Certain Benefits Upon Termination. (a) If (i) during the Term of this Agreement, the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) months after a Change of Control that occurs during the Term of this Agreement, the Company terminates the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) for any reason other than for Cause, or (iii) the Executive terminates his employment with the Company because of a Constructive Termination pursuant to Section 8(g) above (and provided that the Company has failed to cure the event or existence of the condition giving rise to a Constructive Termination within the thirty (30) day cure period provided under Section 8(g)), then the following shall apply: (I) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s Base Salary (1/2 the Executive’s Base Salary if termination is by reason of death); (II) the Company shall pay or provide to the Executive all other benefits, as specified in Section 10(b) below; (III) all installments of options to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest within thirty-six (36) months of the Date of Termination shall vest as of the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan or the Notice and Grant Agreement granting such options to Executive; and (IV) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the Code, the Company shall pay the Executive a performance achievement bonus award under the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan that is then in effect for Executive Officers) that is proportionately adjusted to take into account the period of actual service by the Executive during the Company’s fiscal year in which the Date of Termination occurs, if and when such bonus is paid to other Executive Officers of the Company. (b) If Section 10(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) month period after the Date of Termination (the “Continuation Period”), the Company shall, at its expense, continue on behalf of the Executive and the Executive’s dependents (and in the event of termination by reason of death, on behalf of Executive’s beneficiaries who were previously dependents), medical, dental, vision care, and hospitalization benefits (or such comparable alternative benefits determined by the Company, in its discretion) that (I) were provided to Executive at any time during the 90-day period prior to the Date of Termination, or (II) if termination is within eighteen (18) months of a Change of Control, were provided to Executive prior to such Change of Control (provided the level of such benefits shall in no event be lower than the Executive’s level of benefits on the Date of Termination). The Company’s obligation hereunder with respect to benefits under this Section 10(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b) so long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following a termination of employment, including without limitation, retiree medical and life insurance benefits, except as provided in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i). (c) In the event that the Executive’s employment is terminated for any reason (including without limit by the Company for Cause or by Executive’s voluntary resignation), the Company shall pay to the Executive: (i) all accrued but unpaid salary and amounts due to the Executive as of the Date of Termination, and (ii) all accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit, up to the Date of Termination. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination). (d) In the event that the Executive’s employment is terminated by reason of the Executive’s death or if the Executive is not a Specified Employee, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 10(a)(I) within thirty (30) days following the Executive’s Separation from Service, provided that the Company may delay payment in the case of the Executive’s death until the Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive’s jurisdiction of residence at the time of the Executive’s death. If the Executive, as of the date of Separation from Service, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section 10(a)(I), five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty (30) days of the date of Executive’s Separation from Service such amounts of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2), shall be paid five (5) days following the date that is six (6) months after the Employee’s Separation from Service. Notwithstanding the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing and payment of any performance achievement bonus to which the Executive is entitled pursuant to Section 10(a)(IV) shall be determined as set forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii). (e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid to the Executive’s estate or as the Executive’s executor shall direct. (f) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee, Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code), until the earlier of (i) the date which is five (5)business days following the six-month anniversary of Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A of the Code and, at the time of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee. (g) In the event the Executive is entitled hereunder to any payments or benefits set forth in this Section 10, then (i) the Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s damages including its obligation to make any payments or provide any benefits to Executive as required hereunder and (ii) the Company shall have no right to reduce or set-off against any amount or benefit payable by the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(b). The provisions for Severance Payment and other benefits contained in this Section 10 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity of the Company if, in connection with the same event or series of events, the Severance Payment and other benefits provided for in this Section 10 previously have been paid to Executive. (h) In the event that the Executive’s employment is terminated for any reason, the Company shall reimburse the Executive promptly for all business expenses incurred prior to the Date of Termination upon the presentation by the Executive of an itemized account of such expenditures, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policies. (i) The rights of the Executive under this Section 10 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement or employee benefit plan of the Company.
Appears in 1 contract
Certain Benefits Upon Termination. (a) If (iy) during the Term of this Agreement, the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) months after a Change of Control that occurs during the Term of this Agreement, with the Company terminates is terminated by the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) Company for any reason other than for Cause, the Executive’s death or Permanent Disability, or (iiiz) if the Executive terminates voluntarily resigns his employment with the Company because of a Constructive Termination pursuant to Section 8(g) above (and provided that the Company has failed to cure the event or existence of the condition giving rise due to a Constructive Termination within the thirty (30) day cure period provided under in accordance with Section 8(g)12(e), then then, in either case, the following shall apply: apply following the Termination Date and for the period of time that (Ias of the Termination Date) then remains in the Term of this Agreement (the “Continuation Period”):
(i) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times continue payment of the Executive’s Base then existing Salary (1/2 on the same schedule as corresponds to the regular Company payroll dates in effect on the Executive’s Base Salary if termination is by reason Date of deathTermination (with such payment to be treated as a separate payments for purposes of Section 409A of the Code); ;
(IIii) the Company shall pay or shall, at the Company’s expense, continue to provide the Executive with a car at the comparable level provided to the Executive all other benefits, as specified in Section 10(b) below; (III) all installments of options immediately prior to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest within thirty-six (36) months of the Date of Termination shall vest as of the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan or the Notice and Grant Agreement granting such options to Executive; and Termination;
(IViii) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the Code, the Company shall pay the Executive a performance achievement bonus award under the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan for executive officers that is then in effect for Executive Officersaddition to or in lieu of such plan) that is proportionately adjusted to take into account the period of actual service by of the Executive during the Company’s fiscal year in which the Date Executive’s employment is terminated, provided that the Compensation Committee certifies in writing that the performance incentive target for that fiscal year has been achieved and such payment is not inconsistent with Section 162(m) of Termination occurs, if the Code and when the Regulations thereunder and provided further that payment of such bonus is paid to other shall be made at the same time it would have been made had the Executive Officers of the Company.remained employed;
(biv) If Section 10(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) month period after the Date of Termination (the “Continuation Period”), the Company shall, at its expense, expense continue on behalf of the Executive and his dependents and beneficiaries, the Executive’s dependents (and in the event of termination by reason of deathlife insurance, on behalf of Executive’s beneficiaries who were previously dependents)disability, medical, dental, vision care, dental and hospitalization benefits provided (or such comparable alternative benefits determined by x) to the Company, in its discretion) that (I) were provided to Executive at any time during the 90-day period prior to the Date of Termination, Termination or (IIy) if termination is within eighteen to other similarly situated Executives who continue in the employ of the Company during the Continuation Period;
(18v) months all installments of a Change of Control, were provided to Executive prior to such Change of Control (provided the level of such benefits shall in no event be lower than the Executive’s level Awards that are held by the Executive and scheduled to vest, or to become exercisable, or to be subject to lapse of restrictions, at any time within twenty-four (24) months after the Termination Date shall become exercisable, and vest, and any restriction shall lapse, as of the Termination Date, subject in each case to expiration or termination as set forth in the applicable Award plan or agreement; provided, however, that any vesting, exercisability or lapse of restriction on any Award which is contingent upon satisfaction of a Company performance-based condition or performance goal under the Award shall continue to be subject to such performance-based condition or performance goal and will only be deemed satisfied and vested if and when (if ever) such Company performance-based condition or performance goal is actually achieved pursuant to the Award’s terms; and
(vi) all other benefits on shall vest (unless a plan specifically provides vesting standards in which event the Date plan’s terms and conditions shall govern vesting). The coverage and benefits (including deductibles and costs) provided in this Section 14(a) during the Continuation Period shall be no less favorable to the Executive and his dependents and beneficiaries than the most favorable of Termination)such coverages and benefits during any of the periods referred to in clauses (x) and (y) of subsection (iv) above. The Company’s obligation obligations hereunder with respect to the foregoing benefits under this Section 10(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s a subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b) hereunder so long as the aggregate coverages and benefits of the combined benefit plans are is no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b14(a) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s his dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following the Termination Date. During the period of the Continuation Period in which the Executive and his dependents and beneficiaries are eligible to receive continued benefits under the Company’s group plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay the portion of the Executive’s premium payments necessary to satisfy the requirements of this Section 14(a) with respect to medical, dental and hospitalization benefits. Notwithstanding the foregoing, if the Company determines that the payment of foregoing additional benefits would result in a termination violation of employmentthe nondiscrimination rules of Code Section 105(h)(2) or any statute or regulation of similar effect (including, including without limitationbut not limited to, retiree medical the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing such Company-paid benefits, the Company, in its sole discretion, may elect to instead pay the Executive on the first day of each month of the Continuation Period, a fully taxable cash payment equal to both the Executive’s and the Company’s portions of the benefits premiums for that month, subject to applicable tax withholdings, for the remainder of the Continuation Period. With respect to any period during the Continuation Period in which the Executive or his dependents and beneficiaries cease to be eligible for COBRA coverage, and with respect to life insurance benefits, except as provided and disability benefits for the remainder of the Continuation Period for which the Company cannot make direct premium payments for such benefits in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant accordance with the requirements of Regulation Code Section 1.409A-3(i).
409A or otherwise, the Executive (cor his dependents and beneficiaries, as applicable) In shall each month pay to the event that Company, insofar as permitted by such benefit plans, on an after-tax basis, an amount equal to the Executive’s employment is terminated for any reason (including without limit by full premium cost of medical, dental, hospitalization, life insurance and disability benefits coverage. Within 30 days of each such payment, subject to the Company for Cause or by Executive’s voluntary resignation)409A Reimbursement Conditions, the Company shall pay to the Executive (or his dependents and beneficiaries, as applicable) in cash (less required withholding) an amount equal to full premium cost of medical, dental, hospitalization, life insurance and disability benefits coverage.
(b) Upon any termination of the Executive: (i) ’s employment, then in addition to the payments that may be provided in Section 14(a), as soon as practicable on or after the Termination Date, the Company shall pay the Executive all accrued but unpaid salary Salary, and bonus and amounts due to under the Executive as Company’s Incentive Plan or any other bonus or incentive plan then in effect in accordance with the terms and conditions of the Date of Terminationsuch plans, and (ii) all accrued but unpaid or unused vacation, sick pay or and expense reimbursement benefit, up to the Date of Termination. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination).
(d) In the event that the Executive’s employment is terminated by reason of the Executive’s death or if the Executive is not a Specified Employee, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 10(a)(I) within thirty (30) days following the Executive’s Separation from Service, provided that the Company may delay payment in the case of the Executive’s death until the Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive’s jurisdiction of residence at the time of the Executive’s death. If the Executive, as of the date of Separation from Service, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section 10(a)(I), five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty (30) days of the date of Executive’s Separation from Service such amounts of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2), shall be paid five (5) days following the date that is six (6) months after the Employee’s Separation from Service. Notwithstanding the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing and payment of any performance achievement bonus to which the Executive is entitled pursuant to Section 10(a)(IV) shall be determined as set forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).
(e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid to the Executive’s estate or as the Executive’s executor shall direct.
(f) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee, Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code), until the earlier of (i) the date which is five (5)business days following the six-month anniversary of Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A of the Code and, at the time of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee.
(gc) In the event the Executive is entitled hereunder to any payments or benefits set forth in this Section 1014(a), then (i) the Executive shall have no obligation to notify Company of employment subsequent to the Executive’s termination or duty to seek other or alternate employment or otherwise mitigate offset (except to the extent required by Section 14(a)) the Company’s damages including its obligation by payments due to make any payments such employment and shall have no duty to mitigate.
(d) Except in the case of a termination for Cause, with respect to the Executive’s vested Awards which either were vested prior to the Termination Date, or provide any benefits for which vesting is accelerated pursuant to Section 14(a), the Executive as required hereunder and (or the Executive’s estate, if the Executive has died) shall have the right to exercise such vested Awards for a period of 36 months from the later of (i) the date of Separation from Service or (ii) if vesting of such Award is Company performance-based, the date of vesting or lapse of restriction on such Award due to Company shall have no right achievement of such performance (subject in all cases to reduce the earlier expiration or set-off against any amount or benefit payable by termination of the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(bapplicable Award). The provisions for Severance Payment and other benefits contained in this Section 10 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity of the Company if, in connection with the same event or series of events, the Severance Payment and other benefits provided for in this Section 10 previously have been paid to Executive.
(h) In the event that the Executive’s employment is terminated for any reason, the Company shall reimburse the Executive promptly for all business expenses incurred prior to the Date of Termination upon the presentation by the Executive of an itemized account of such expenditures, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policies.
(i) The rights of the Executive under this Section 10 14 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement retirement, Award, or employee benefit plan of the Company.
Appears in 1 contract
Certain Benefits Upon Termination. If the Executive's employment by the Company shall be terminated (a) If (i) during the Term of this Agreement, by the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) months after a Change of Control that occurs during the Term of this Agreement, the Company terminates the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) for any reason other than for Cause, Retirement or Disability, or (iiib) by the Executive terminates his employment with the Company because of a Constructive Termination pursuant to Section 8(g) above for Good Reason (and provided that the Company has failed to cure the event other than for Retirement or existence of the condition giving rise to a Constructive Termination within the thirty (30) day cure period provided under Section 8(g)by death), then the following Executive shall apply: (I) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s Base Salary (1/2 the Executive’s Base Salary if termination is by reason of death); (II) the Company shall pay or provide be entitled to the Executive all other benefitsbenefits provided under paragraphs (i), as specified in Section 10(b(ii) below; (III) all installments of options to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest within thirty-six (36) months of the Date of Termination shall vest as of the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan or the Notice and Grant Agreement granting such options to Executive; and (IViii) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the Code, the Company shall pay the Executive a performance achievement bonus award under the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan that is then in effect for Executive Officers) that is proportionately adjusted to take into account the period of actual service by the Executive during the Company’s fiscal year in which the Date of Termination occurs, if and when such bonus is paid to other Executive Officers of the Company.immediately below:
(b) If Section 10(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) month period after the Date of Termination (the “Continuation Period”), the Company shall, at its expense, continue on behalf of the Executive and the Executive’s dependents (and in the event of termination by reason of death, on behalf of Executive’s beneficiaries who were previously dependents), medical, dental, vision care, and hospitalization benefits (or such comparable alternative benefits determined by the Company, in its discretion) that (I) were provided to Executive at any time during the 90-day period prior to the Date of Termination, or (II) if termination is within eighteen (18) months of a Change of Control, were provided to Executive prior to such Change of Control (provided the level of such benefits shall in no event be lower than the Executive’s level of benefits on the Date of Termination). The Company’s obligation hereunder with respect to benefits under this Section 10(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b) so long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following a termination of employment, including without limitation, retiree medical and life insurance benefits, except as provided in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i).
(c) In the event that the Executive’s employment is terminated for any reason (including without limit by the Company for Cause or by Executive’s voluntary resignation), the Company shall pay to the Executive: (i) all accrued but unpaid salary and amounts due to the Executive as of the Date of Termination, and (ii) all accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit, up to the Date of Termination. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination).
(d) In the event that the Executive’s employment is terminated by reason of the Executive’s death or if the Executive is not a Specified Employee, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 10(a)(I) within thirty (30) days following the Executive’s Separation from Service, provided that the Company may delay payment in the case of the Executive’s death until the Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive’s jurisdiction of residence at the time of the Executive’s death. If the Executive, as of the date of Separation from Service, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section 10(a)(I), five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty his full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year which has not yet been awarded or paid to him under any bonus plan;
(30ii) the Company shall pay as supplemental deferred compensation to the Executive, no later than the fifth day following the Date of Termination (or in the event of the Executive's death following his entitlement to benefits hereunder and prior to payment thereof, as soon as reasonably practicable, but in no event more than sixty (60) days following his death), a lump sum cash amount equal to the product of the date of Executive’s Separation from Service such amounts 's average annual compensation payable to him by the Company in his capacity as President and Chairman of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2), shall be paid Board and includible in his gross income for Federal income tax purposes during his most recent five (5) days following taxable years ending before the date that is six Date of Termination (6) months after or during such shorter number of his most recent taxable years as he has served as President and Chairman of the Employee’s Separation from Service. Notwithstanding Board, with any partial year being annualized for the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2purpose of this computation), multiplied by three (3) and less $1.00; and
(iii) the Company at its sole expense shall pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing maintain in full force and payment effect for the benefit of any performance achievement bonus to which the Executive is entitled pursuant to Section 10(a)(IV) shall be determined as set forth in and his eligible dependents the Company’s Annual Performance Incentive Plan health- and-accident plan coverage provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).
(e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid immediately prior to the Executive’s estate or as the Executive’s executor shall direct.
(f) Notwithstanding any provision Notice of this Agreement to the contrary, if Executive is a Specified Employee, Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code)Termination, until the earlier of (iA) the date which is five expiration of twenty-four (5)business days 24) months following the six-month anniversary Date of Executive’s Separation from Service for any reason other than death Termination or (iiB) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A eligibility of the Code Executive and his dependents for coverage under the health-and, at the time -accident plan of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee.
(g) In the event successor employer of the Executive is entitled hereunder to any payments or benefits set forth in this Section 10, then (i) the Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s damages including its obligation to make any payments or provide any providing comparable benefits to Executive as required hereunder and (ii) the Company shall have no right to reduce or set-off against any amount or benefit payable by the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(b). The provisions for Severance Payment and other benefits contained in this Section 10 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity that of the Company ifprovided, in connection with the same event or series of eventshowever, the Severance Payment and other benefits provided for in this Section 10 previously have been paid to Executive.
(h) In the event that the Executive’s employment if such continued coverage is terminated barred for any reason, the Company shall reimburse provide comparable coverage during such period; provided further, however, if at the time continued coverage hereunder is to terminate, the Executive promptly presents verifiable evidence to the Company of his uninsurability thereafter under a health-and-accident plan providing comparable benefits, the Company shall make such coverage available to the Executive at the Executive's sole expense, as determined on a reasonable actuarial basis. In no event shall the Executive be required to mitigate the amount of any payment provided for all business expenses incurred prior to in this Section 3 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 3 be reduced by any compensation earned by the Executive as the result of employment by another employer after the Date of Termination upon the presentation by the Executive of an itemized account of such expendituresTermination, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policiesor otherwise.
(i) The rights of the Executive under this Section 10 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement or employee benefit plan of the Company.
Appears in 1 contract
Certain Benefits Upon Termination. (a) If (iSubject to Section 6(b) during hereof, if the Term of this Agreement, Executive's employment is terminated by the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) months after a Change of Control that occurs during the Term of this Agreement, the Company terminates the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) for any reason other than for Cause, Disability or (iii) the Executive terminates his employment with the Company because of a Constructive Termination pursuant to Section 8(g) above (and provided that the Company has failed to cure the event or existence of the condition giving rise to a Constructive Termination within the thirty (30) day cure period provided under Section 8(g))death, then the following Executive shall apply: be entitled to the benefits provided below:
(Ii) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s his full Base Salary (1/2 the Executive’s Base Salary if termination is by reason of death); (II) the Company shall pay or provide to the Executive all other benefits, as specified in Section 10(b) below; (III) all installments of options to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest within thirty-six (36) months of through the Date of Termination shall vest as at the rate in effect at the time the Notice of Termination is given plus credit for any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year which has not yet been awarded or paid to the Executive, and the amount of the bonus for the current fiscal year determined on a pro rata basis;
(ii) in lieu of any further salary, bonuses or benefits payments to the Executive for periods subsequent to the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan or the Notice and Grant Agreement granting such options to Executive; and (IV) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the CodeTermination, the Company shall pay as severance to the Executive a performance achievement bonus award under on the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan that is then in effect for Executive Officers) that is proportionately adjusted to take into account the period of actual service by the Executive during the Company’s fiscal year in which 30th day following the Date of Termination occurs, if and when such bonus is a lump sum amount equal to the total amount of the Base Salary that would have been paid to other the Executive Officers of had he not been terminated during the Company.
(b) If Section 10(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) month period after commencing on the Date of Termination and ending on June , 2000; and
(the “Continuation Period”), iii) the Company shallshall maintain in full force and effect, at its expense, continue on behalf of the Executive and for the Executive’s dependents 's continued benefit until the earlier of (A) June , 2000 or (B) the Executive's commencement of full time employment with a new employer, his automobile allowance and in the event of termination by reason of death, on behalf of Executive’s beneficiaries who were previously dependents)all life insurance, medical, dental, vision carehealth and accident, and hospitalization benefits (disability plans, programs or such comparable alternative benefits determined by arrangements in which the Company, in its discretion) that (I) were provided Executive was entitled to Executive at any time during the 90-day period participate immediately prior to the Date of Termination, or (II) if termination provided that the Executive's continued participation is within eighteen (18) months of a Change of Control, were provided to Executive prior to such Change of Control (provided possible under the level general terms and provisions of such benefits shall in no event be lower than the Executive’s level of benefits on the Date of Termination)plans and programs. The Company’s obligation hereunder with respect to benefits under this Section 10(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b) so long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following a termination of employment, including without limitation, retiree medical and life insurance benefits, except as provided in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i).
(c) In the event that the Executive’s 's participation in any such plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive was entitled to receive under such plans and programs.
(b) If the Executive's employment is terminated for any reason Disability under Section 2(a), then the Executive shall be entitled to the benefits provided below:
(including without limit by i) the Company shall pay the Executive his full Base Salary through the Date of Termination at the rate in effect at the time the Notice of Termination is given plus credit for Cause any vacation earned but not taken and the amount, if any, of any bonus for a past fiscal year which has not yet been awarded or by Executive’s voluntary resignation)paid to the Executive and the amount of the bonus for the current fiscal year determined on a pro rata basis;
(ii) in lieu of any further salary, bonuses or benefits payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay to the Executive: (i) all accrued but unpaid salary and amounts due as severance pay to the Executive as on the 30th day following the Date of Termination a lump sum amount equal to the Base Salary that would have been paid to the Executive had he not been terminated during the period commencing on the Date of Termination and ending on the earlier of four months after the Date of Termination or June , 2000; and
(iii) the Company shall maintain in full force and effect for the Executive's continued benefit, until the earlier of four months after the Date of Termination and June , 2000, his automobile allowance and all life insurance, medical, health and accident, and disability plans, programs or arrangements in which the Executive was entitled to participate immediately prior to the Date of Termination, provided that the Executive's continued participation is possible under the general terms and (ii) all accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit, up to the Date provision of Terminationsuch plans and programs. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination).
(d) In the event that the Executive’s employment 's participation in any such plan or program is terminated by reason of the Executive’s death or if the Executive is not a Specified Employeebarred, the Company shall make all cash payments arrange to provide the Executive with benefits substantially similar to those which the Executive is was entitled pursuant to Section 10(a)(Ireceive under such plans and programs.
(c) within thirty (30) days following If the Executive’s Separation from Service's employment is terminated for Cause, provided that the Company may delay payment in the case Disability under Section 2(I)(a), death or voluntary termination or resignation of employment by the Executive’s death until , the Executive’s executor or personal representative has been appointed and qualified pursuant to Executive shall be paid his full Base Salary through the laws Date of Termination at the rate in effect in the Executive’s jurisdiction of residence at the time the Notice of Termination is given plus credit for any vacation earned but not taken and the Executive’s death. If the Executiveamount, as of the date of Separation from Serviceif any, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section 10(a)(I), five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty (30) days of the date of Executive’s Separation from Service such amounts of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2), shall be paid five (5) days following the date that is six (6) months after the Employee’s Separation from Service. Notwithstanding the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing and payment of any performance achievement bonus to for a past fiscal year which the Executive is entitled pursuant to Section 10(a)(IV) shall be determined as set forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts has not yet been awarded or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).
(e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid to the Executive’s estate or as the Executive’s executor shall direct.
(fd) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee, The Executive shall not be entitled required to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code), until the earlier of (i) the date which is five (5)business days following the six-month anniversary of Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A of the Code and, at the time of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee.
(g) In the event the Executive is entitled hereunder to any payments or benefits set forth in this Section 10, then (i) the Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s damages including its obligation to make any payments or provide any benefits to Executive as required hereunder and (ii) the Company shall have no right to reduce or set-off against any amount or benefit payable by the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(b). The provisions for Severance Payment and other benefits contained in this Section 10 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity of the Company if, in connection with the same event or series of events, the Severance Payment and other benefits payment provided for in this Section 10 previously have been paid to Executive.
(h) In 3 by seeking other employment or otherwise nor shall the event that the Executive’s employment is terminated amount of any payment provided for in this Section 3 be reduced by any reason, the Company shall reimburse compensation earned by the Executive promptly for all business expenses incurred prior to as the result of employment by another employer after the Date of Termination upon the presentation by the Executive of an itemized account of such expendituresTermination, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policiesor otherwise.
(i) The rights of the Executive under this Section 10 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement or employee benefit plan of the Company.
Appears in 1 contract
Samples: Severance Agreement (Substance Abuse Technologies Inc)
Certain Benefits Upon Termination. (a) If (i) during the Term of this Agreement, the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) 18 months after a Change of Control that occurs during the Term of this Agreement, the Company terminates the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) for any reason other than for Cause, or (iii) the Executive terminates his employment with this Agreement at any time within sixty (60) days of the Company because occurrence of a Constructive Termination pursuant to Section 8(g) above (and provided that the Company has failed to cure the event or existence of the condition giving rise to a Constructive Termination within the thirty (30) day cure period provided under Section 8(g))Termination, then the following shall apply: (I) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s Base Salary (1/2 one-half (1/2) the Executive’s Base Salary if termination is by reason of death); (II) the Company shall pay or provide to the Executive all other benefits, as specified in Section 10(bsubsection 11(b) below; (III) all installments of options to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest become exercisable within thirtytwenty-six four (3624) months of the Date of Termination shall become exercisable and vest as of the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan applicable stock option plan or the Notice and Grant Agreement granting such options to Executiveagreement; and (IV) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the Code, the Company shall pay the Executive a performance achievement bonus award under the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan that is then in effect for Executive Officers) that is proportionately adjusted to take into account the period of actual service by the Executive during the Company’s fiscal year in which the Date of Termination occursExecutive’s employment is terminated, if provided that the Compensation Committee certifies in writing that the performance incentive target for that fiscal year has been achieved and when such bonus payment is paid to other Executive Officers not inconsistent with Section 162(m) of the CompanyCode and the regulations thereunder.
(b) If Section 10(asubsection 11(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) an 12 month period after the Date of Termination (the “Continuation Period”), the Company shall, shall at its expense, expense continue on behalf of the Executive and the Executive’s dependents (and in the event of termination by reason of death, on behalf of Executive’s beneficiaries who were previously dependents)beneficiaries, medical, dental, vision care, dental and hospitalization benefits (or such comparable alternative benefits determined by the Company, in its discretion) that (I) were provided to Executive at any time during the 90-day period prior to the Date of Termination, or (II) if termination is within eighteen (18) 18 months of a Change of Control, were provided to Executive prior to such Change of Control (provided the level of such benefits shall in no event be lower than the Executive’s level of benefits on the Date of Termination). The Company’s obligation hereunder with respect to benefits under this Section 10(b11(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b11(b) so long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b11(b) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following a termination of employment, including without limitation, retiree medical and life insurance benefits, except as provided in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i).
(c) In the event that the Executive’s employment is terminated for any reason (including without limit by the Company for Cause or by Executive’s voluntary resignation)reason, the Company shall pay to the Executive: (i) all accrued but unpaid salary and amounts due to the Executive as of the Date of Termination, and (ii) all accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit, up to the Date of Termination. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination).
(d) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 11 shall be paid to the Executive’s estate or as the Executive’s executor shall direct.
(e) In the event that the Executive’s employment is terminated other than by reason of death or because the Executive has become “disabled” as defined in Section 409A(a)(2)(C) of the Code, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 11(a)(I) within five (5) days following the date that is six (6) months after the Date of Termination of the Executive’s employment. In the event that the Executive’s employment is terminated by reason of the Executive’s death or if because the Executive is not a Specified Employeehas become disabled as defined in Section 409A(a)(2)(C) of the Code, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 10(a)(I11(a)(I) within thirty (30) days following the Executive’s Separation from ServiceDate of Termination, provided that the Company may delay defer payment in the case of the Executive’s death until the Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive’s jurisdiction of residence at the time of the Executive’s death. If the Executive, as of the date of Separation from Service, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section 10(a)(I), five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty (30) days of the date of Executive’s Separation from Service such amounts of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(2), shall be paid five (5) days following the date that is six (6) months after the Employee’s Separation from Service. Notwithstanding the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall may pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing and of the payment of any performance achievement bonus to which the Executive is entitled pursuant to Section 10(a)(IV11(a)(IV) shall be determined as set forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).
(e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid to the Executive’s estate or as the Executive’s executor shall directPlan.
(f) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee, Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code), until the earlier of (i) the date which is five (5)business days following the six-month anniversary of Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A of the Code and, at the time of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee.
(g) In the event the Executive is entitled hereunder to any payments or benefits set forth in this Section 1011, then (i) the Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s damages including its obligation to make any payments or provide any benefits to Executive as required hereunder and mitigate.
(iig) the Company shall have no right to reduce or set-off against any amount or benefit payable by the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(b). The provisions for Severance Payment and other benefits contained in this Section 10 11 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 11 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity of the Company if, in connection with the same event or series of events, the Severance Payment and other benefits provided for in this Section 10 11 previously have been paid.
(i) In the event that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code), to the Executive or for his or her benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his or her employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (a “Payment” or “Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties, other than interest and penalties imposed by reason of the Executive’s failure to file timely a tax return or pay taxes shown due on his return, imposed with respect to such taxes and the Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(ii) An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm selected by the Company and reasonably acceptable to the Executive which is designated as one of the four largest accounting firms in the United States (the “Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and the Executive within five days of the Termination Date if applicable, or such other time as requested by the Company or by the Executive (provided the Executive reasonably believes that any of the Payments may be subject to the Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to a Payment or Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten days of the delivery of the Determination to the Executive, the Executive shall have the rights to dispute the Determination (the “Dispute”). The Gross-Up Payment, if any, as determined pursuant to this Section 14(h) shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination. The existence of the Dispute shall not in any way affect the Executive’s right to receive the Gross-Up Payment in accordance with the Determination. Upon the final resolution of a Dispute, the Company shall promptly pay to the Executive any additional amount required by such resolution. If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Executive.
(hi) In the event that the Executive’s employment is terminated for any reason, the Company shall reimburse the Executive promptly for all business expenses incurred prior to the Date of Termination upon the presentation by the Executive of an itemized account of such expenditures, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policies.
(ij) The rights of the Executive under this Section 10 11 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement or employee benefit plan of the Company.
Appears in 1 contract
Samples: Employment Agreement (Cheesecake Factory Incorporated)
Certain Benefits Upon Termination. (a) If (i) during the Term of this Agreement, the Company terminates the Executive’s employment for any reason other than for Cause (including by reason of death or Permanent Disability) or (ii) within eighteen (18) 18 months after a Change of Control that occurs during the Term of this Agreement, the Company terminates the Executive’s employment (whether or not the Term of this Agreement has ended without renewal) for any reason other than for Cause, or (iii) the Executive terminates his employment with this Agreement at any time within sixty (60) days of the Company because occurrence of a Constructive Termination pursuant to Section 8(g) above (and provided that the Company has failed to cure the event or existence of the condition giving rise to a Constructive Termination within the thirty (30) day cure period provided under Section 8(g))Termination, then the following shall apply: (I) the Company shall pay the Executive a “Severance Payment” in cash equal to one (1) times the Executive’s Base Salary (1/2 the Executive’s Base Salary if termination is by reason of death); (II) the Company shall pay or provide to the Executive all other benefits, as specified in Section 10(b) below; (III) all installments of options to purchase shares of the Company’s Common Stock under the 2001 Stock Plan that are held by Executive and scheduled to vest become exercisable within thirty-six (36) months of the Date of Termination shall become exercisable and vest as of the Date of Termination subject to expiration or termination as set forth in the 2001 Stock Plan applicable stock option plan or the Notice and Grant Agreement granting such options to Executiveagreement; and (IV) provided that the Compensation Committee certifies in writing that the performance incentive target(s) for the fiscal year in which the Date of Termination occurs has been achieved, and all conditions to Executive Officers’ receipt of bonus awards under such plan (other than the condition of continuing employment) have been satisfied, including any conditions related to limitations of payment under such plan due to non-deductibility to the Company under Section 162(m) of the Code, the Company shall pay the Executive a performance achievement bonus award under the Company’s Annual Performance Incentive Plan (or any restated or new bonus award plan that is then in effect for Executive Officers) that is proportionately adjusted to take into account the period of actual service by the Executive during the Company’s fiscal year in which the Date of Termination occursExecutive’s employment is terminated, if provided that the Compensation Committee certifies in writing that the performance incentive target for that fiscal year has been achieved and when such bonus payment is paid to other Executive Officers not inconsistent with Section 162(m) of the CompanyCode and the regulations thereunder.
(b) If Section 10(a) above applies, then the Company shall provide the following additional benefits to Executive: (i) for a twelve (12) 12 month period after the Date of Termination (the “Continuation Period”), the Company shall, at its expense, continue on behalf of the Executive and the Executive’s dependents (and in the event of termination by reason of death, on behalf of Executive’s beneficiaries who were previously dependents)beneficiaries, medical, dental, vision care, and hospitalization benefits (or such comparable alternative benefits determined by the Company, in its discretion) that (I) were provided to Executive at any time during the 90-day period prior to the Date of Termination, or (II) if termination is within eighteen (18) 18 months of a Change of Control, were provided to Executive prior to such Change of Control (provided the level of such benefits shall in no event be lower than the Executive’s level of benefits on the Date of Termination). The Company’s obligation hereunder with respect to benefits under this Section 10(b) shall be limited to the extent that the Executive obtains any such benefits pursuant to the Executive’s subsequent employer’s benefit plans, if any, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive under this Section 10(b) so long as the aggregate coverages and benefits of the combined benefit plans are no less favorable to the Executive than the coverages and benefits required to be provided hereunder. This Section 10(b) shall not be interpreted so as to limit any benefits to which the Executive, the Executive’s dependents or beneficiaries may be entitled under any of the Company’s other employee benefit plans, programs or practices following a termination of employment, including without limitation, retiree medical and life insurance benefits, except as provided in this Section. Retiree medical and life insurance benefits shall be limited by and be designed to either (A) be exempt from Section 409A by reason of qualification under Regulation Section 1.409A-1(a)(9)(v)(B) and/or (D) (which shall be aggregated with all other benefits which would qualify thereunder) or (B) be compliant with the requirements of Regulation Section 1.409A-3(i).
(c) In the event that the Executive’s employment is terminated for any reason (including without limit by the Company for Cause or by Executive’s voluntary resignation)reason, the Company shall pay to the Executive: (i) all accrued but unpaid salary and amounts due to the Executive as of the Date of Termination, and (ii) all accrued but unpaid or unused vacation, sick pay or expense reimbursement benefit, up to the Date of Termination. No other payments or benefits shall be due to Executive upon a termination for Cause or by Executive’s voluntary resignation (other than any resignation occurring by reason of a Constructive Termination).
(d) In the event that the Executive’s employment is terminated by reason of the Executive’s death or if the Executive is not a Specified Employee, the Company shall make all cash payments to which the Executive is entitled pursuant to Section 10(a)(I) within thirty (30) days following the Executive’s Separation from Service, provided that the Company may delay payment in the case of the Executive’s death until the Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive’s jurisdiction of residence at the time of the Executive’s death. If the Executive, as of the date of Separation from Service, is a Specified Employee under Section 409A, then the Company shall, unless as otherwise provided in this paragraph, pay to the Executive all amounts due and owing under section Section 10(a)(I), ) on that date which is five (5) business days following the date that is six (6) months after the date of Executive’s Separation from Service, provided that the Executive’s employment is not terminated for Cause. If the Executive is a Specified Employee and it is determined that Section 10(a)(I) provides payment only in the event of Involuntary Separation or Voluntary Separation with Good Reason, then the Company shall pay to the Executive within thirty (30) days of the date of Executive’s Separation from Service such amounts of the separation pay not to exceed the maximum limit permitted under Regulation Section 1.409-1(b)(9)(iii)A(21(b)(9)(iii)(2). Any amounts which remain unpaid after paying all amounts permitted by the dollar limitation under Regulation Section 1.409-1(b)(9)(iii)A(21(b)(9)(iii)(2), shall be paid five (5) business days following the date that is six (6) months after the Employee’s Separation from Service. Notwithstanding the foregoing, but subject to permitted payments under Regulation Section 1.409-1(b)(9)(iii)A(2), the Company shall pay such cash payments over a one year period, on a bi-weekly basis commencing when such payments shall first become payable. The timing and payment of any performance achievement bonus to which the Executive is entitled pursuant to Section 10(a)(IV) shall be determined as set forth in the Company’s Annual Performance Incentive Plan provided further, that in all event such payment shall be made no later than March 1 of the calendar year following the calendar year in which such Separation from Service occurs. In each case, any amounts or benefits paid or provided to Executive under this Section 10 shall be treated as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii).
(e) In the event that the Executive’s employment terminates by reason of the Executive’s death, the applicable Severance Payment and other benefits provided in this Section 10 shall be paid to the Executive’s estate or as the Executive’s executor shall direct.
(f) Notwithstanding any provision of this Agreement to the contrary, if Executive is a Specified Employee, Executive shall not be entitled to any payments or benefits the right to which provides for a “deferral of compensation” within the meaning of Section 409A, taking into account all applicable exemptions or exceptions, and whose payment or provision is triggered by Executive’s termination of employment with the Company (whether such payments or benefits are provided to Executive under this Agreement or under any other plan, program or arrangement of the Company), including as a result of Executive’s Permanent Disability (other than Executive being “disabled” within the meaning of Section 409A(a)(2)(c) of the Code), until the earlier of (i) the date which is five (5)business days following the six-month anniversary of Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death, and such payments or benefits that, if not for the six-month delay described herein, would be due and payable prior to such date shall be made or provided to Executive on such date. The Company shall make the determination as to whether Executive is a Specified Employee in good faith in accordance with its general procedures adopted in accordance with Section 409A of the Code and, at the time of Executive’s Separation from Service, will notify Executive whether or not he is a Specified Employee.
(g) In the event the Executive is entitled hereunder to any payments or benefits set forth in this Section 10, then (i) the Executive shall have no obligation or duty to seek other or alternate employment or otherwise mitigate the Company’s damages including its obligation to make any payments or provide any benefits to Executive as required hereunder and (ii) the Company shall have no right to reduce or set-off against any amount or benefit payable by the Company to Executive hereunder including for or by reason of Executive’s receipt or generation of earnings from any alternate or subsequent employment or other arrangement or undertaking except as provided under Section 10(b). The provisions for Severance Payment and other benefits contained in this Section 10 may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated because of a Permanent Disability, and should there be a Change of Control and Constructive Termination thereafter, then the Executive would be entitled to be paid under this Section 10 only once. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any wholly owned subsidiary or other affiliated entity of the Company if, in connection with the same event or series of events, the Severance Payment and other benefits provided for in this Section 10 previously have been paid to Executive.
(h) In the event that the Executive’s employment is terminated for any reason, the Company shall reimburse the Executive promptly for all business expenses incurred prior to the Date of Termination upon the presentation by the Executive of an itemized account of such expenditures, setting forth the date, the purposes for which incurred and the amounts thereof, together with such receipts showing payments in conformity with the Company’s established policies.
(i) The rights of the Executive under this Section 10 shall not be exclusive of any other rights to which the Executive may be entitled under any bonus, retirement or employee benefit plan of the Company.
Appears in 1 contract
