Regular Severance Benefits. If during the Term, (w) the Bank terminates Executive’s employment other than for Cause, (x) Executive’s employment terminates by reason of his Resignation for Good Reason, (y) Executive’s employment with the Bank terminates due to Executive’s death or Disability, or (z) Executive’s employment with the Bank terminates pursuant to Section 4(d), in each case of clauses (w), (x) and (z) at a time that Executive is otherwise willing and able to continue in employment, then, in addition to the Accrued Compensation, Executive shall, subject to Section 5(b)(v) and Section 12 below, be entitled to receive the payments and benefits set forth in this Section 5(b), which shall be paid to Executive as follows: (i) The Bank shall pay Executive an amount (the “Pro Rata Bonus”) equal to the product of (A) the Incentive Bonus, if any, that Executive would have earned for the calendar year in which the Executive’s Date of Termination occurs based on achievement, through the Executive’s Date of Termination, of the applicable performance goals for such year as determined by the Bank and (B) a fraction, the numerator of which is the number of days the Executive was employed by the Bank during the year of termination and the denominator of which is the number of days in such year, in a lump sum in cash payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years. (ii) The Bank shall pay Executive in a lump sum in cash in the amount (the “Severance Amount”) of the greater of (A) $1,500,000.00 or (B) the product of (I) two, multiplied by (II) Executive’s then-current Base Salary. The Severance Amount shall be payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years. (iii) The Bank shall pay Executive a lump sum in cash in the amount of the product of (A) eighteen (18), multiplied by (B) the full monthly cost of premiums Executive would pay in the first calendar month immediately following the calendar month that includes the Executive’s Date of Termination if Executive timely elected to continue coverage at the level in effect immediately prior to the Executive’s Date of Termination in any Bank group medical, dental, vision or prescription drug plans in which Executive or Executive’s eligible dependents are entitled to continue participation under Section 4980B of the Code or other similar applicable law (the “Health Coverage Benefit”), payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years. (iv) Executive will be deemed to have satisfied all service-based vesting conditions applicable to (A) the Restricted Stock Award, (B) the Performance Share Award, and (C) all other outstanding and unvested equity awards held by Executive on Executive’s Date of Termination that were granted more than one (1) year before Executive’s Date of Termination. With respect to the Performance Share Award (if applicable) and any other performance-based equity award (or portion thereof) for which the service-based vesting condition has been satisfied (or deemed satisfied by reason of this Section 5(b)(iv)) as of Executive’s Date of Termination, such award shall continue in accordance with the terms of the applicable award agreement and, for avoidance of doubt, shall vest or be forfeited in accordance with the terms of the applicable award agreement and based on actual performance for the applicable performance period. If applicable, the settlement of such performance-based equity award (or portion thereof) shall occur at such time(s) as such performance-based equity award (or portion thereof) would have been settled had Executive continued his employment with the Bank. (v) Notwithstanding the foregoing, the Bank shall be obligated to provide the payments and benefits described in Section 5(b)(i) through (iv) only if (A) within fifty-two (52) days after the Executive’s Date of Termination Executive shall have timely executed and returned to the Bank a separation and release agreement in a customary form prescribed by the Bank (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 6 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 6 hereof, then Executive shall not be entitled to the Pro Rata Bonus, Severance Amount, or Health Coverage Benefit. The Release Agreement must be executed and all revocation periods shall have expired within 60 days after the Executive’s Date of Termination; failing which all payments and benefits conditioned thereupon shall be forfeited. (vi) If Executive’s employment with the Bank is terminated during an Effective Period as defined in the CIC Plan (as modified by this Agreement), Executive shall be eligible to receive the severance benefits described in Section 4 of the CIC Plan, pursuant to the terms and conditions of the CIC Plan. For the avoidance of doubt, as set forth in Section 4.5 of the CIC Plan, any severance benefits payable to Executive under the CIC Plan shall be reduced by and not in addition to any severance benefits payable to Executive pursuant to Section 5(b)(i), (ii) or (iii) of this Agreement.
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Regular Severance Benefits. If during the Term, (wx) the Bank terminates Executive’s employment other than for Cause, death, or Disability or (xy) Executive’s employment terminates by reason of his Resignation for Good Reason, (y) Executive’s employment with the Bank terminates due to Executive’s death or Disability, or (z) Executive’s employment with the Bank terminates pursuant to Section 4(d), in each case of clauses (w), (x) and (z) at a time that Executive is otherwise willing and able to continue in employment, then, in addition to the Accrued Compensation, Executive shall, subject to Section 5(b)(v) and Section 12 below, be entitled to receive the payments and benefits set forth in this Section 5(b), which shall be paid to Executive as follows:
(i) The Bank shall pay Executive an amount (the “Pro Rata Bonus”) equal to the product of (A) the Incentive Bonus, if any, that Executive would have earned for the calendar year in which the Executive’s Date of Termination occurs based on achievement, through the Executive’s Date of Termination, of the applicable performance goals for such year as determined by the Bank and (B) a fraction, the numerator of which is the number of days the Executive was employed by the Bank during the year of termination and the denominator of which is the number of days in such year, in a lump sum in cash payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years.
(ii) The Bank shall pay Executive in a lump sum in cash in the amount of the product of (A) two, multiplied by (B) Executive’s then-current Base Salary (the “Severance Amount”) of the greater of (A) $1,500,000.00 or (B) the product of (I) two, multiplied by (II) Executive’s then-current Base Salary. The Severance Amount shall be payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years.
(iii) The Bank shall pay Executive a lump sum in cash in the amount of the product of (A) eighteen (18), multiplied by (B) the full monthly cost of premiums Executive would pay in the first calendar month immediately following the calendar month that includes the Executive’s Date of Termination if Executive timely elected to continue coverage at the level in effect immediately prior to the Executive’s Date of Termination in any Bank group medical, dental, vision or prescription drug plans in which Executive or Executive’s eligible dependents are entitled to continue participation under Section 4980B of the Code or other similar applicable law (the “Health Coverage Benefit”), payable within sixty (60) days following the Executive’s Date of Termination, provided, that if such sixty (60) day period begins in one taxable year and ends in the subsequent taxable year, then such payment shall not occur before the first day in the second of such two taxable years.
(iv) Executive will be deemed to have satisfied all service-based vesting conditions applicable to (A) the Restricted Stock Award, (B) the Performance Share Award, and (C) all other outstanding and unvested equity awards held by Executive on Executive’s Date of Termination that were granted more than one (1) year before Executive’s Date of Termination. With respect to the Performance Share Award (if applicable) and any other performance-based equity award (or portion thereof) for which the service-based vesting condition has been satisfied (or deemed satisfied by reason of this Section 5(b)(iv)) as of Executive’s Date of Termination, such award shall continue in accordance with the terms of the applicable award agreement and, for avoidance of doubt, shall vest or be forfeited in accordance with the terms of the applicable award agreement and based on actual performance for the applicable performance period. If applicable, the settlement of such performance-based equity award (or portion thereof) shall occur at such time(s) as such performance-based equity award (or portion thereof) would have been settled had Executive continued his employment with the Bank.
(v) Notwithstanding the foregoing, the Bank shall be obligated to provide the payments and benefits described in Section 5(b)(i) through (iviii) only if (A) within fifty-two (52) days after the Executive’s Date of Termination Executive shall have timely executed and returned to the Bank a separation and release agreement in a customary form prescribed by the Bank (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 6 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 6 hereof, then Executive shall not be entitled to the Pro Rata Bonus, Severance Amount, or Health Coverage Benefit. The Release Agreement must be executed and all revocation periods shall have expired within 60 days after the Executive’s Date of Termination; failing which all payments and benefits conditioned thereupon shall be forfeited.
(viv) If Executive’s employment with the Bank is terminated during an Effective Period as defined in the CIC Plan (as modified by this Agreement), Executive shall be eligible to receive the severance benefits described in Section 4 of the CIC Plan, pursuant to the terms and conditions of the CIC PlanPlan (the “CIC Severance Benefits”). For the avoidance of doubt, as set forth in Section 4.5 of the CIC Plan, any severance benefits CIC Severance Benefits payable to Executive under the CIC Plan shall be reduced by and not in addition to any severance benefits payable to Executive pursuant to Section 5(b)(i), (ii) or (iii5(b) of this Agreement, which, for purposes of this sentence shall not include the Accrued Compensation (for the purpose of clarity, if Executive becomes entitled to both the CIC Severance Benefits under the CIC Plan and the severance benefits pursuant to Section 5(b) of this Agreement, Executive shall be entitled to the greater of, and only the greater of, the CIC Severance Benefits under the CIC Plan and the severance benefits pursuant to Section 5(b) of this Agreement).
(vi) Treatment of Executive’s outstanding unvested Company options, restricted stock and other equity-based awards (collectively, the “Equity Awards”) shall be determined in accordance with the terms of the plans and/or agreements providing for such Equity Awards.
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Sources: Executive Employment Agreement (Stellar Bancorp, Inc.)