TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION. 3.1. Notwithstanding any other provisions of this Agreement, Company shall have the right to terminate Employee’s employment under this Agreement at any time prior to the expiration of the Term for any of the following reasons: (a) For “cause” upon the determination by the Company’s independent directors of the Board who are neither employees of nor Affiliated with Company or any subsidiary of Company apart from his or her capacity as a member of the Board and any Board committee and who otherwise have no interest in such determination (“Independent Directors”) that “cause” exists for the termination of the employment relationship. As used in this Section 3.1(a), the term “cause” shall mean (i) Employee’s gross negligence or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; or (ii) Employee’s final conviction of a felony or of a misdemeanor involving moral turpitude; (iii) Employee’s involvement in a conflict of interest as referenced in Sections 1.3 and 1.4 with respect to which Company makes a good faith determination to terminate the employment of Employee; or (iv) Employee’s material breach of any material provision of this Agreement which remains uncorrected for 30 days following written notice to Employee by Company of such breach. It is expressly acknowledged and agreed that the decision as to whether “cause” exists for termination of the employment relationship by Company is delegated to the Independent Directors of the Board of Company for determination; (b) For any other reason whatsoever, with or without cause, in the sole discretion of the Company’s Independent Directors of the Board; (c) Upon Employee’s death; or (d) To the extent allowed by law, upon Employee’s becoming disabled (as defined by Section 409A of the Code) by accident, sickness or other circumstance which renders him mentally or physically incapable of performing the duties and services required of Employee, as determined in good faith by Company and in accordance with Section 409A of the Code and any guidance issued thereunder. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute a “Termination for Cause” if made pursuant to Section 3.1(a); the effect of such termination is specified in Section 3.4. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.1(b); the effect of such termination is specified in Section 3.6(a). The effect of the employment relationship being terminated pursuant to Section 3.1(c) or (d) as a result of Employee’s death or disability is specified in Section 3.6(b). 3.2. Notwithstanding any other provisions of this Agreement except Section 8.5, Employee shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons: (a) the occurrence of an Involuntary Termination as defined in and in accordance with the provisions of Section 3.5; or (b) For any other reason whatsoever, in the sole discretion of Employee. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.2(a); the effect of such termination is specified in Section 3.6(a), 3.6(c) or 3.6(d), as applicable. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 3.2(b); the effect of such termination is specified in Section 3.3. 3.3. Upon a “Voluntary Termination” of the employment relationship by Employee prior to expiration of the Term, all future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of termination. Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination and, if such termination is for reason of retirement after age 65, Employee and his family shall be entitled to the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the his retirement date, in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the retirement date occurred); provided, however, that while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee or a family member is eligible to receive medical or other welfare benefits under Medicare, the medical and other welfare benefits described herein will be secondary to those provided under Medicare during such applicable period of eligibility. Employee shall not be entitled to any bonuses or incentive compensation not yet paid at the date of such termination. 3.4. If Employee’s employment hereunder shall be terminated by Company for Cause prior to expiration of the Term, all future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of termination. Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination, but Employee shall not be entitled to any bonuses or incentive compensation not yet paid at the date of such termination. 3.5. As used in this Agreement, “Involuntary Termination” shall also mean termination of Employee’s employment with Company if such termination results from termination by Employee, in accordance with the requirements of this Section 3.5, in connection with or based upon any of the following conditions arising without the consent of Employee: (a) A material reduction in the nature or scope of Employee’s duties and/or responsibilities as such duties and/or responsibilities are constituted as of the effective date of this Agreement or later agreed to by Employee and Company; (b) A material reduction in Employee’s base pay (except as part of a general cutback for all employees or officers); (c) A material change in the location for the primary performance of Employee’s services under this Agreement from the city in which Employee was serving at the time of notification to a city, which change must be to a location that is 50 or more miles away from the location at the time of such notification; or (d) A material breach by Company of any material provision of this Agreement. Employee shall provide notice of any such reduction, change or breach upon which Employee intends to rely as the basis for an Involuntary Termination within 45 days of the occurrence of such reduction, change or breach. The Company shall have 30 days following the receipt of such notice to remedy the condition constituting such reduction, change or breach and, if so remedied, any termination of Employee’s employment hereunder on the basis of the circumstances described in such notice shall be considered a Voluntary Termination pursuant to Section 3.2(b), with the effects described in Section 3.3. If the Company does not remedy the condition that has been the subject of a notice as described in this Section within 30 days of the Company’s receipt of such notice, Executive must terminate his employment within 90 days following the occurrence of such condition in order for such termination to be considered an Involuntary Termination for purposes of this Agreement. 3.6. Upon any Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term, Employee shall be entitled to receive pro rata base salary and benefits (including payment for accrued, but unused, vacation) through the date of termination. Depending upon the type of Involuntary Termination, Employee or his estate may be entitled to additional compensation and/or benefits, as described below. (a) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a), Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days after the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the termination date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the Involuntary Termination Date, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through such date by 365 (366 in leap years), payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(a); (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of one year following the Involuntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee; provided, however, that although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of one year following the Involuntary Termination Date; provided, however, that the cost of such benefits to Company shall not exceed the applicable dollar amount as in effect under Section 402(g)(1)(B) of the Code for the year in which the Involuntary Termination Date occurred; and (v) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan. (b) Upon a termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(c) or (d), Employee or his beneficiary shall be entitled to (i) cash in the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the date of termination, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through the date of termination by 365 (366 in leap years), payable no later than 90 days following the date of termination or, if earlier, the date that is two and one-half months after the end of the calendar year in which the date of termination occurred; (ii) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan [and (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the Involuntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee or eligible family member, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred); provided, however, that while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under 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. (c) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a) within 24 months following a Change of Control, Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of 2.99 times one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days of the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the Involuntary Termination Date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) a lump sum cash amount equal to the product of 2.99 times the target bonus compensation at the greater of (A) the target bonus compensation in effect at the time notice of termination is given or (B) the target bonus compensation in effect immediately preceding the Change of Control Date, payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(c); (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the date of termination to Employee and Employee’s family in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred); provided, however, that although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of 18 months following the Involunta
Appears in 1 contract
TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION. 3.1. Notwithstanding any other provisions of this Agreement, Company shall have the right to terminate Employee’s employment under this Agreement at any time prior to the expiration of the Term for any of the following reasons:
(a) For “cause” upon the determination by the Company’s independent directors of the Board who are neither employees of nor Affiliated with Company or any subsidiary of Company apart from his or her capacity as a member of the Board and any Board committee and who otherwise have no interest in such determination (“Independent Directors”) that “cause” exists for the termination of the employment relationship. As used in this Section 3.1(a), the term “cause” shall mean (i) Employee’s gross negligence or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; or (ii) Employee’s final conviction of a felony or of a misdemeanor involving moral turpitude; (iii) Employee’s involvement in a conflict of interest as referenced in Sections 1.3 and 1.4 with respect to which Company makes a good faith determination to terminate the employment of Employee; or (iv) Employee’s material breach of any material provision of this Agreement which remains uncorrected for 30 days following written notice to Employee by Company of such breach. It is expressly acknowledged and agreed that the decision as to whether “cause” exists for termination of the employment relationship by Company is delegated to the Independent Directors of the Board of Company for determination;
(b) For any other reason whatsoever, with or without cause, in the sole discretion of the Company’s Independent Directors of the Board;
(c) Upon Employee’s death; or
(d) To the extent allowed by law, upon Employee’s becoming disabled (as defined by Section 409A of the Code) by accident, sickness or other circumstance which renders him mentally or physically incapable of performing the duties and services required of Employee, as determined in good faith by Company and in accordance with Section 409A of the Code and any guidance issued thereunder. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute a “Termination for Cause” if made pursuant to Section 3.1(a); the effect of such termination is specified in Section 3.4. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.1(b); the effect of such termination is specified in Section 3.6(a). The effect of the employment relationship being terminated pursuant to Section 3.1(c) or (d) as a result of Employee’s death or disability is specified in Section 3.6(b).
3.2. Notwithstanding any other provisions of this Agreement except Section 8.5, Employee shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(a) the occurrence of an Involuntary Termination as defined in and in accordance with the provisions of Section 3.5; or
(b) For any other reason whatsoever, in the sole discretion of Employee. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.2(a); the effect of such termination is specified in Section 3.6(a), 3.6(c) or 3.6(d), as applicable. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 3.2(b); provided, however, that such termination of employment shall be required to constitute a “separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code; the effect of such termination is specified in Section 3.3.
3.3. Upon a “Voluntary Termination” of the employment relationship by Employee prior to expiration of the Term, all Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination. All future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of terminationtermination except as otherwise provided in this Section 3.3. Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), (i) the full amount of any bonus to which the Executive was or would have become entitled to pro rata salary and accrued benefits for any completed fiscal year prior to the fiscal year in which the Termination Date occurs, to the extent such bonus has not already been paid to the Executive, payable in accordance with the applicable terms of the bonus plan; (ii) the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the Termination Date, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through such date by 365 (366 in leap years). payable on the first regular payroll date of such termination andthe Company that occurs on or after 60 days following the Voluntary Termination Date or, if the payment of such termination amounts is required to be delayed pursuant to Section 8.10, such later date as is required pursuant to such Section; (iii) the reimbursement for reason all of retirement after age 65, Employee and his family shall be entitled to the continuation of Employee’s COBRA expenses regarding the provision of health insurance and dental insurance benefits for a period of 18 months following the his retirement dateVoluntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the retirement date occurred); provided, however, that while although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee or a family member becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under Medicareanother employer provided plan, the medical and other welfare benefits described herein will be secondary to those provided under Medicare such other plan during such applicable period of eligibility. ; (iv) a one time payment in the amount of $210,000 if Employee shall not fully complies with all obligations of Article VI, to be entitled to paid within 30 days after the completion of the non-competition period specified in Article VI; and (v) Employee may exercise any bonuses of his stock options that are outstanding and then vested, at any time on or incentive compensation not yet paid at before the date occurring 90 days following the Voluntary Termination Date (but in no event later than the date such options would otherwise expire), but any such options not exercised within that 90-day period (or their expiration date, if earlier) shall terminate and be canceled as of such terminationthat date, and he shall no longer have any rights with respect to those options.
3.4. If Employee’s employment hereunder shall be terminated by Company for Cause prior to expiration of the Term, all future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of termination. Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination, but and any bonus compensation that has been earned under the Bonus Plan, the payment of which has been deferred under the terms of the Bonus Plan, will be paid to the Executive in accordance with the terms of the Bonus Plan. Employee shall not be entitled to any other bonuses or incentive compensation not yet paid at the date of such termination.
3.5. As used in this Agreement, “Involuntary Termination” shall also mean termination of Employee’s employment with Company if such termination results from termination by Employee, in accordance with the requirements of this Section 3.5, in connection with or based upon any of the following conditions arising without the consent of Employee:
(a) A material reduction in the nature or scope of Employee’s duties and/or responsibilities as such duties and/or responsibilities are constituted as of the effective date of this Agreement or later agreed to by Employee and Company;
(b) A material reduction in Employee’s base pay (except as part of a general cutback for all employees or officers);
(c) A material change in the location for the primary performance of Employee’s services under this Agreement from the city in which Employee was serving at the time of notification to a city, which change must be to a location that is 50 or more miles away from the location at the time of such notification; or
(d) A material breach by Company of any material provision of this Agreement;
(e) The foregoing notwithstanding, any change in title or responsibilities that are part of normal succession planning or the retirement of Employee shall not constitute an Involuntary Termination under this Agreement. Employee shall provide notice of any such reduction, change or breach upon which Employee intends to rely as the basis for an Involuntary Termination within 45 days of the occurrence of such reduction, change or breach. The Company shall have 30 days following the receipt of such notice to remedy the condition constituting such reduction, change or breach and, if so remedied, any termination of Employee’s employment hereunder on the basis of the circumstances described in such notice shall be considered a Voluntary Termination pursuant to Section 3.2(b), with the effects described in Section 3.3. If the Company does not remedy the condition that has been the subject of a notice as described in this Section within 30 days of the Company’s receipt of such notice, Executive must terminate his employment within 90 days following the occurrence of such condition in order for such termination to be considered an Involuntary Termination for purposes of this Agreement.
3.6. Upon any Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term, Employee shall be entitled to receive pro rata base salary and benefits (including payment for accrued, but unused, vacation) through the date of termination. Depending upon the type of Involuntary Termination, Employee or his estate may be entitled to additional compensation and/or benefits, as described below.
(a) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a), Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days after the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the termination date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the Involuntary Termination Date, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through such date by 365 (366 in leap years), payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(a); (iii) the continuation of reimbursement for all COBRA expenses related to the provision of health insurance and dental insurance benefits for a period of one year 18 months following the Involuntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee; provided, however, that although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of one year following the Involuntary Termination Date; provided, however, that the cost of such benefits to Company shall not exceed the applicable dollar amount as in effect under Section 402(g)(1)(B) of the Code for the year in which the Involuntary Termination Date occurred; and (v) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan; (vi) a one time payment in the amount of $210,000 if Employee fully complies with all obligations of Article VI, to be paid within 30 days after the completion of the non-competition period specified in Article VI; and (vii) Employee may exercise any of his stock options that are outstanding and then vested, at any time on or before the date occurring 90 days the Involuntary Termination Date (but in no event later than the date such options would otherwise expire), but any such options not exercised within that 90-day period (or their expiration date, if earlier) shall terminate and be canceled as of that date, and he shall no longer have any rights with respect to those options.
(b) Upon a termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(c) or (d), Employee or his beneficiary shall be entitled entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) cash in the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the date of termination, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through the date of termination by 365 (366 in leap years), payable no later than 90 days following the date of termination or, if earlier, the date that is two and one-half months after the end of the calendar year in which the date of termination occurred; (ii) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan [plan; and (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the Involuntary Termination Datetermination date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee or eligible family member, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred); provided, however, that while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under 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.
(c) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a) within 24 months following a Change of Control, Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of 2.99 times one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days of the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the Involuntary Termination Date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) a lump sum cash amount equal to the product of 2.99 times the target bonus compensation at the greater of (A) the target bonus compensation in effect at the time notice of termination is given or (B) the target bonus compensation in effect immediately preceding the Change of Control Date, payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(c); (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the date of termination to Employee and Employee’s family in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date termination date occurred); provided, however, that although while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of 18 months following the Involuntacompen
Appears in 1 contract
TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH TERMINATION. 3.1. Notwithstanding any other provisions of this Agreement, Company shall have the right to terminate Employee’s 's employment under this Agreement at any time prior to the expiration of the Term for any of the following reasons:
(a) For “"cause” " upon the determination by the Company’s 's independent directors of the Board who are neither employees of nor Affiliated with Company or any subsidiary of Company apart from his or her capacity as a member of the Board and any Board committee and who otherwise have no interest in such determination (“"Independent Directors”") that “"cause” " exists for the termination of the employment relationship. As used in this Section 3.1(a), the term “"cause” " shall mean (i) Employee’s 's gross negligence or willful misconduct in the performance of the duties and services required of Employee pursuant to this Agreement; or (ii) Employee’s 's final conviction of a felony or of a misdemeanor involving moral turpitude; (iii) Employee’s 's involvement in a conflict of interest as referenced in Sections 1.3 and 1.4 with respect to which Company makes a good faith determination to terminate the employment of Employee; or (iv) Employee’s 's material breach of any material provision of this Agreement which remains uncorrected for 30 days following written notice to Employee by Company of such breach. It is expressly acknowledged and agreed that the decision as to whether “"cause” " exists for termination of the employment relationship by Company is delegated to the Independent Directors of the Board of Company for determination;
(b) For any other reason whatsoever, with or without cause, in the sole discretion of the Company’s Independent Directors of the Board;
(c) Upon Employee’s death; or
(d) To the extent allowed by law, upon Employee’s becoming disabled (as defined by Section 409A of the Code) by accident, sickness or other circumstance which renders him mentally or physically incapable of performing the duties and services required of Employee, as determined in good faith by Company and in accordance with Section 409A of the Code and any guidance issued thereunder. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute a “Termination for Cause” if made pursuant to Section 3.1(a); the effect of such termination is specified in Section 3.4. The termination of Employee’s employment by Company prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.1(b); the effect of such termination is specified in Section 3.6(a). The effect of the employment relationship being terminated pursuant to Section 3.1(c) or (d) as a result of Employee’s death or disability is specified in Section 3.6(b).
3.2. Notwithstanding any other provisions of this Agreement except Section 8.5, Employee shall have the right to terminate the employment relationship under this Agreement at any time prior to the expiration of the Term of employment for any of the following reasons:
(a) the occurrence of an Involuntary Termination as defined in and in accordance with the provisions of Section 3.5; or
(b) For any other reason whatsoever, in the sole discretion of Employee. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute an “Involuntary Termination” if made pursuant to Section 3.2(a); the effect of such termination is specified in Section 3.6(a), 3.6(c) or 3.6(d), as applicable. The termination of Employee’s employment by Employee prior to the expiration of the Term shall constitute a “Voluntary Termination” if made pursuant to Section 3.2(b); the effect of such termination is specified in Section 3.3.
3.3. Upon a “Voluntary Termination” of the employment relationship by Employee prior to expiration of the Term, all future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of termination. Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination and, if such termination is for reason of retirement after age 65, Employee and his family shall be entitled to the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the his retirement date, in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the retirement date occurred); provided, however, that while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee or a family member is eligible to receive medical or other welfare benefits under Medicare, the medical and other welfare benefits described herein will be secondary to those provided under Medicare during such applicable period of eligibility. Employee shall not be entitled to any bonuses or incentive compensation not yet paid at the date of such termination.
3.4. If Employee’s employment hereunder shall be terminated by Company for Cause prior to expiration of the Term, all future compensation to which Employee would have been entitled and all future benefits for which Employee would have been eligible shall cease and terminate as of the date of termination. Employee shall be entitled to pro rata salary and accrued benefits through the date of such termination, but Employee shall not be entitled to any bonuses or incentive compensation not yet paid at the date of such termination.
3.5. As used in this Agreement, “Involuntary Termination” shall also mean termination of Employee’s employment with Company if such termination results from termination by Employee, in accordance with the requirements of this Section 3.5, in connection with or based upon any of the following conditions arising without the consent of Employee:
(a) A material reduction in the nature or scope of Employee’s duties and/or responsibilities as such duties and/or responsibilities are constituted as of the effective date of this Agreement or later agreed to by Employee and Company;
(b) A material reduction in Employee’s base pay (except as part of a general cutback for all employees or officers);
(c) A material change in the location for the primary performance of Employee’s services under this Agreement from the city in which Employee was serving at the time of notification to a city, which change must be to a location that is 50 or more miles away from the location at the time of such notification; or
(d) A material breach by Company of any material provision of this Agreement. Employee shall provide notice of any such reduction, change or breach upon which Employee intends to rely as the basis for an Involuntary Termination within 45 days of the occurrence of such reduction, change or breach. The Company shall have 30 days following the receipt of such notice to remedy the condition constituting such reduction, change or breach and, if so remedied, any termination of Employee’s employment hereunder on the basis of the circumstances described in such notice shall be considered a Voluntary Termination pursuant to Section 3.2(b), with the effects described in Section 3.3. If the Company does not remedy the condition that has been the subject of a notice as described in this Section within 30 days of the Company’s receipt of such notice, Executive must terminate his employment within 90 days following the occurrence of such condition in order for such termination to be considered an Involuntary Termination for purposes of this Agreement.
3.6. Upon any Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term, Employee shall be entitled to receive pro rata base salary and benefits (including payment for accrued, but unused, vacation) through the date of termination. Depending upon the type of Involuntary Termination, Employee or his estate may be entitled to additional compensation and/or benefits, as described below.
(a) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a), Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days after the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the termination date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the Involuntary Termination Date, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through such date by 365 (366 in leap years), payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(a); (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of one year following the Involuntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee; provided, however, that although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of one year following the Involuntary Termination Date; provided, however, that the cost of such benefits to Company shall not exceed the applicable dollar amount as in effect under Section 402(g)(1)(B) of the Code for the year in which the Involuntary Termination Date occurred; and (v) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan.
(b) Upon a termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(c) or (d), Employee or his beneficiary shall be entitled to (i) cash in the amount of the target bonus compensation earned by Employee under any applicable bonus plan then in effect in accordance with its terms through the date of termination, based on Company performance through such date and prorated by multiplying such bonus compensation by the fraction obtained by dividing the number of days in the year through the date of termination by 365 (366 in leap years), payable no later than 90 days following the date of termination or, if earlier, the date that is two and one-half months after the end of the calendar year in which the date of termination occurred; (ii) any bonus compensation that has been earned under the bonus plan, the payment of which has been deferred under the terms of the bonus plan, will be paid to Employee in accordance with the terms of the bonus plan [and (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the Involuntary Termination Date, to Employee and Employee’s family, in accordance with the Equivalence Standard, at the election of Employee or eligible family member, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred); provided, however, that while Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under 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.
(c) Upon an Involuntary Termination of the employment relationship by either Company or Employee prior to expiration of the Term pursuant to Section 3.1(b) or 3.2(a) within 24 months following a Change of Control, Employee shall be entitled, after execution of a Waiver and Release Agreement in accordance with Section 8.6, in consideration of such agreement and Employee’s continuing obligations hereunder after such termination (including, without limitation, Employee’s non-competition obligations), to (i) the sum of 2.99 times one year’s annual base salary payable as follows: half of the base salary shall be paid within 30 days of the Involuntary Termination Date; the remaining half shall be paid at the earlier of (X) the end of the 6-month period following the Involuntary Termination Date or (Y) the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred; (ii) a lump sum cash amount equal to the product of 2.99 times the target bonus compensation at the greater of (A) the target bonus compensation in effect at the time notice of termination is given or (B) the target bonus compensation in effect immediately preceding the Change of Control Date, payable at the same time as the payments to be made pursuant to clause (i) of this Section 3.6(c); (iii) the continuation of the provision of health insurance and dental insurance benefits for a period of 18 months following the date of termination to Employee and Employee’s family in accordance with the Equivalence Standard, at the election of Employee, or, at the election of Company, the cash-equivalent thereof (with any cash equivalent to be paid no later than the date that is two and one-half months following the end of the calendar year in which the Involuntary Termination Date occurred); provided, however, that although Company shall provide such benefits at its expense, Employee shall be treated as having received compensation in the amount of the cost to Company (determined at Company’s then-prevailing COBRA rates) for such continuation coverage and shall be liable for all taxes associated with such compensation; provided further, however, that if the Employee becomes re-employed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein (including clause (iv) below) will be secondary to those provided under such other plan during such applicable period of eligibility; (iv) the continuation of the provision of life insurance benefits, in accordance with the Equivalence Standard, for a period of 18 months following the Involunta
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