Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof: (1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company. (2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated. (3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination. (4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason). (b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require. (c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination. (d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive. (e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 3 contracts
Sources: Termination Agreement (Encysive Pharmaceuticals Inc), Termination Agreement (Encysive Pharmaceuticals Inc), Termination Agreement (Texas Biotechnology Corp /De/)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control which occurs and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company's documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, "Termination of Employment" shall be defined as:
(i) The Executive's involuntary termination by the Company for any reason other than death, Disability or Cause; or
(ii) The Executive's termination for "Good Reason," defined as the occurrence of any of the following events without the Executive's written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any reassignment of the Executive to substantial duties materially inconsistent with the Executive's position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive's position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control; provided that the fact that the Company is no longer a publicly traded company or the Executive no longer has duties and responsibilities associated exclusively with a publicly traded company, such as Securities and Exchange Commission or stock exchange reporting responsibilities or investor or analyst relations responsibilities, shall not be deemed to be a reassignment of the Executive to substantial duties materially inconsistent with the Executive's position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive's position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any reduction in the Executive's base salary or targeted incentive bonus or commissions in effect immediately prior to the Change in Control, or failure by the Company to continue any bonus, stock or other incentive plans in effect immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable award opportunities/benefits), or any removal of the Executive from participation in such aforementioned plans;
(C) The discontinuance or reduction in benefits to the Executive under any qualified or nonqualified retirement or welfare plan maintained by the Company immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits), or the discontinuance of any fringe benefits or other perquisites that the Executive received immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits);
(D) Required relocation of the Executive's principal place of employment more than 50 miles from the Executive's place of employment prior to the Change in Control; or
(E) The Company's breach of any provision in this Agreement, provided that the Company has not cured such breach within 10 days following written notice by the Executive to the Company of such breach.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, may apply in writing to the Company for confirmation of such entitlement prior to the Executive's actual separation from employment, by following the claims procedure set forth in Section 15 hereof. The submission of such a request by the Executive shall not constitute "Cause" for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive's request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive's execution of a release (in the form attached hereto as Exhibit A), the Executive shall be entitled to (the "Change in Control Severance Benefits"):
(i) A cash severance benefit equal to one times the Executive's current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive's target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for Good Reason one year, on the terms (or comparable terms) provided by the Company to the Executive immediately prior to the Change in Control. Health benefits shall be provided through continued coverage under the Company's group health plan, if allowed under the terms of such plan, or by the Company Without Cause (which includes delivery by the Company reimbursement of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned COBRA continuation coverage premiums paid by the Executive, all amounts of such compensation previously deferred and earned and not yet paid as determined by the Company.
(2) The Company shall; provided, promptly upon submission however, if the health plan is self-insured by the Executive Company, then the determination shall be made by the Executive. Any continuation of supporting documentationgroup health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. If COBRA continuation coverage is not available, pay or the Company shall reimburse to the Executive any costs and expenses paid or incurred by for premiums for comparable coverage, provided, however, that the Executive which would have been payable under Section 4.6 hereof if reimbursement shall not exceed the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum greater of (i) two times the Executive's Base Salary (as in effect on Date annual premium paid by the Company for such coverage at the date of Termination) and termination or (ii) two times the amount of the COBRA premium under the Company's group health plan for coverage comparable to that elected by the Executive's most recent Annual Bonus. If , (A) at the most recent Annual Bonus was a stock option or a stock grant, the value time of the bonus will be deemed to be Change of Control or (B) at the number of option shares times the closing price time of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Terminationrequired payment, the Company shall continue whichever is greater. Welfare benefits (other than disability health benefits)) shall be continued only to the extent permitted under the terms of such plans;
(iv) Continuation of the Executive's then current car benefit for one year in accordance with the Company car policy in effect at the time of termination.
(v) Continued coverage, during the six (6) years following the Executive's termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company's expense election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to extent available. The policy dollar coverage limits of any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments policy shall be made not less than the policy limit under any Company policy in place within five the one (51) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant year prior to this Section 6.4 that Good Reason exists for the Executive's termination of employment (the "Existing Policy") or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and that adequate remedy has not occurred shall be presumed correct former directors and shall govern unless officers at an annual premium equal to two times the party contesting Company's annual premium for the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determinationExisting Policy.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurredSubject to Section 11(a) hereof, the Company Executive's cash severance benefit under Section 4(c)(i) and (ii) shall immediately pay be paid in a lump sum cash payment within ten (10) days following the Executive's Termination of Employment, as defined in Section 4. Any payment made later than 10 days following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof) for whatever reason, shall include interest at the prime rate plus two percent, which shall begin accruing on the 10th day following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof). For purposes of this Section 4, "prime rate" shall be determined by reference to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required prime rate established by Comerica Bank (or its successor), in effect from time to repay such amounts to time commencing on the Company if any such dispute is finally determined adversely to 10th day following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof).
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive's employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive's employment with the Company, other than a termination due to the Executive's death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive's employment with respect the Company following a Change in Control due to the amount Executive's death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive's employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 3 contracts
Sources: Severance Agreement (Perceptron Inc/Mi), Severance Agreement (Perceptron Inc/Mi), Severance Agreement (Perceptron Inc/Mi)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control which occurs and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any reassignment of the Executive to substantial duties materially inconsistent with the Executive’s position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control; provided that the fact that the Company is no longer a publicly traded company or the Executive no longer has duties and responsibilities associated exclusively with a publicly traded company, such as Securities and Exchange Commission or stock exchange reporting responsibilities or investor or analyst relations responsibilities, shall not be deemed to be a reassignment of the Executive to substantial duties materially inconsistent with the Executive’s position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any reduction in the Executive’s base salary or targeted incentive bonus or commissions in effect immediately prior to the Change in Control, or failure by the Company to continue any bonus, stock or other incentive plans in effect immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable award opportunities/benefits), or any removal of the Executive from participation in such aforementioned plans;
(C) The discontinuance or reduction in benefits to the Executive under any qualified or nonqualified retirement or welfare plan maintained by the Company immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits), or the discontinuance of any fringe benefits or other perquisites that the Executive received immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits);
(D) Required relocation of the Executive’s principal place of employment more than 50 miles from the Executive’s place of employment prior to the Change in Control; or
(E) The Company’s breach of any provision in this Agreement, provided that the Company has not cured such breach within 10 days following written notice by the Executive to the Company of such breach.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, may apply in writing to the Company for confirmation of such entitlement prior to the Executive’s actual separation from employment, by following the claims procedure set forth in Section 15 hereof. The submission of such a request by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for Good Reason one year, on the terms (or comparable terms) provided by the Company to the Executive immediately prior to the Change in Control. Health benefits shall be provided through continued coverage under the Company’s group health plan, if allowed under the terms of such plan, or by the Company Without Cause (which includes delivery by the Company reimbursement of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned COBRA continuation coverage premiums paid by the Executive, all amounts of such compensation previously deferred and earned and not yet paid as determined by the Company.
(2) The Company shall; provided, promptly upon submission however, if the health plan is self-insured by the Executive Company, then the determination shall be made by the Executive. Any continuation of supporting documentationgroup health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. If COBRA continuation coverage is not available, pay or the Company shall reimburse to the Executive any costs and expenses paid or incurred by for premiums for comparable coverage, provided, however, that the Executive which would have been payable under Section 4.6 hereof if reimbursement shall not exceed the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum greater of (i) two times the annual premium paid by the Company for such coverage at the date of termination or (ii) two times the amount of the COBRA premium under the Company’s group health plan for coverage comparable to that elected by the Executive's Base Salary , (as A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such plans;
(iv) Continuation of the Executive’s then current car benefit for one year in accordance with the Company car policy in effect on Date at the time of Terminationtermination.
(v) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy.
(d) Subject to Section 11(a) hereof, the Executive’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment made later than 10 days following the most recent Annual Bonus was a stock option Executive’s Termination of Employment (or a stock grantapplicable due date under Section 11(a) hereof) for whatever reason, shall include interest at the value prime rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of the bonus will Employment (or applicable due date under Section 11(a) hereof). For purposes of this Section 4, “prime rate” shall be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior determined by reference to the Date of Termination.
prime rate established by Comerica Bank (4) During the 18-month period or its successor), in effect from time to time commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or 10th day following the Executive's family at least equal to those which would have been provided to them ’s Termination of Employment (or applicable due date under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason11(a) hereof).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 2 contracts
Sources: Severance Agreement (Perceptron Inc/Mi), Severance Agreement (Perceptron Inc/Mi)
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term (as defined in Section 6(c) of this Agreement, provided such termination ) shall occur and Executive’s employment is involuntarily terminated by the Bank and the Corporation without Cause or Executive resigns for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof)Reason, in lieu of any obligation each case within two (2) years following the Company may have pursuant Change in Control, Executive shall be entitled to Section 6.3 hereof:
(1) The Company shall pay to the Executive in receive his Accrued Benefits plus a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half two (1.52) times the sum of of: (i) the Executive's his Annual Base Salary (as in effect on Date of Termination) Salary; and (ii) his average cash bonus and other cash incentive compensation earned by him with respect to the Executive's most recent Annual Bonusthree calendar years immediately preceding the year of termination, which shall be paid to Executive within sixty (60) days following the date of his termination of employment. In addition, for a period of two (2) years from the date of termination of employment, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the two (2) years prior to his termination of employment. If the most recent Annual Bonus was a stock option or a stock grantBank and the Corporation cannot provide such benefits because Executive is no longer an Executive, the value Bank and the Corporation shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar health and welfare Executive benefits which he enjoyed prior to termination, which reimbursement shall continue until the expiration of two (2) years from the date of termination of employment or until Executive secures substantially similar benefits through other employment, whichever shall first occur, subject to Section 409A of the bonus will be deemed Internal Revenue Code of 1986, as amended (the “Code”), if applicable. Notwithstanding any provision of this Agreement to the contrary, Executive shall forfeit his rights to receive the payments and benefits set forth in Section 6(a) unless he executes a general release of claims in favor of the Bank and the Corporation in a form to be provided by the number Bank and the Corporation, and such release becomes effective and irrevocable in accordance with its terms, on or before the date that is sixty (60) days after Executive’s termination of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)employment.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under for in this Section 6.4 6 by seeking other employment or otherwise. Unless otherwise agreed to in writing, nor shall the amount of any payment or the benefit provided under for in this Section 6.4 6 shall not be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a the result of employment by another employeremployer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.
(c) As used in this Agreement, “Change in Control” shall mean a change in ownership or effective control applicable to the Corporation or the Bank as described in Section 409A(a)(2)(A(v) of the Internal Revenue Code of 1986, as amended (or any successor provision thereto and the regulations thereunder).
Appears in 2 contracts
Sources: Employment Agreement (LINKBANCORP, Inc.), Employment Agreement (LINKBANCORP, Inc.)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred and earned and not yet paid by plans;
(iv) Continuation of the CompanyExecutive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination.
(2v) The Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company shallprior to the date of termination of his employment, promptly upon submission under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive of supporting documentationwith such a policy, pay or reimburse to the Executive extent available. The policy dollar coverage limits of any costs and expenses paid or incurred such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Executive which would have been payable under Section 4.6 hereof if Company for all of its current and former directors and officers at an annual premium equal to two times the Executive's employment had not terminatedCompany’s annual premium for the Existing Policy.
(3d) The Company shall pay Subject to Section 11(a) hereof, and the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) Code Section 409A limitations set forth below, the Executive's Base Salary (as in effect on Date of Termination’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee”, as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 2 contracts
Sources: Severance Agreement (Perceptron Inc/Mi), Severance Agreement (Perceptron Inc/Mi)
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's ’s Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's ’s employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half three (1.53) times the sum of (i) the Executive's ’s Base Salary (as in effect on Date of Termination) and (ii) the Executive's ’s most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's ’s expense to the Executive and/or the Executive's ’s family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's ’s employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's ’s respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's ’s termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 2 contracts
Sources: Termination Agreement (Encysive Pharmaceuticals Inc), Termination Agreement (Encysive Pharmaceuticals Inc)
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term (as defined in Section 6(c) of this Agreement, provided such termination ) shall occur and Employee’s employment is involuntarily terminated by the Executive Bank and the Corporation without Cause or Employee resigns for Good Reason Reason, in each case within one hundred eighty (180) days of the Change in Control, Employee shall be entitled to receive his Accrued Benefits plus a lump sum payment equal to two (2) times his Annual Base Salary, which shall be paid to Employee within sixty (60) days following the date of his termination of employment. In addition, for a period of two (2) years from the date of termination of employment, or until Employee secures substantially similar benefits through other employment, whichever shall first occur, Employee shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Employee during the two (2) years prior to his termination of employment. If the Bank and the Corporation cannot provide such benefits because Employee is no longer an employee, the Bank and the Corporation shall reimburse Employee in an amount equal to the monthly premium paid by him to obtain substantially similar health and welfare employee benefits which he enjoyed prior to termination, which reimbursement shall continue until the Company Without Cause expiration of two (which includes delivery by 2) years from the Company date of a notice termination of nonrenewal employment or until Employee secures substantially similar benefits through other employment, whichever shall first occur, subject to Code Section 409A if applicable. Notwithstanding any provision of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive contrary, Employee shall forfeit his rights to receive the payments and benefits set forth in Section 6(a) unless he executes a general release of claims in favor of the Bank and the Corporation in a lump sum form to be provided by the Bank and the Corporation, and such release becomes effective and irrevocable in cash within five accordance with its terms, on or before the date that is sixty (560) days after Employee’s termination of employment. Notwithstanding any provision of this Agreement to the Date of Terminationcontrary, if not theretofore paidany benefit or payment hereunder would be treated as a “parachute payment” under Code Section 280G, the Executive's Base Salary (as in effect on Bank and the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of Corporation shall reduce such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay benefit or reimburse payment to the Executive extent necessary to avoid treating such benefit or payment as a parachute payment. Employee shall be entitled to only the reduced benefit or payment and shall forfeit any costs amount over and expenses paid or incurred by above the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)reduced amount.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive Employee shall not be required to mitigate damages with respect to the amount of any payment provided under for in this Section 6.4 6 by seeking other employment or otherwise. Unless otherwise agreed to in writing, nor shall the amount of any payment or the benefit provided under for in this Section 6.4 6 shall not be reduced by retirement benefits, deferred compensation or any compensation earned by Employee as the Executive as a result of employment by another employeremployer or by reason of Employee’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.
(c) As used in this Agreement, “Change in Control” shall mean:
Appears in 2 contracts
Sources: Employment Agreement (LINKBANCORP, Inc.), Employment Agreement (LINKBANCORP, Inc.)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4 and not the severance benefits under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The Executive is not entitled to receive severance payments under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s material breach of any provision in this Agreement EXHIBIT 10.44
(b) If the Executive believes that Good Reason, as defined in Section 4 above exists, the Executive shall provide written notice of the existence of the condition to the Company within 90 days after the initial existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such a written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the condition is not cured within the 30-day period, to receive a Good Reason Termination of Employment, the Executive shall terminate employment within 30 days following the expiration of the cure period.
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release that becomes irrevocable within 60 days following the Executive’s Termination of Employment (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to the following severance benefits (the “Change in Control Severance Benefits”) to commence when the Release becomes irrevocable within such 60-day period (subject to the Specified Employee restrictions set forth below) and provided that if the 60-day period spans two calendar years, the benefits shall commence in the second calendar year:
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, following the Executive’s election of COBRA and submission of monthly receipts evidencing the Executive’s payment for monthly COBRA coverage for the Executive, the Executive’s spouse and dependent children under age 26, if health coverage at the same level was provided by the Company to such termination is family members at Termination of Employment (including vision and dental, as applicable), the Company shall reimburse the Executive for such COBRA payments for one year of coverage, or if earlier, for the period until the death of the Executive (the Change in Control Benefit Continuation Period”). To the extent permissible under the terms of the Company’s welfare plans, the Company also shall provide the Executive with welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive at Termination of Employment) for one year or, if earlier, the death of the Executive, in each case, at the same level and on comparable terms as provided by the Company to its employees from time to time during the Benefit Continuation Period, with the Company paying (or reimbursing the Executive, as applicable) for any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Any reimbursement for Good Reason COBRA coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code;
(iv) Continuation of the Executive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination; and
(v) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company Without Cause (which includes delivery or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of a notice of nonrenewal of this Agreement pursuant its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy. EXHIBIT 10.44
(d) Subject to Section 3 11(a) hereof), in lieu of any obligation the Company may have pursuant to Release timing restrictions set forth above and the Code Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid409A Specified Employee limitations set forth below, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable ’s cash severance benefit under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option “Specified Employee,” as defined in Code Section 409A, commencing at Termination of Employment (subject to the Release timing requirements set forth above), the Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the Executive, any suspended payments shall be aggregated and paid in a lump sum on the first day of the next month, and the remaining compensation, if any, shall be paid in accordance with its regular schedule.
(e) Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control; provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a stock granttermination of employment by the Executive other than for Good Reason, then the value of the bonus will Agreement shall not be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to have terminated and the Executive and/or the Executive's family at least equal shall be entitled to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to receive the Change in Control which reduction constitutes or may constitute Good Reason).Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(biii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with the Company shall pay following a Change in Control due to the Executive all legal fees and expenses incurred Executive’s death or Disability;
(v) Termination of the Executive’s employment by the Company for Cause following a Change in Control; or
(vi) Termination of employment by the Executive as a result for other than Good Reason following the date of a termination which entitles Change in Control. Unless Section 4 of this Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the Executive third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurredanniversary, the Company shall immediately pay to notifies the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive in writing that it shall not be required to mitigate damages with respect to extend the amount term of any payment provided under Section 4 of this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred plans;
(iv) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and earned and not yet paid officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy.
(2d) The Company shallSubject to Section 11(a) hereof, promptly upon submission by and the Executive of supporting documentationCode Section 409A limitations set forth below, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable Executive’s cash severance benefit under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee”, as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement A termination of employment shall be terminated deemed to occur if, within two years after one hundred eighty (180) days following a Change in Control which occurs during the term (as defined in Section 3 of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu any of any obligation the Company may have pursuant to Section 6.3 hereoffollowing events occur:
(1a) The Company shall pay any involuntary termination of Executive's employment (other than for a disability wherein Executive is unable to the Executive perform all of his essential job functions, taking into account any reasonable accommodations);
(b) any reduction in a lump sum in cash within five Executive's title, responsibilities (5) days after including reporting responsibilities), or authority, as such existed as of the Date of Termination, if not theretofore paid, Change of Control ;
(c) the assignment to Executive of substantial duties which are materially inconsistent with Executive's office on the Date of Change in Control, or as have been increased from time to time after the Change in Control, unless Executive has voluntarily consented to such assignments;
(d) any involuntary reassignment of Executive to a location greater than fifty (50) miles from the location of Executive's office on the Date of the Change in Control;
(e) any material reduction (i.e., defined for this purpose as a reduction of ten percent (10%) or more) in Executive's Annual Base Salary (as in effect on the Date of Terminationthe Change in Control, unless Executive has voluntarily consented to such reduction; or
(f) through any failure to provide Executive with benefits that, overall, are materially comparable to those enjoyed by Executive under Corporation's or Bank's retirement or pension, life insurance, medical, health and accident, disability and other employee benefit plans in which Executive participated at the time of the Change in Control, or the taking of any action that would, overall, materially reduce such benefits in effect as of the Date of Termination, and Change in Control. In the case event of compensation previously deferred and bonuses previously earned by the a Change of Control Executive, all amounts at his option exercisable within 180 days after such Change in Control first occurred, shall provide the Corporation and Bank and/or its/their successors or assigns notice of the existence of the condition which Executive believes constitutes a breach of its/their obligation(s) and provide the Corporation and Bank and/or its/their successors or assigns thirty (30) days in which to cure such condition. In the event that the Corporation and Bank and/or its/their successors or assigns disagrees that a breach has occurred or otherwise does not cure the condition within thirty (30) days of such compensation previously deferred notice, Executive may resign from employment with Corporation and earned Bank and/or its/their successors or assigns (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the "Notice of Termination") to Corporation and not yet paid by Bank and/or its/their successors or assigns and the Company.
(2) The Company shallprovisions of Section 6 of this Agreement shall apply; provided, promptly upon submission by however, that notwithstanding the foregoing, no benefits shall be payable to Executive of supporting documentation, pay or reimburse to the under this Section 5 unless Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's actually terminates employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days two years after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)Control.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Change in Control and Severance Agreement (Fidelity D & D Bancorp Inc)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control which occurs and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company's documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, "Termination of Employment" shall be defined as:
(i) The Executive's involuntary termination by the Company for any reason other than death, Disability or Cause; or
(ii) The Executive's termination for "Good Reason," defined as the occurrence of any of the following events without the Executive's written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any reassignment of the Executive to substantial duties materially inconsistent with the Executive's position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive's position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control; provided that the fact that the Company is no longer a publicly traded company or the Executive no longer has duties and responsibilities associated exclusively with a publicly traded company, such as Securities and Exchange Commission or stock exchange reporting responsibilities or investor or analyst relations responsibilities, shall not be deemed to be a reassignment of the Executive to substantial duties materially inconsistent with the Executive's position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive's position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any reduction in the Executive's base salary or targeted incentive bonus or commissions in effect immediately prior to the Change in Control, or failure by the Company to continue any bonus, stock or other incentive plans in effect immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable award opportunities/benefits), or any removal of the Executive from participation in such aforementioned plans;
(C) The discontinuance or reduction in benefits to the Executive under any qualified or nonqualified retirement or welfare plan maintained by the Company immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits), or the discontinuance of any fringe benefits or other perquisites that the Executive received immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits);
(D) Required relocation of the Executive's principal place of employment more than 50 miles from the Executive's place of employment prior to the Change in Control; or
(E) The Company's breach of any provision in this Agreement, provided that the Company has not cured such breach within 10 days following written notice by the Executive to the Company of such breach.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, may apply in writing to the Company for confirmation of such entitlement prior to the Executive's actual separation from employment, by following the claims procedure set forth in Section 15 hereof. The submission of such a request by the Executive shall not constitute "Cause" for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive's request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive's execution of a release (in the form attached hereto as Exhibit A), the Executive shall be entitled to (the "Change in Control Severance Benefits"):
(i) A cash severance benefit equal to two times the Executive's current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive's target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of (A) Company-provided such termination is health benefits (including vision and dental, if provided by the Company immediately prior to the Change in Control) until the Executive becomes eligible for Good Reason Medicare benefits and (B) other Company-provided welfare benefits (including executive life insurance, if provided by the Company immediately prior to the Change in Control) for two years, in each case, on the terms (or comparable terms) provided by the Company to the Executive immediately prior to the Change in Control. Health benefits shall be provided through continued coverage under the Company's group health plan, if allowed under the terms of such plan, or by the Company Without Cause (which includes delivery by the Company reimbursement of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned COBRA continuation coverage premiums paid by the Executive, all amounts of such compensation previously deferred and earned and not yet paid as determined by the Company.
(2) The Company shall; provided, promptly upon submission however, if the health plan is self-insured by the Executive Company, then the determination shall be made by the Executive. Any continuation of supporting documentationgroup health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. If COBRA continuation coverage is not available, pay or the Company shall reimburse to the Executive any costs and expenses paid or incurred by for premiums for comparable coverage, provided, however, that the Executive which would have been payable under Section 4.6 hereof if reimbursement shall not exceed the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum greater of (i) two times the Executive's Base Salary (as in effect on Date annual premium paid by the Company for such coverage at the date of Termination) and termination or (ii) two times the amount of the COBRA premium under the Company's group health plan for coverage comparable to that elected by the Executive's most recent Annual Bonus. If , (A) at the most recent Annual Bonus was a stock option or a stock grant, the value time of the bonus will be deemed to be Change of Control or (B) at the number of option shares times the closing price time of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Terminationrequired payment, the Company shall continue whichever is greater. Welfare benefits (other than disability health benefits)) shall be continued only to the extent permitted under the terms of such plans;
(iv) Continuation of the Executive's then current car benefit for one year in accordance with the Company car policy in effect at the time of termination.
(v) Continued coverage, during the six (6) years following the Executive's termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company's expense election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to extent available. The policy dollar coverage limits of any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments policy shall be made not less than the policy limit under any Company policy in place within five the one (51) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant year prior to this Section 6.4 that Good Reason exists for the Executive's termination of employment (the "Existing Policy") or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and that adequate remedy has not occurred shall be presumed correct former directors and shall govern unless officers at an annual premium equal to two times the party contesting Company's annual premium for the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determinationExisting Policy.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurredSubject to Section 11(a) hereof, the Company Executive's cash severance benefit under Section 4(c)(i) and (ii) shall immediately pay be paid in a lump sum cash payment within ten (10) days following the Executive's Termination of Employment, as defined in Section 4. Any payment made later than 10 days following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof) for whatever reason, shall include interest at the prime rate plus two percent, which shall begin accruing on the 10th day following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof). For purposes of this Section 4, "prime rate" shall be determined by reference to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required prime rate established by Comerica Bank (or its successor), in effect from time to repay such amounts to time commencing on the Company if any such dispute is finally determined adversely to 10th day following the Executive's Termination of Employment (or applicable due date under Section 11(a) hereof).
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive's employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive's employment with the Company, other than a termination due to the Executive's death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive's employment with respect the Company following a Change in Control due to the amount Executive's death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive's employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term (as defined in Section 6(c) of this Agreement, provided such termination ) shall occur and Executive’s employment is involuntarily terminated by the Bank and the Corporation without Cause or Executive resigns for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof)Reason, in lieu of any obligation each case within two (2) years following the Company may have pursuant Change in Control, Executive shall be entitled to Section 6.3 hereof:
(1) The Company shall pay to the Executive in receive his Accrued Benefits plus a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half three (1.53) times the sum of of: (i) the Executive's his Annual Base Salary (as in effect on Date of Termination) Salary; and (ii) his average cash bonus and other cash incentive compensation earned by him with respect to the Executive's most recent Annual Bonusthree calendar years immediately preceding the year of termination, which shall be paid to Executive within sixty (60) days following the date of his termination of employment. In addition, for a period of three (3) years from the date of termination of employment, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the three (3) years prior to his termination of employment. If the most recent Annual Bonus was a stock option or a stock grantBank and the Corporation cannot provide such benefits because Executive is no longer an Executive, the value Bank and the Corporation shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar health and welfare Executive benefits which he enjoyed prior to termination, which reimbursement shall continue until the expiration of three (3) years from the date of termination of employment or until Executive secures substantially similar benefits through other employment, whichever shall first occur, subject to Section 409A of the bonus will be deemed Internal Revenue Code of 1986, as amended (the “Code”), if applicable. Notwithstanding any provision of this Agreement to the contrary, Executive shall forfeit his rights to receive the payments and benefits set forth in Section 6(a) unless he executes a general release of claims in favor of the Bank and the Corporation in a form to be provided by the number Bank and the Corporation, and such release becomes effective and irrevocable in accordance with its terms, on or before the date that is sixty (60) days after Executive’s termination of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)employment.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under for in this Section 6.4 6 by seeking other employment or otherwise. Unless otherwise agreed to in writing, nor shall the amount of any payment or the benefit provided under for in this Section 6.4 6 shall not be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a the result of employment by another employeremployer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.
(c) As used in this Agreement, “Change in Control” shall mean a change in ownership or effective control applicable to the Corporation or the Bank as described in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (or any successor provision thereto) and the regulations thereunder.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs (as defined in Section 3 of this Agreement) shall occur and thereafter, there shall be:
(a) any involuntary termination of Executive's employment (other than for a disability wherein Executive is unable to perform all of his essential job functions taking into account any reasonable accommodations);
(b) any reduction in Executive's title, responsibilities, including reporting responsibilities, or authority, including such title, responsibilities or authority as such may be increased from time to time during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:;
(1c) The Company shall pay the assignment to the Executive in a lump sum in cash within five (5) days after of duties inconsistent with Executive's office on the Date of Termination, if not theretofore paid, Change in Control or as the same may be increased from time to time after the Change in Control;
(d) any reassignment of Executive to a location greater than twenty-five (25) miles from the location of Executive's office on the date of the Change in Control;
(e) any reduction in Executive's Annual Base Salary (as in effect on the Date of Terminationthe Change in Control or as the same may be increased from time to time after the Change in Control; or
(f) through any failure to provide Executive with benefits at least as favorable as those enjoyed by Executive under any of Corporation's or Bank's retirement or pension, life insurance, medical, health and accident, disability or other employee plans in which Executive participated at the Date time of the Change in Control, or the taking of any action that would materially reduce any of such benefits in effect at the time of the Change in Control; then, at the option of Executive, exercisable by Executive within 180 days after a Change in Control, Executive shall provide the Corporation and Bank notice of the existence of the condition and provide the Corporation and Bank thirty (30) days in which to cure such condition. In the event that the Corporation and Bank does not cure the condition within thirty (30) days of such notice, Executive may resign from employment with Corporation and Bank (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the "Notice of Termination") to Corporation and Bank and the provisions of Section 6 of this Agreement shall apply; notwithstanding the foregoing, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the no benefits shall be payable to Executive of supporting documentation, pay or reimburse to the under this Section 5 unless Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's actually terminates employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days two years after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)Control.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Change in Control and Severance Agreement (Fidelity D & D Bancorp Inc)
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term (as defined in Section 6(c) of this Agreement, provided such termination ) shall occur and Executive’s employment is involuntarily terminated by the Bank and the Corporation without Cause or Executive resigns for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof)Reason, in lieu each case within one hundred eighty (180) days of any obligation the Company may have pursuant Change in Control, Executive shall be entitled to Section 6.3 hereof:
(1) The Company shall pay to the Executive in receive his Accrued Benefits and a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's 2.99 times his Annual Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonusaggregate amount of all unpaid Retention Bonuses, if any, which shall be paid to Executive within sixty (60) days following the date of his termination of employment. In addition, for a period of 2.99 years from the date of termination of employment, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the 2.99 years prior to his termination of employment. If the most recent Annual Bonus was a stock option or a stock grantBank and the Corporation cannot provide such benefits because Executive is no longer an employee, the value Bank and the Corporation shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar health and welfare employee benefits which he enjoyed prior to termination, which reimbursement shall continue until the expiration of 2.99 years from the date of termination of employment or until Executive secures substantially similar benefits through other employment, whichever shall first occur, subject to Code Section 409A if applicable. Notwithstanding any provision of this Agreement to the contrary, Executive shall forfeit his rights to receive the payments and benefits set forth in Section 6(a) unless he executes a general release of claims in favor of the bonus will be deemed Bank and the Corporation in a form to be provided by the number Bank and the Corporation, and such release becomes effective and irrevocable in accordance with its terms, on or before the date that is sixty (60) days after Executive’s termination of option shares times the closing price employment. Notwithstanding any provision of the Common Stock for the 20 trading days prior this Agreement to the Date of Termination.
(4) During the 18-month period commencing on the Date of Terminationcontrary, if any benefit or payment hereunder would be treated as a “parachute payment” under Code Section 280G, the Company Bank and the Corporation shall continue benefits (other than disability benefits), at the Company's expense reduce such benefit or payment to the extent necessary to avoid treating such benefit or payment as a parachute payment. Executive and/or shall be entitled to only the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if reduced benefit or payment and shall forfeit any amount over and above the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)reduced amount.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under for in this Section 6.4 6 by seeking other employment or otherwise. Unless otherwise agreed to in writing, nor shall the amount of any payment or the benefit provided under for in this Section 6.4 6 shall not be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a the result of employment by another employeremployer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.
(c) As used in this Agreement, “Change in Control” shall mean:
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Sections 6 and 11(a) If hereunder, the Executive shall be entitled to severance payments under this Agreement shall be terminated within two years after only if there has been a Change in Control which and the Executive has incurred a Termination of Employment. For purposes of this Agreement during the two-year period following any Change in Control that occurs during the term of this Agreement, provided such “Termination of Employment” shall be defined as:
(a) The Executive’s involuntary termination is by the Executive for Good Reason or by the Company Without Cause for any reason other than death, Disability, Retirement or Cause; or
(b) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent:
(i) Any reassignment of the Executive to duties inconsistent with his position, title, duties, responsibilities and status with the Company immediately prior to the Change in Control, or a change in the Executive’s reporting responsibilities, including a change in the identity or the corporate position to which includes delivery the Executive reports, or a change in title (except for a promotion) in effect immediately prior to the Change in Control;
(ii) Any reduction in the Executive’s base salary in effect immediately prior to the Change in Control, or failure by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof)continue any bonus, in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as stock or incentive plans in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days immediately prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control (without the implementation of a comparable successor plan which provides the same benefits), or any removal of the Executive from participation in such aforementioned plans;
(iii) The discontinuance or reduction constitutes in benefits to the Executive of any qualified or may constitute non-qualified retirement or welfare plan maintained by the Company immediately prior to the Change in Control, or the discontinuance of any fringe benefits or other perquisites which the Executive received immediately prior to the Change in Control:
(iv) Required business traveling by the Executive on a significantly more frequent basis and for significantly longer periods of time than the Executive was required to travel immediately prior to the Change in Control unless the increase in required business traveling is on account of the Executive’s promotion;
(v) Any reassignment of the Executive’s duties that would require the Executive to relocate the Executive’s primary residence; or
(vi) The Company’s breach of any provision in this Agreement. If the Executive believes that the Executive is entitled to a Termination of Employment for Good Reason).
Reason as defined in subparagraph (b) The Company shall pay above, he may apply in writing to the Executive all legal fees and expenses incurred Company for confirmation of such entitlement prior to the Executive’s actual separation from employment, by following the claims procedure set forth in Section 15 hereof. The submission of such a request by the Executive as a result of a termination which entitles shall not constitute “Cause” for the Company to terminate the Executive to any payments as defined under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 3(c) hereof. Such payments shall be made within five (5) days after delivery of If the Executive's respective written requests ’s request for payment accompanied by such evidence a Good Reason Termination of fees Employment is denied under both the request and expenses incurred as the Company reasonably may require.
appeal procedures set forth in paragraphs (b) and (c) Any determination by of Section 15 hereof, then the Executive parties shall use their best efforts to resolve the claim within 90 days, after which the claim is submitted to arbitration pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination15(d).
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Change in Control Severance Agreement (Champion Enterprises Inc)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control which occurs and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any reassignment of the Executive to substantial duties materially inconsistent with the Executive’s position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control; provided that the fact that the Company is no longer a publicly traded company or the Executive no longer has duties and responsibilities associated exclusively with a publicly traded company, such as Securities and Exchange Commission or stock exchange reporting responsibilities or investor or analyst relations responsibilities, shall not be deemed to be a reassignment of the Executive to substantial duties materially inconsistent with the Executive’s position, duties, responsibilities and status with the Company immediately prior to the Change in Control or a substantial diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any reduction in the Executive’s base salary or targeted incentive bonus or commissions in effect immediately prior to the Change in Control, or failure by the Company to continue any bonus, stock or other incentive plans in effect immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable award opportunities/benefits), or any removal of the Executive from participation in such aforementioned plans;
(C) The discontinuance or reduction in benefits to the Executive under any qualified or nonqualified retirement or welfare plan maintained by the Company immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits), or the discontinuance of any fringe benefits or other perquisites that the Executive received immediately prior to the Change in Control (without the implementation of comparable successor plans that provide comparable benefits);
(D) Required relocation of the Executive’s principal place of employment more than 50 miles from the Executive’s place of employment prior to the Change in Control; or
(E) The Company’s breach of any provision in this Agreement, provided that the Company has not cured such breach within 10 days following written notice by the Executive to the Company of such breach.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, may apply in writing to the Company for confirmation of such entitlement prior to the Executive’s actual separation from employment, by following the claims procedure set forth in Section 15 hereof. The submission of such a request by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, provided such termination is upon the Executive’s execution of a release (in the form attached hereto as Exhibit A), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, if any, based on the number of days worked in the year of termination;
(iii) An amount equal to the positive difference, if any, between a prorated portion of the Executive’s target commissions for the year of termination, as established by the Company, under the terms of any commission plan that the Executive participated in at the date of termination of employment, based on the number of days worked in the year of termination, less any commissions otherwise paid or payable under such plan for Good Reason such year;
(iv) Subject to Section 6, continuation of Company-provided health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year, on the terms (or comparable terms) provided by the Company to the Executive immediately prior to the Change in Control. Health benefits shall be provided through continued coverage under the Company’s group health plan, if allowed under the terms of such plan, or by the Company Without Cause (which includes delivery by the Company reimbursement of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned COBRA continuation coverage premiums paid by the Executive, all amounts of such compensation previously deferred and earned and not yet paid as determined by the Company.
(2) The Company shall; provided, promptly upon submission however, if the health plan is self-insured by the Executive Company, then the determination shall be made by the Executive. Any continuation of supporting documentationgroup health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. If COBRA continuation coverage is not available, pay or the Company shall reimburse to the Executive any costs and expenses paid or incurred by for premiums for comparable coverage, provided, however, that the Executive which would have been payable under Section 4.6 hereof if reimbursement shall not exceed the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum greater of (i) two times the Executive's Base Salary (as in effect on Date annual premium paid by the Company for such coverage at the date of Termination) and termination or (ii) two times the amount of the COBRA premium under the Company’s group health plan for coverage comparable to that elected by the Executive's most recent Annual Bonus. If , (A) at the most recent Annual Bonus was a stock option or a stock grant, the value time of the bonus will be deemed to be Change of Control or (B) at the number of option shares times the closing price time of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Terminationrequired payment, the Company shall continue whichever is greater. Welfare benefits (other than disability health benefits)) shall be continued only to the extent permitted under the terms of such plans;
(v) Continuation of the Executive’s then current car benefit for one year in accordance with the Company car policy in effect at the time of termination.
(vi) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company's expense ’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the Executive and/or extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's ’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and that adequate remedy has not occurred shall be presumed correct former directors and shall govern unless officers at an annual premium equal to two times the party contesting Company’s annual premium for the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determinationExisting Policy.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurredSubject to Section 11(a) hereof, the Company Executive’s cash severance benefit under Section 4(c)(i), (ii) and (iii) shall immediately pay be paid in a lump sum cash payment within ten (10) days following the Executive’s Termination of Employment, as defined in Section 4. Any payment made later than 10 days following the Executive’s Termination of Employment (or applicable due date under Section 11(a) hereof) for whatever reason, shall include interest at the prime rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under Section 11(a) hereof). For purposes of this Section 4, “prime rate” shall be determined by reference to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required prime rate established by Comerica Bank (or its successor), in effect from time to repay such amounts to time commencing on the Company if any such dispute is finally determined adversely to 10th day following the Executive’s Termination of Employment (or applicable due date under Section 11(a) hereof).
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code. Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred plans;
(iv) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and earned and not yet paid officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy.
(2d) The Company shallSubject to Section 11(a) hereof, promptly upon submission by and the Executive of supporting documentationCode Section 409A limitations set forth below, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable Executive’s cash severance benefit under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination4(e)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee”, as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement A termination of employment shall be terminated deemed to occur if, within two years after one hundred eighty (180) days following a Change in Control which occurs during the term (as defined in Section 3 of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu any of any obligation the Company may have pursuant to Section 6.3 hereoffollowing events occur:
(1a) The Company shall pay any involuntary termination of Executive's employment (other than for a disability wherein Executive is unable to the Executive perform all of his essential job functions, taking into account any reasonable accommodations);
(b) any involuntary material reduction in a lump sum in cash within five Executive's title, responsibilities (5) days after including reporting responsibilities), or authority, as such existed as of the Date of Termination, if not theretofore paid, Change of Control ;
(c) the assignment to Executive of substantial duties which are materially inconsistent with Executive's office on the Date of Change in Control, or as have been increased from time to time after the Change in Control, unless Executive has voluntarily consented to such assignments;
(d) any involuntary reassignment of Executive to a principal office location greater than fifty (50) miles from the location of Executive's principal office on the Date of the Change in Control;
(e) any material reduction (i.e., defined for this purpose as a reduction of ten percent (10%) or more) in Executive's Annual Base Salary (as in effect on the Date of Terminationthe Change in Control, unless Executive has voluntarily consented to such reduction; or
(f) through any failure to provide Executive with benefits that, overall, are materially comparable to those enjoyed by Executive under Corporation's or Bank's retirement or pension, life insurance, medical, health and accident, disability and other employee benefit plans in which Executive participated at the time of the Change in Control, or the taking of any action that would, overall, materially reduce such benefits in effect as of the Date of TerminationChange in Control unless such reduction is part of a reduction applicable to all Bank employees or all Bank executives. In the event of a Change of Control, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts at his option exercisable within 180 days after such Change in Control first occurred, shall provide the Corporation and Bank and/or its/their successors or assigns notice of the existence of the condition which Executive believes constitutes a breach of its/their obligation(s) and provide the Corporation and Bank and/or its/their successors or assigns thirty (30) days in which to cure such condition. In the event that the Corporation and Bank and/or its/their successors or assigns disagrees that a breach has occurred or otherwise does not cure the condition alleged to have caused the breach within thirty (30) days of such compensation previously deferred notice, Executive may resign from employment with Corporation and earned Bank and/or its/their successors or assigns (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the "Notice of Termination") to Corporation and not yet paid by Bank and/or its/their successors or assigns and the Company.
(2) The Company shallprovisions of Section 6 of this Agreement shall apply; provided, promptly upon submission by however, that notwithstanding the foregoing, no benefits shall be payable to Executive of supporting documentation, pay or reimburse to the under this Section 5 unless Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's actually terminates his/her employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days two years after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason)Control.
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Change in Control and Severance Agreement (Fidelity D & D Bancorp Inc)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such a written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to two times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of (A) Company-provided such termination is health benefits (including vision and dental, if provided by the Company immediately prior to the Change in Control) until the Executive becomes eligible for Medicare benefits or, if earlier, the death of the Executive (“Change in Control Medical Benefit Continuation Period”) and (B) other Company-provided welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for two years or, if earlier, the death of the Executive (“Change in Control Other Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Medical Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause (which includes delivery by could cause the Company of a notice of nonrenewal of this Agreement pursuant benefits to Section 3 hereof), in lieu of any obligation the Company may have pursuant be taxable to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts the Company shall provide the benefits at the required level through the reimbursement of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive for premiums for the purchase of supporting documentationindividual insurance coverage; provided, pay or however, that the Company shall only be required to reimburse premiums for such coverage to the Executive any costs and expenses paid or incurred by extent the Executive which would have been payable under Section 4.6 hereof if premiums do not exceed the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum greater of (i) two times the annual premium paid by the Company for such coverage at the date of termination or (ii) two times the amount of the COBRA premium under the Company’s group health plan for coverage comparable to that elected by the Executive (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such plans;
(iv) Continuation of the Executive's Base Salary (as ’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect on Date at the time of Terminationtermination.
(v) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy.
(d) Subject to Section 11(a) hereof and the Code Section 409A limitations set forth below, the Executive’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee,” as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such a written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided health benefits for the Executive and his spouse and dependent children under age 26, if provided by the Company to such termination is family members immediately prior to the Change in Control (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred and earned and not yet paid by plans;
(iv) Continuation of the CompanyExecutive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination.
(2v) The Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company shallprior to the date of termination of his employment, promptly upon submission under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive of supporting documentationwith such a policy, pay or reimburse to the Executive extent available. The policy dollar coverage limits of any costs and expenses paid or incurred such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Executive which would have been payable under Section 4.6 hereof if Company for all of its current and former directors and officers at an annual premium equal to two times the Executive's employment had not terminatedCompany’s annual premium for the Existing Policy.
(3d) The Company shall pay Subject to Section 11(a) hereof and the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) Code Section 409A limitations set forth below, the Executive's Base Salary (as in effect on Date of Termination’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee,” as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive other than for Good Reason, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided such termination is health (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for one year or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred and earned and not yet paid by plans;
(iv) Continuation of the CompanyExecutive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination.
(2v) The Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company shallprior to the date of termination of his employment, promptly upon submission under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive of supporting documentationwith such a policy, pay or reimburse to the Executive extent available. The policy dollar coverage limits of any costs and expenses paid or incurred such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Executive which would have been payable under Section 4.6 hereof if Company for all of its current and former directors and officers at an annual premium equal to two times the Executive's employment had not terminatedCompany’s annual premium for the Existing Policy.
(3d) The Company shall pay Subject to Section 11(a) hereof, and the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) Code Section 409A limitations set forth below, the Executive's Base Salary (as in effect on Date of Termination’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee”, as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Executive Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half three (1.53) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 1836-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Termination Agreement (Texas Biotechnology Corp /De/)
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4, in lieu of the severance benefits the Executive is entitled to under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The severance benefit provided under this Section 4 is in lieu of cash severance payments offered under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s breach of any provision in this Agreement.
(b) The Executive who believes the Executive is entitled to a Termination of Employment for Good Reason, as defined in Section 4 above, shall provide written notice of the existence of the condition to the Company within 90 days after existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such a written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the Executive’s request for a Good Reason Termination of Employment is denied under both the request and appeal procedures set forth in paragraphs (b) and (c) of Section 15 hereof, then the parties shall use their best efforts to resolve the claim within 90 days after the claim is submitted to arbitration pursuant to Section 15(d).
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to (the “Change in Control Severance Benefits”):
(i) A cash severance benefit equal to two times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, continuation of Company-provided health benefits for the Executive and his spouse and dependent children under age 26, if provided by the Company to such termination is family members immediately prior to the Change in Control (including vision and dental, if provided by the Company immediately prior to the Change in Control) and welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive immediately prior to the Change in Control) for two years or, if earlier, the death of the Executive (the “Change in Control Benefit Continuation Period”), in each case, at the same level and on comparable terms as provided by the Company to the Executive immediately prior to the Change in Control, with the Company paying any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Health benefits provided during the Change in Control Benefit Continuation Period shall be provided in such a manner that the benefits (including the associated costs and premiums) are excluded from the Executive’s income for Good Reason federal income tax purposes and, if the Company reasonably determines that providing continued coverage under one or more of the health care benefit plans maintained by the Company Without Cause could cause the benefits to be taxable to the Executive, the Company shall provide the benefits at the required level through the reimbursement of the Executive for premiums for the purchase of individual insurance coverage; provided, however, that the Company shall only be required to reimburse premiums for such coverage to the extent the premiums do not exceed the greater of (which includes delivery i) two times the annual premium paid by the Company for such coverage at the date of a notice termination or (ii) two times the amount of nonrenewal of this Agreement pursuant the COBRA premium under the Company’s group health plan for coverage comparable to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned that elected by the Executive, all amounts (A) at the time of the Change of Control or (B) at the time of the required payment, whichever is greater. Any continuation of group health plan coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code. Welfare benefits (other than health benefits) shall be continued only to the extent permitted under the terms of such compensation previously deferred and earned and not yet paid by plans;
(iv) Continuation of the CompanyExecutive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination.
(2v) The Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company shallprior to the date of termination of his employment, promptly upon submission under any directors and officers liability insurance policy maintained by the Company (or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive of supporting documentationwith such a policy, pay or reimburse to the Executive extent available. The policy dollar coverage limits of any costs and expenses paid or incurred such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Executive which would have been payable under Section 4.6 hereof if Company for all of its current and former directors and officers at an annual premium equal to two times the Executive's employment had not terminatedCompany’s annual premium for the Existing Policy.
(3d) The Company shall pay Subject to Section 11(a) hereof and the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) Code Section 409A limitations set forth below, the Executive's Base Salary (as in effect on Date of Termination’s cash severance benefit under Section 4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee,” as defined in Code Section 409A, commencing at Termination of Employment, the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum, and the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control, provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive other than for Good Reason, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control If, during ------------------------------------------------------- the Effective Period, the Company or any affiliate of the Company by which occurs during the term of this Agreement, provided such termination is by the Executive is employed terminates the Executive's employment, other than for Cause, or any event constituting Good Reason occurs and the Executive terminates employment with the Company for Good Reason or by within six months after such occurrence, the Company Without Cause (which includes delivery by will pay the Company of a notice of nonrenewal of this Agreement pursuant following to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereofExecutive:
(1i) The Cash in the amount of the Executive's annual base salary through the Date of Termination to the extent not theretofore paid;
(ii) Any and all compensation deferred under a deferred compensation plan or program of the Company shall pay or any of its affiliates in a lump sum cash payment;
(iii) Cash in an amount equal to the product of three times the Executive's annual base salary at the greater of (A) the rate in effect at the time Notice of Termination is given or (B) the rate in effect immediately preceding the Change in Control, payable in equal monthly installments over a period of three years following the Date of Termination (the "CIC Salary Continuation Period");
(iv) A lump sum cash amount equal to the product of three times the highest total bonus paid or payable in any one year, including any amounts deferred (whether mandatory or elective), to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days three years immediately prior to the Date of Termination.;
(4v) During The continuation of the 18-month period commencing on provision of health insurance, dental insurance and life insurance benefits for the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense CIC Salary Continuation Period to the Executive and/or and the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies of the Company as in effect and applicable generally to other peer executives and their families during the 90-day period immediately preceding the Effective Period or on the Date of Termination, at the election of the Executive; provided, however, that if the Executive becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under Section 4.5 hereof another employer provided plan, the medical and other welfare benefits described herein will be secondary to those provided under such other plan during such applicable period of eligibility;
(vi) The continued accrual of years of service under any and all defined benefit retirement plans sponsored or maintained by the Company or by any affiliate controlled by the Company in effect on and in which the Executive was a Participant on the Date of Termination, in each case for the CIC Salary Continuation Period, but in no event beyond the date the Executive or Executive's spouse begins to receive a benefit under any such plan; and
(vii) The immediate vesting of benefits under the Company's Executive Supplemental Retirement Plan of 1990, as amended and in effect at either the Date of Termination or immediately preceding the Change in Control, at the election of the Executive, as if the Executive had attained at least age 55 and at least 5 years of service, thereby entitling the Executive to Normal Retirement Benefits commencing at any time on or after the Executive's employment had not been terminated (without giving Normal Retirement Date or Early Retirement Benefits commencing at any time on or after the Executive attains or would have attained age 55, in each case as such term is defined in said plan; and, to the extent permitted by applicable governmental laws and regulations, immediate eligibility for any and all non-pension post-retirement benefits under any and all plans and policies of the Company or any affiliate of the Company, as amended and in effect to any reduction in such benefits subsequent to at either the Date of Termination or immediately preceding the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to Control, at the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery election of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred , as the Company reasonably may require.
(c) Any determination by if the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination had attained at least age 55 and regardless of employment and that adequate remedy has whether or not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive actually retires under any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment pension or otherwiseretirement plan, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefitsprovided, deferred compensation or any compensation earned by however, that the Executive as a result of employment by another employermust also meet any and all other requirements under such plans and policies in order to participate in such benefits.
Appears in 1 contract
Termination of Employment Following a Change in Control. (aSubject to Section 11(a) If this Agreement hereunder, the Executive shall be terminated within two years after entitled to the Change in Control Severance Benefits (as defined in Section 4(c) below) set forth in this Section 4 and not the severance benefits under Section 3 of this Agreement, if there has been a Change in Control and the Executive has incurred a Termination of Employment. The Executive is not entitled to receive severance payments under the Company’s documented severance policy, if any.
(a) For purposes of Section 4 of the Agreement, “Termination of Employment” shall be defined as:
(i) The Executive’s involuntary termination by the Company for any reason other than death, Disability or Cause; provided such termination constitutes a “separation from service” as defined in Code Section 409A; or
(ii) The Executive’s termination for “Good Reason,” defined as the occurrence of any of the following events without the Executive’s written consent, if the Executive terminates employment within one (1) year following the occurrence of such event:
(A) Any material diminution in the Executive’s position, duties, responsibilities or status with the Company from his position, duties, responsibilities or status with the Company immediately prior to the Change in Control;
(B) Any material diminution in the Executive’s base salary in effect immediately prior to the Change in Control, which occurs shall be a reduction in such base salary of five (5%) percent or more unless a greater reduction is required by Code Section 409A to constitute an “involuntary separation from service”;
(C) A material required relocation of the Executive’s principal place of employment which shall be a relocation of more than 50 miles from the Executive’s place of employment prior to the Change in Control unless a relocation of a greater distance is required by Code Section 409A to constitute an “involuntary separation from service”; or
(D) The Company’s material breach of any provision in this Agreement.
(b) If the Executive believes that Good Reason, as defined in Section 4 above exists, the Executive shall provide written notice of the existence of the condition to the Company within 90 days after the initial existence of the condition and shall provide the Company with a period of at least 30 days in which to cure the condition and not be required to pay the Good Reason severance. The submission of such a written notification by the Executive shall not constitute “Cause” for the Company to terminate the Executive as defined under Section 2(a) hereof. If the condition is not cured within the 30-day period, to receive a Good Reason Termination of Employment, the Executive shall terminate employment within 30 days following the expiration of the cure period.
(c) Upon satisfaction of the requirements set forth in Sections 4 or 11(a) hereof and with respect to any one or more Changes in Control that may occur during the term of this Agreement, upon the Executive’s execution of a release that becomes irrevocable within 60 days following the Executive’s Termination of Employment (in the form attached hereto as Exhibit A) (the “Release”), the Executive shall be entitled to the following severance benefits (the “Change in Control Severance Benefits”) to commence when the Release becomes irrevocable within such 60-day period (subject to the Specified Employee restrictions set forth below) and provided that if the 60-day period spans two calendar years, the benefits shall commence in the second calendar year:
(i) A cash severance benefit equal to one times the Executive’s current annual base salary, as in effect at the time of the Change in Control;
(ii) A prorated portion of the Executive’s target bonus for the year of termination, based on the number of days worked in the year of termination;
(iii) Subject to Section 6, following the Executive’s election of COBRA and submission of monthly receipts evidencing the Executive’s payment for monthly COBRA coverage for the Executive, the Executive’s spouse and dependent children under age 26, if health coverage at the same level was provided by the Company to such termination is family members at Termination of Employment (including vision and dental, as applicable), the Company shall reimburse the Executive for such COBRA payments for one year of coverage, or if earlier, for the period until the death of the Executive (the Change in Control Benefit Continuation Period”). To the extent permissible under the terms of the Company’s welfare plans, the Company also shall provide the Executive with welfare benefits (including executive life insurance coverage, if provided by the Company to the Executive at Termination of Employment) for one year or, if earlier, the death of the Executive, in each case, at the same level and on comparable terms as provided by the Company to its employees from time to time during the Benefit Continuation Period, with the Company paying (or reimbursing the Executive, as applicable) for any monthly premiums otherwise required to be paid by the Executive to continue such coverage. Any reimbursement for Good Reason COBRA coverage under this paragraph shall run concurrently with the period of required COBRA continuation coverage under the Code;
(iv) Continuation of the Executive’s then current car benefit for one year or, if earlier, the death of the Executive, in accordance with the Company car policy in effect at the time of termination; and
(v) Continued coverage, during the six (6) years following the Executive’s termination for his actions or omissions as an officer and, if applicable, director of the Company prior to the date of termination of his employment, under any directors and officers liability insurance policy maintained by the Company Without Cause (which includes delivery or, if the Company does not maintain such a policy, by its affiliates) for its former directors and officers or, at the Company’s election, for the current directors and officers. If the Company or its affiliates does not otherwise maintain such a policy, then the Company shall be required to provide the Executive with such a policy, to the extent available. The policy dollar coverage limits of any such policy shall be not less than the policy limit under any Company policy in place within the one (1) year prior to the Executive’s termination of employment (the “Existing Policy”) or, if less, the policy dollar coverage limit that can be purchased by the Company for all of a notice of nonrenewal of this Agreement pursuant its current and former directors and officers at an annual premium equal to two times the Company’s annual premium for the Existing Policy.
(d) Subject to Section 3 11(a) hereof), in lieu of any obligation the Company may have pursuant to Release timing restrictions set forth above and the Code Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid409A Specified Employee limitations set forth below, the Executive's Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable ’s cash severance benefit under Section 4.6 hereof if the Executive's employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination4(c)(i) and (ii) shall be paid in a lump sum cash payment within ten (10) days following the Executive's most recent Annual Bonus’s Termination of Employment, as defined in Section 4. If Any payment, including amounts suspended under Code Section 409A, made later than 10 days following the most recent Annual Bonus was Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof) for whatever reason, shall include interest at the Prime Rate plus two percent, which shall begin accruing on the 10th day following the Executive’s Termination of Employment (or applicable due date under this Section 4 or Section 11(a) hereof). Notwithstanding the foregoing, if at the time of Termination of Employment the Executive constitutes a stock option or a stock grant“Specified Employee,” as defined in Code Section 409A, commencing at Termination of Employment (subject to the Release timing requirements set forth above), the value Executive shall receive the benefits that are exempt from Code Section 409A and shall receive the non-exempt payments until attainment of any applicable Code Section 409A cap, at which time the remaining non-exempt payments shall be suspended. When a period of six months has lapsed from the Executive’s Termination of Employment or, if earlier, the death of the bonus will Executive, any suspended payments shall be deemed to be aggregated and paid in a lump sum on the number of option shares times the closing price first day of the Common Stock for next month, and the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expensesremaining compensation, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executivepaid in accordance with its regular schedule.
(e) The Section 4 of this Agreement shall terminate upon the first of the following events to occur:
(i) Three years from the date hereof if a Change in Control has not occurred within such three-year period;
(ii) Termination of the Executive’s employment with the Company prior to a Change in Control; provided, however, if there is a Change in Control within six months after the termination of the Executive’s employment with the Company, other than a termination due to the Executive’s death or Disability, an involuntary termination by the Company for Cause or a termination of employment by the Executive other than for Good Reason, then the Agreement shall not be required deemed to mitigate damages have terminated and the Executive shall be entitled to receive the Change in Control Severance Benefits provided in Section 4, less any Regular Severance Benefits the Executive has been paid under Section 3, in lieu of the severance benefits the Executive is entitled to under Section 3;
(iii) The expiration of two years following a Change in Control;
(iv) Termination of the Executive’s employment with respect the Company following a Change in Control due to the amount Executive’s death or Disability;
(v) Termination of any payment provided under this Section 6.4 the Executive’s employment by seeking other the Company for Cause following a Change in Control; or
(vi) Termination of employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as for other than Good Reason following the date of a result Change in Control. Unless Section 4 of employment by another employerthis Agreement has first terminated under clauses (ii) through (vi) hereof, commencing on the third anniversary of the date of this Agreement, and on each one-year anniversary thereafter, Section 4 of this Agreement shall be extended for one additional year, unless at least 180 days prior to any such anniversary, the Company notifies the Executive in writing that it shall not extend the term of Section 4 of this Agreement.
Appears in 1 contract
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's ’s Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's ’s employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's ’s Base Salary (as in effect on Date of Termination) and (ii) the Executive's ’s most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's ’s expense to the Executive and/or the Executive's ’s family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's ’s employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's ’s respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's ’s termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Termination Agreement (Encysive Pharmaceuticals Inc)
Termination of Employment Following a Change in Control. (a) If this Agreement shall be terminated within two years after a Change in Control which occurs during the term of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu of any obligation the Company may have pursuant to Section 6.3 hereof:
(1) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination, if not theretofore paid, the Executive's ’s Base Salary (as in effect on the Date of Termination) through the Date of Termination, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts of such compensation previously deferred and earned and not yet paid by the Company.
(2) The Company shall, promptly upon submission by the Executive of supporting documentation, pay or reimburse to the Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's ’s employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days after the Date of Termination a severance payment equal to one and one-one half (1.511/2) times the sum of (i) the Executive's ’s Base Salary (as in effect on Date of Termination) and (ii) the Executive's ’s most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's ’s expense to the Executive and/or the Executive's ’s family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's ’s employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereof. Such payments shall be made within five (5) days after delivery of the Executive's ’s respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's ’s termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Termination Agreement (Encysive Pharmaceuticals Inc)
Termination of Employment Following a Change in Control. (a) If this Agreement A termination of employment shall be terminated deemed to occur if, within two years after one hundred eighty (180) days following a Change in Control which occurs during the term (as defined in Section 3 of this Agreement, provided such termination is by the Executive for Good Reason or by the Company Without Cause (which includes delivery by the Company of a notice of nonrenewal of this Agreement pursuant to Section 3 hereof), in lieu any of any obligation the Company may have pursuant to Section 6.3 hereoffollowing events occur:
(1a) The Company shall pay any involuntary termination of Executive's employment (other than for a disability wherein Executive is unable to the Executive perform all of his essential job functions, taking into account any reasonable accommodations);
(b) any involuntary material reduction in a lump sum in cash within five Executive's title, responsibilities (5) days after including reporting responsibilities), or authority, as such existed as of the Date of Termination, if not theretofore paid, Change of Control ;
(c) the assignment to Executive of substantial duties which are materially inconsistent with Executive's office on the Date of Change in Control, or as have been increased from time to time after the Change in Control, unless Executive has voluntarily consented to such assignments;
(d) any involuntary reassignment of Executive to a principal office location greater than fifty (50) miles from the location of Executive's principal office on the Date of the Change in Control;
(e) any material reduction (i.e., defined for this purpose as a reduction of ten percent (10%) or more) in Executive's Annual Base Salary (as in effect on the Date of Terminationthe Change in Control, unless Executive has voluntarily consented to such reduction; or
(f) through any failure to provide Executive with benefits that, overall, are materially comparable to those enjoyed by Executive under Corporation's or Bank's retirement or pension, life insurance, medical, health and accident, disability and other employee benefit plans in which Executive participated at the time of the Change in Control, or the taking of any action that would, overall, materially reduce such benefits in effect as of the Date of TerminationChange in Control unless such reduction is part of a reduction applicable to all Bank employees or all Bank executives. In the event of a Change of Control, and in the case of compensation previously deferred and bonuses previously earned by the Executive, all amounts at his option exercisable within 180 days after such Change in Control first occurred, shall provide the Corporation and Bank and/or its/their successors or assigns notice of the existence of the condition which Executive believes constitutes a breach of its/their obligation(s) and provide the Corporation and Bank and/or its/their successors or assigns thirty (30) days in which to cure such condition. In the event that the Corporation and Bank and/or its/their successors or assigns disagrees that a breach has occurred or otherwise does not cure the condition alleged to have caused the breach within thirty (30) days of such compensation previously deferred notice, Executive may resign from employment with Corporation and earned Bank and/or its/their successors or assigns (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the "Notice of Termination") to Corporation and not yet paid by Bank and/or its/their successors or assigns and the Company.
(2) The Company shallprovisions of Section 6 of this Agreement shall apply; provided, promptly upon submission by however, that notwithstanding the foregoing, no benefits shall be payable to Executive of supporting documentation, pay or reimburse to the under this Section 5 unless Executive any costs and expenses paid or incurred by the Executive which would have been payable under Section 4.6 hereof if the Executive's actually terminates his/her employment had not terminated.
(3) The Company shall pay to the Executive in a lump sum in cash within five (5) days two years after the Date of Termination a severance payment equal to one and one-half (1.5) times the sum of (i) the Executive's Base Salary (as in effect on Date of Termination) and (ii) the Executive's most recent Annual Bonus. If the most recent Annual Bonus was a stock option or a stock grant, the value of the bonus will be deemed to be the number of option shares times the closing price of the Common Stock for the 20 trading days prior to the Date of Termination.
(4) During the 18-month period commencing on the Date of Termination, the Company shall continue benefits (other than disability benefits), at the Company's expense to the Executive and/or the Executive's family at least equal to those which would have been provided to them under Section 4.5 hereof if the Executive's employment had not been terminated (without giving effect to any reduction in such benefits subsequent to the Change in Control which reduction constitutes or may constitute Good Reason).
(b) The Company shall pay to the Executive all legal fees and expenses incurred by the Executive as a result of a termination which entitles the Executive to any payments under Section 6.4 hereof including all such fees and expenses, if any, incurred in contesting or disputing any Notice of Termination under Section 5.3 hereof or in seeking to obtain or enforce any right or benefit provided by Section 6.4 hereofControl. Such payments shall be made within five (5) days after delivery of the Executive's respective written requests for payment accompanied by such evidence of fees and expenses incurred as the Company reasonably may require.
(c) Any determination by the Executive pursuant to this Section 6.4 that Good Reason exists for the Executive's termination of employment and that adequate remedy has not occurred shall be presumed correct and shall govern unless the party contesting the determination shows by a clear preponderance of the evidence that it was not a good faith reasonable determination.
(d) Notwithstanding any dispute concerning whether Good Reason exists for termination of employment or whether adequate remedy has occurred, the Company shall immediately pay to the Executive any amounts otherwise due under this Section 6.4. The Executive may be required to repay such amounts to the Company if any such dispute is finally determined adversely to the Executive.
(e) The Executive shall not be required to mitigate damages with respect to the amount of any payment provided under this Section 6.4 by seeking other employment or otherwise, nor shall the amount of any payment provided under this Section 6.4 be reduced by retirement benefits, deferred compensation or any compensation earned by the Executive as a result of employment by another employer.
Appears in 1 contract
Sources: Change in Control and Severance Agreement (Fidelity D & D Bancorp Inc)