extent comparable benefits are actually received by or made available to the Employee without cost during the thirty-six (36) month period following the Employee's termination of employment (and any such benefits actually received by or made available to the Employee shall receive 2.99 times be reported to the Employer by the Employee). If the Severance Pay calculated in accordance with Section 5(a), which Payments shall be paid decreased pursuant to Employee by Section 10.2 hereof, and the Company in a lump sum on Section 10.1(C) benefits which remain payable after the later of 60th day following the Termination Date or the closing on the event constituting the Change in Control, provided the conditions specified in Section 5(c) have been satisfied.
c. Notwithstanding the foregoing provisions application of Section 5(a10.2 hereof are thereafter reduced pursuant to the immediately preceding sentence because of the receipt or availability of comparable benefits, the Employer shall, at the time of such reduction, pay to the Employee the least of (a) and the amount of the decrease made in the Severance Payments pursuant to Section 10.2 hereof, (b), ) the Company will not be obligated to make any payments to or on behalf of Employee under Section 5(a) and (b), as applicable, unless (i) Employee signs a release of claims in favor amount of the Company subsequent reduction in a form as prepared by these Section 10.1(C) benefits, or (C) the Company (the “Release”) and delivered to Employee no later than five business days after the Termination Date, (ii) all applicable consideration periods and rescission periods provided by law with respect to the Release have expired without Employee rescinding the Release, and (iii) Employee is in strict compliance with the terms of this Agreement as of the dates of the payments. The cessation of these payments will be in addition to, and not as an alternative to, any other remedies at law or in equity available to the Company, including without limitation the right to seek specific performance or an injunction.
d. If, when the Employee’s termination of employment occurs, the Employee is a specified employee within the meaning of section 409A of the Code, and if the Severance Pay would be considered deferred compensation under section 409A of the Code, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) of the Code is not available, the Employee’s Severance Pay payments for the first six months following separation from service shall maximum amount which can be paid to the Employee in a single lump sum on the first day without being, or causing any other payment to be, nondeductible by reason of the seventh month after the month in which the Employee’s separation from service occurs.
e. In the event that the vesting, acceleration and payment of any equity awards or other compensation or benefits, together with all other payments and the value of any benefit received or to be received by the Employee under this Agreement would result in all or a portion of such payment being subject to excise tax under Section 4999 of the Code, then the amounts due under Section 5(b) that the Company shall pay to the Employee shall be either (i) the full payment or (ii) such lesser amount determined by the Company in accordance with this Section 5(e) that would result in no portion of the payment being subject to excise tax under Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into account the applicable Federal, state, and local employment taxes, income taxes, and the Excise Tax, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the payment notwithstanding that all or some portion of the payment may be taxable under Section 4999 of the Code. In the event the amounts due under Section are reduced, the amounts shall be reduced in the following order of priority: first, with respect to any amount that does not constitute the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control and second, with respect to any amount that constitutes the “deferral of compensation” under Section 409A of the Code and regulations promulgated thereunder, disregard the acceleration in the time of payment and then disregard the acceleration of vesting as a result of a Change in Control first with respect to Company funded amounts and then the Employee’s deferrals, in each case only to the extent necessary to satisfy (ii) above. All determinations required to be made under this Section 5(e) shall be made by a nationally recognized accounting firm that is the Company’s outside auditor immediately prior to the event triggering the payments that are subject to the Excise Tax (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within 15 business days after an event entitling Employee to an amount due under this Agreement. All fees and expenses of the Accounting Firm shall be borne solely by the Company. The Accounting Firm’s determinations must be made with substantial authority (within the meaning of Section 6662 of the Code). For the purposes of all calculations under Section section 280G of the Code and the application of this Section 5.1, all determination as to present value shall use 120 percent of the applicable Federal rate (determined under Section 1274(d) of the Code) compounded based on the nature of the payment, as in effect on the Date of Termination, but if not otherwise specified, compounded on a semiannual basis. The determination by the Accounting Firm shall be final and binding on the Company and the Employee.
f. If Employee’s employment with the Company is terminated by the Company for Cause or for any reason not covered by Section 5(a) or 5(b), then the Company shall pay to Employee only his base salary and any accrued but unused vacation or PTO earned through the Termination Date.
g. In addition to the benefits otherwise provided in Section 5, the Employee shall be entitled to the following benefits and payments upon the Employee’s termination of employment: (i) the payment of the Employee’s base salary and any other form or type of compensation earned, vested and payable through the Date of Termination; (ii) the right to receive all benefits to which the Employee is vested on the Date of Termination in accordance with the terms under the Company pension and welfare benefit plans or any successor of such plan and any other plan or agreement relating to retirement benefits; and (iii) the right to exercise and to receive all rights in which the Employee is vested on the Date of Termination, in accordance with the terms of all awards under any Company stock purchase and stock incentive plans or programs, or any successor to any such plans or programs.
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