Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows: (i) upon the death of Employee; (ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days; (iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee; (iv) by Employer without Cause upon delivery of a Notice of Termination to Employee; (v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or (vi) by Employee upon delivery of a Notice of Termination to Employer. (b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate: (i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and (ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death. (c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall: (i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and (ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled. (d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly. (e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee. (f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following: (i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e); (ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and (iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee. (g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly. (h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year. (i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 2 contracts
Sources: Employment Agreement (Southern First Bancshares Inc), Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. In the event that the Bank is deemed by FDIC to be in troubled condition as defined in 12 C.F.R. Section 303.101(c), any severance payment to be paid pursuant to this Section 4 will be made only as permitted by applicable federal regulations.
(a) EmployeeThe Executive’s employment under this Agreement may be terminated prior to the end of the Term only as follows:, and the effect of such termination shall be as set forth in Sections 4(b) through 4(j):
(i) upon the death of Employeethe Executive;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee the Executive for a period of one hundred and eighty (180) 180 days;
(iii) by the Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employeethe Executive;
(viv) by Employee the Executive for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) -day period beginning on the thirtieth (30th) 30th day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) -day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or;
(viv) by Employee the Employer without Cause upon delivery of a Notice of Termination to EmployerTermination; and
(vi) by the Executive effective upon the 30th day after delivery of a Notice of Termination.
(b) If Employeethe Executive’s employment is terminated because of the EmployeeExecutive’s death, the Employer shall pay EmployeeExecutive’s estate:
(i) estate any sums due Employee him as Base Salary and/or base salary and reimbursement of expenses through the end of the month during which death occurred, paid occurred in accordance with the Employer’s 's standard payroll procedurespractices, but in any case, which shall mean no less frequently than monthly; and
(ii) . The Employer shall also pay the Executive's estate any bonus earned or accrued under the Bonus Plan through the date of death. Any bonus for previous years years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(b), which was not yet paid will be paid pursuant to the terms as set forth in section 4(aSection 3(b). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer Company for the entire year and prorating this prorated through the date of Employee’s Executive's death.
(c) During the period of any Disability leading up to the termination Executive’s Termination of Employee’s employment as a result of Employment under this provision, the Disability, Employer shall:
(i) shall continue to pay the Employee’s Executive his full Base Salary base salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with the Employer’s 's standard payroll procedures, but schedule (and in any case, no event less frequently than monthly, ) until Employee the Executive becomes eligible for benefits under any long-term disability plan or insurance program maintained by the Employer; , provided that the amount of any such payments to Employee the Executive shall be reduced by the sum of the amounts, if any, payable to Employee the Executive for the same period under any disability benefit or pension plan covering of the Employee; and
(ii) Employer or any of its subsidiaries. Furthermore, the Employer shall pay Employee the Executive any bonus earned or accrued under the Bonus Plan through the date of Disability. Any bonus for previous years years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(c), which was not yet paid will be paid pursuant to the terms as set forth in section 4(aSection 3(b). Any To the extent that the bonus that is earned in performance-based, the year amount of Disability the bonus will be paid on calculated by taking into account the earlier of: (i) seventy (70) days after the end performance of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance Company for the entire year in which and prorated through the Employee became Disableddate of Executive's Disability.
(d) If Employeethe Executive’s employment is terminated for CauseCause as provided above, Employee or if the Executive resigns, as set forth in clause (vi) of Section 4(a) (except for a termination of employment pursuant to Section 4(e)), the Executive shall receive only any sums due Employee him as Base Salary and/or base salary and reimbursement of expenses through the date of termination, which shall be paid in accordance with the Employer’s 's standard payroll procedures, but in any case, which shall mean no less frequently than monthly.
(e) If Employeethe Executive’s employment is terminated (1) by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject Executive pursuant to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven clause (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12thiv) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) or (2) by the Employer pursuant to clause (v) of this Agreement. The restrictive covenants contained Section 4(a) within two years following a Change in sections 10Control, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, then in addition to other rights and remedies available in law or equity, Employee the Executive shall be entitled to the following:
(i) Subject the Employer shall pay the Executive, subject to the possibility of a six-month delay described below in Section 29(a), beginning on 20:
(1) severance compensation in an amount equal to two months of his then current monthly base salary in a single lump sum within 60 days of the date of the Executive's termination; and (2) severance compensation in an amount equal to 100% of his then current monthly base salary each month for 22 months following the date of the Employee’s termination, the such lump sum payment as set forth in this Section 4(e)(i)(1). Employer shall provide Employee also pay the Executive any bonus earned through the date of termination (including any amounts awarded for previous years but which were not yet vested). Any bonus for previous years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(e)(i), which was not yet paid will be paid pursuant to the same severance compensation and accrued bonus terms set forth in Section 13(e3(b);. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Company for the entire year and prorated through the date of Executive's termination; and
(ii) Employee the Executive may continue participation, in accordance with the terms of the applicable benefits plans, in the CompanyEmployer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee the Executive is covered under the CompanyEmployer’s group health plan as of his date of termination, Employee the Executive will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee the Executive elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the CompanyEmployer’s share of such premiums shall be treated as taxable income to EmployeeExecutive. In addition, if the Employer’s insurance carriers’ consent to extend to the Executive life, disability and accidental death insurance benefits that are comparable to the benefits Executive would have received if his employment had continued and if such benefit extension does not result in adverse legal consequences to the group health plan or the Employer, then the Employer agrees to extend such coverage through the earlier of the date that the Employer’s insurance carrier terminates such consent or through the Continuation Period. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee the Executive obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by the Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his the Executive, the Executive’s spouse, dependents or beneficiaries may be entitled under any of the Employer’s employee benefit plans, programs, or practices following the EmployeeExecutive’s Termination termination of Employmentemployment, including, without limitation, retiree medical and life insurance benefits; and, provided that there shall be no duplication of benefits.
(iiif) If the restrictive covenants contained Employer terminates the Executive’s employment pursuant to clause (v) of Section 4(a) before a Change in sections 10Control or more than two years after a Change in Control, 11 then the Employer shall pay the Executive, subject to the possibility of a six-month delay described in Section 20, severance compensation in an amount equal to two months of his then current monthly base salary in a single lump sum within 60 days of the date of the Executive's termination; and 12 (2) severance compensation in an amount equal to 100% of his then current monthly base salary each month for 10 months following the date of such lump sum payment as set forth in Section 4(e)(i)(1) above. Employer shall also pay the Executive any bonus earned or accrued under the Bonus Plan through the date of termination (including any amounts awarded for previous years but which were not apply yet vested). Any bonus for previous years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(f), which was not yet paid will be paid pursuant to Employeethe terms set forth in Section 3(b). To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Company for the entire year and prorated through the date of Executive's termination.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13Section 4, and the express terms of any benefit plan under which Employee the Executive is a participant, it is agreed that, upon termination of Employeethe Executive’s employment, the Employer shall have no obligation to Employee the Executive for, and Employee the Executive waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13Section 4, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) 60 days of termination of Employeethe Executive’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee Executive shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory release substantially in the form of release acknowledging such remaining obligations and discharging both parties, attached hereto as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. Exhibit A. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(h) In the event that the Executive’s employment is terminated for any reason, as a condition to the Employer's obligation to pay any severance hereunder, the Executive shall (and does hereby) tender his resignation as a director of the Company, the Bank, and any other subsidiaries, effective as of the date of termination.
(i) The Company is aware that upon the occurrence of a Change in Control, the Board or a shareholder of the Company may then cause or attempt to cause the Company to refuse to comply with its obligations under this Agreement, or may cause or attempt to cause the Company to institute, or may institute, litigation seeking to have this Agreement declared unenforceable, or may take, or attempt to take, other action to deny the Executive the benefits intended under this Agreement. In these circumstances, the purpose of this Agreement could be frustrated. It is the intent of the parties that the Executive not be required to incur the legal fees and expenses associated with the protection or enforcement of the Executive's rights under this Agreement by litigation or other legal action because such costs would substantially detract from the benefits intended to be extended to the Executive hereunder, nor be bound to negotiate any settlement of the Executive's rights hereunder under threat of incurring such costs. Accordingly, if at any time after a Change in Control, it should appear to the Executive that the Company is acting or has acted contrary to or is failing or has failed to comply with any of its obligations under this Agreement for the reason that it regards this Agreement to be void or unenforceable or for any other reason, or that the Company has purported to terminate the Executive's employment for Cause or is in the course of doing so in either case contrary to this Agreement, or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation or other legal action designed to deny, diminish or recover (other than as required by law) from the Executive the benefits provided or intended to be provided to the Executive hereunder, and the Executive has acted in good faith to perform the Executive's obligations under this Agreement, the Company irrevocably authorizes the Executive from time to time to retain counsel of the Executive's choice at the expense of the Company to represent the Executive in connection with the protection and enforcement of the Executive's rights hereunder, including without limitation representation in connection with termination of the Executive's employment contrary to this Agreement or with the initiation or defense of any litigation or other legal action, whether by or against the Executive or the Company or any director, officer, shareholder or other person affiliated with the Company, in any jurisdiction. The reasonable fees and expenses of counsel selected from time to time by the Executive as hereinabove provided shall be paid or reimbursed to the Executive by the Company on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel. If other officers or key executives of the Company have retained counsel in connection with the protection and enforcement of their rights under similar agreements between them and the Company, and, unless in the Executive's sole judgment use of common counsel could be prejudicial to the Executive or would not be likely to reduce the fees and expenses chargeable hereunder to the Company, the Executive agrees to use the Executive's best efforts to agree with such other officers or executives to retain common counsel.
(j) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employeethe Executive’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended 1986 (the “Code”), ) and any regulations thereunder. If In the event that the Employer’s independent accountants acting as auditors for the Employer on the date of a Change in Control determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or payments provided for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a herein constitute “Payment”) would constitute an excess parachute payment and be subject to payments,” then the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment compensation payable hereunder shall be reduced to an amount the least extent necessary so value of which is $1.00 less than the maximum amount that no portion of the Payment shall could be subject paid to the Excise Tax, but only if, by reason of such reduction, Executive without the net after-tax benefit received by the Employee compensation being treated as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. “excess parachute payments” under Section 280G. The Payment payments shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee Executive that are exempt from Section 409A of the Code; (CB) reduction of any other cash payments or benefits otherwise payable to the Employee Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (DC) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (ED) reduction of any other payments or benefits otherwise payable to the Employee Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If.
(k) If the Executive is suspended or temporarily prohibited from participating, howeverin any way or to any degree, such Payment in the conduct of the Employer's affairs by (1) a notice served under section 8(e) or (g) of Federal Deposit Insurance Act (12 U.S.C. 1818 (e) or (g)) or (2) as a result of any other regulatory or legal action directed at the Executive by any regulatory or law enforcement agency having jurisdiction over the Executive (each of the foregoing referred to herein as a “Suspension Action”), and if this Agreement is not reduced as described aboveterminated, then such Payment the Employer's obligations under this Agreement shall be paid in full to suspended as of the Employee and earlier of the Employee shall be responsible for payment effective date of any Excise Taxes relating to such Suspension Action or the Payment.date on which the
Appears in 2 contracts
Sources: Employment Agreement (Congaree Bancshares Inc), Employment Agreement (Congaree Bancshares Inc)
Termination and Severance Payments. In the event that the Employer is subject to Part 359 of the FDIC Rules and Regulations (12 C.F.R. § 359, et seq.), any severance payment to be paid pursuant to this section 13 will be made only as permitted by applicable federal regulations.
(a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the year end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the year end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first date that is six (6) months and one (1) day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through For the avoidance of doubt, in no event will the aggregate amount of such severance compensation exceed the Employee’s Base Salary at the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date that is six (6) months and one (1) day following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall provide pay Employee with the same monthly severance compensation and accrued bonus set forth in Section 13(e);
cash in an amount equal to one-twelfth (ii1/12th) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in Employee’s Base Salary at the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination. For the avoidance of doubt, Employee in no event will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share aggregate amount of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following severance compensation exceed the Employee’s Termination Base Salary at the date of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the termination. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employmentTermination of Employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of the Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employer and the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, enter into a mutually satisfactory form of release acknowledging and may not revoke such release within the revocation period stated in such release, which shall acknowledge such remaining obligations and discharging discharge both parties, as well as the Employer’s officers, directors and employees with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Employee’s employment by the Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. HoweverFurther provided that, if such severance payment is made by the Employer, and if the sixty (60-) day period spans two (2) calendar years, regardless of when such release is executed by the Employee, such severance payment will must be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (CB) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (DC) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (ED) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. In the event that the Bank is deemed by FDIC to be in troubled condition as defined in 12 C.F.R. Section 303.101(c), any severance payment to be paid pursuant to this Section 4 will be made only as permitted by applicable federal regulations.
(a) EmployeeThe Executive’s employment under this Agreement may be terminated prior to the end of the Term only as follows:, and the effect of such termination shall be as set forth in Sections 4(b) through 4(j):
(i) upon the death of Employeethe Executive;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee the Executive for a period of one hundred and eighty (180) 180 days;
(iii) by the Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employeethe Executive;
(viv) by Employee the Executive for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) -day period beginning on the thirtieth (30th) 30th day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) -day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or;
(viv) by Employee the Employer without Cause upon delivery of a Notice of Termination to EmployerTermination; and
(vi) by the Executive effective upon the 30th day after delivery of a Notice of Termination.
(b) If Employeethe Executive’s employment is terminated because of the EmployeeExecutive’s death, the Employer shall pay EmployeeExecutive’s estate:
(i) estate any sums due Employee him as Base Salary and/or base salary and reimbursement of expenses through the end of the month during which death occurred, paid occurred in accordance with the Employer’s standard payroll procedurespractices, but in any case, which shall mean no less frequently than monthly; and
(ii) . The Employer shall also pay the Executive’s estate any bonus earned or accrued under the Bonus Plan through the date of death. Any bonus for previous years years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(b), which was not yet paid will be paid pursuant to the terms as set forth in section 4(aSection 3(b). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer Company for the entire year and prorating this prorated through the date of EmployeeExecutive’s death.
(c) During the period of any Disability leading up to the termination Executive’s Termination of Employee’s employment as a result of Employment under this provision, the Disability, Employer shall:
(i) shall continue to pay the Employee’s Executive his full Base Salary base salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with the Employer’s standard payroll procedures, but schedule (and in any case, no event less frequently than monthly, ) until Employee the Executive becomes eligible for benefits under any long-term disability plan or insurance program maintained by the Employer; , provided that the amount of any such payments to Employee the Executive shall be reduced by the sum of the amounts, if any, payable to Employee the Executive for the same period under any disability benefit or pension plan covering of the Employee; and
(ii) Employer or any of its subsidiaries. Furthermore, the Employer shall pay Employee the Executive any bonus earned or accrued under the Bonus Plan through the date of Disability. Any bonus for previous years years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(c), which was not yet paid will be paid pursuant to the terms as set forth in section 4(aSection 3(b). Any To the extent that the bonus that is earned in performance-based, the year amount of Disability the bonus will be paid on calculated by taking into account the earlier of: (i) seventy (70) days after the end performance of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance Company for the entire year in which and prorated through the Employee became Disableddate of Executive’s Disability.
(d) If Employeethe Executive’s employment is terminated for CauseCause as provided above, Employee or if the Executive resigns or retires from the Bank, as set forth in clause (vi) of Section 4(a) (except for a termination of employment pursuant to Section 4(e)), the Executive shall receive only any sums due Employee him as Base Salary and/or base salary and reimbursement of expenses through the date of termination, which shall be paid in accordance with the Employer’s standard payroll procedures, but in any case, which shall mean no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause; provided, conditioned upon however, that if the effectiveness of Executive retires from the release described Bank after providing the Board with at least 24 months prior written notice, then in consideration for the restrictive covenants set forth in Section 13(i) below and 9 of this Agreement the Employer shall pay the Executive, subject to the possibility of a six-month delay described below in Section 29(a)20, beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash a retirement benefit in an amount equal to one-twelfth (1/12th) $75,000 in a single lump sum within 60 days of the Employee’s annual rate of Base Salary at the date of termination. the Executive’s retirement, and the Employer shall also pay Employee the Executive any bonus earned or accrued under the Bonus Plan through the date of terminationretirement (including any amounts awarded for previous years but which were not yet vested). Any bonus for previous years, or the year in which the Executive’s employment is terminated upon the Executive’s retirement after providing written notice in accordance with this Section 4(d), which was not yet paid, paid will be paid as stated pursuant to the terms set forth in Section 4(a) 3(b). To the extent that the bonus is performance-based, the amount of this Agreement. The restrictive covenants contained in sections 10, 11 the bonus will be calculated by taking into account the performance of the Company for the entire year and 12 shall not apply to Employeeprorated through the date of Executive’s retirement.
(fe) If Employeethe Executive’s employment is terminated (1) by Employee for Good Reasonthe Executive pursuant to clause (iv) of Section 4(a) or (2) by the Employer pursuant to clause (v) of Section 4(a) within two years following a Change in Control, then in addition to other rights and remedies available in law or equity, Employee the Executive shall be entitled to the following:
(i) Subject the Employer shall pay the Executive, subject to the possibility of a six-month delay described below in Section 29(a), beginning on 20:
(1) severance compensation in an amount equal to two times the Executive’s highest monthly base salary over the 60-month period prior to the date of termination in a single lump sum within 60 days of the date of the Executive’s termination; and (2) severance compensation in an amount equal to 100% of the Executive’s highest monthly base salary over the 60-month period prior to the date of termination each month for 22 months following the date of the Employee’s termination, the such lump sum payment as set forth in this Section 4(e)(i)(1). Employer shall provide Employee also pay the Executive any bonus earned through the date of termination (including any amounts awarded for previous years but which were not yet vested). Any bonus for previous years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(e)(i), which was not yet paid will be paid pursuant to the same severance compensation and accrued bonus terms set forth in Section 13(e3(b);. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Company for the entire year and prorated through the date of Executive’s termination; and
(ii) Employee the Executive may continue participation, in accordance with the terms of the applicable benefits plans, in the CompanyEmployer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee the Executive is covered under the CompanyEmployer’s group health plan as of his date of termination, Employee the Executive will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee the Executive elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the CompanyEmployer’s share of such premiums shall be treated as taxable income to EmployeeExecutive. In addition, if the Employer’s insurance carriers’ consent to extend to the Executive life, disability and accidental death insurance benefits that are comparable to the benefits Executive would have received if his employment had continued and if such benefit extension does not result in adverse legal consequences to the group health plan or the Employer, then the Employer agrees to extend such coverage through the earlier of the date that the Employer’s insurance carrier terminates such consent or through the Continuation Period. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee the Executive obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by the Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his the Executive, the Executive’s spouse, dependents or beneficiaries may be entitled under any of the Employer’s employee benefit plans, programs, or practices following the EmployeeExecutive’s Termination termination of Employmentemployment, including, without limitation, retiree medical and life insurance benefits; and, provided that there shall be no duplication of benefits.
(iiif) If the restrictive covenants contained Employer terminates the Executive’s employment pursuant to clause (v) of Section 4(a) before a Change in sections 10Control or more than two years after a Change in Control, 11 then the Employer shall pay the Executive, subject to the possibility of a six-month delay described in Section 20, severance compensation in an amount equal to two months of his then current monthly base salary in a single lump sum within 60 days of the date of the Executive’s termination; and 12 (2) severance compensation in an amount equal to 100% of his then current monthly base salary each month for 10 months following the date of such lump sum payment as set forth in Section 4(e)(i)(1) above. Employer shall also pay the Executive any bonus earned or accrued under the Bonus Plan through the date of termination (including any amounts awarded for previous years but which were not apply yet vested). Any bonus for previous years, or the year in which the Executive’s employment is terminated in accordance with this Section 4(f), which was not yet paid will be paid pursuant to Employeethe terms set forth in Section 3(b). To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Company for the entire year and prorated through the date of Executive’s termination.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13Section 4, and the express terms of any benefit plan under which Employee the Executive is a participant, it is agreed that, upon termination of Employeethe Executive’s employment, the Employer shall have no obligation to Employee the Executive for, and Employee the Executive waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13Section 4, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) 60 days of termination of Employeethe Executive’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee Executive shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory release substantially in the form of release acknowledging such remaining obligations and discharging both parties, attached hereto as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. Exhibit A. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(h) In the event that the Executive’s employment is terminated for any reason, as a condition to the Employer’s obligation to pay any severance hereunder, the Executive shall (and does hereby) tender his resignation as a director of the Company, the Bank, and any other subsidiaries, effective as of the date of termination.
(i) The Company is aware that upon the occurrence of a Change in Control, the Board or a shareholder of the Company may then cause or attempt to cause the Company to refuse to comply with its obligations under this Agreement, or may cause or attempt to cause the Company to institute, or may institute, litigation seeking to have this Agreement declared unenforceable, or may take, or attempt to take, other action to deny the Executive the benefits intended under this Agreement. In these circumstances, the purpose of this Agreement could be frustrated. It is the intent of the parties that the Executive not be required to incur the legal fees and expenses associated with the protection or enforcement of the Executive’s rights under this Agreement by litigation or other legal action because such costs would substantially detract from the benefits intended to be extended to the Executive hereunder, nor be bound to negotiate any settlement of the Executive’s rights hereunder under threat of incurring such costs. Accordingly, if at any time after a Change in Control, it should appear to the Executive that the Company is acting or has acted contrary to or is failing or has failed to comply with any of its obligations under this Agreement for the reason that it regards this Agreement to be void or unenforceable or for any other reason, or that the Company has purported to terminate the Executive’s employment for Cause or is in the course of doing so in either case contrary to this Agreement, or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any litigation or other legal action designed to deny, diminish or recover (other than as required by law) from the Executive the benefits provided or intended to be provided to the Executive hereunder, and the Executive has acted in good faith to perform the Executive’s obligations under this Agreement, the Company irrevocably authorizes the Executive from time to time to retain counsel of the Executive’s choice at the expense of the Company to represent the Executive in connection with the protection and enforcement of the Executive’s rights hereunder, including without limitation representation in connection with termination of the Executive’s employment contrary to this Agreement or with the initiation or defense of any litigation or other legal action, whether by or against the Executive or the Company or any director, officer, shareholder or other person affiliated with the Company, in any jurisdiction. The reasonable fees and expenses of counsel selected from time to time by the Executive as hereinabove provided shall be paid or reimbursed to the Executive by the Company on a regular, periodic basis upon presentation by the Executive of a statement or statements prepared by such counsel. If other officers or key executives of the Company have retained counsel in connection with the protection and enforcement of their rights under similar agreements between them and the Company, and, unless in the Executive’s sole judgment use of common counsel could be prejudicial to the Executive or would not be likely to reduce the fees and expenses chargeable hereunder to the Company, the Executive agrees to use the Executive’s best efforts to agree with such other officers or executives to retain common counsel.
(j) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employeethe Executive’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended 1986 (the “Code”), ) and any regulations thereunder. If In the event that the Employer’s independent accountants acting as auditors for the Employer on the date of a Change in Control determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or payments provided for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a herein constitute “Payment”) would constitute an excess parachute payment and be subject to payments,” then the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment compensation payable hereunder shall be reduced to an amount the least extent necessary so value of which is $1.00 less than the maximum amount that no portion of the Payment shall could be subject paid to the Excise Tax, but only if, by reason of such reduction, Executive without the net after-tax benefit received by the Employee compensation being treated as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. “excess parachute payments” under Section 280G. The Payment payments shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee Executive that are exempt from Section 409A of the Code; (CB) reduction of any other cash payments or benefits otherwise payable to the Employee Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.a
Appears in 1 contract
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i13(h) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d26(e)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b26(c)) upon delivery of a Notice of Termination (as defined in subsection 26(g26(j)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by the Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of 12 months following a Change in Control (as defined in subsection 26(c26(g)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and.
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the CompanyEmployer’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the CompanyEmployer’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i13(h) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth sixth (1/12th1/6th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive Furthermore, the noncompetition covenants contained in sections 10, 11 and Section 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, Reason following a Change in addition to other rights and remedies available in law or equityControl, Employee shall be entitled to the following:
(i) Subject to the conditions set forth in Section 13(e) (a release and possibility of a six-month delay described below in Section 29(a)), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the CompanyEmployer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the CompanyEmployer’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the CompanyEmployer’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the restrictive covenants noncompetition covenant contained in sections 10, 11 and Section 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee prior to a Change in Control for any reason and following a Change in Control without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release agreeable to Employer and provided to Employee at or following the date of termination, acknowledging such Employee’s remaining obligations obligations, and discharging both partiesreleasing Employer, as well as Employer’s and their officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Sources: Employment Agreement (Southern First Bancshares Inc)