Common use of Change in Control Severance Benefits Clause in Contracts

Change in Control Severance Benefits. If Executive is entitled to receive Change in Control Severance Benefits pursuant to Section 2(a), the Change in Control Severance Benefits provided to Executive pursuant to the terms of this Agreement will consist of the following: (i) A single lump sum cash payment in an amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the greater of (a) Executive’s annualized base salary as of the date of Executive’s Separation from Service or (b) Executive’s annualized base salary in effect immediately prior to any material diminution in Executive’s base salary following the execution of this Agreement. (ii) A single lump sum cash payment in an amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the average payment to which Executive was entitled pursuant to the UniSource Energy Corporation Performance Enhancement Plan or any successor plan (the “Incentive Compensation Plan”) for the three calendar years immediately preceding the calendar year in which Executive’s Separation from Service occurs. If, during each of the three calendar years prior to the year in which Executive’s Separation from Service occurs, Executive was not eligible to (a) participate in the Incentive Compensation Plan or (b) receive a payment pursuant to the Incentive Compensation Plan based on Executive’s pay grade level in effect at the time of Executive’s Separation from Service, then Executive’s target payment under the Incentive Compensation Plan for the year of Executive’s Separation from Service will be used to calculate the amount to which Executive is entitled pursuant to this paragraph (ii) in lieu of the average payment for the preceding three years. (iii) A single lump sum cash payment in an amount equal to a prorated portion (based on the number of calendar days that have elapsed during the calendar year prior to the date of Executive’s Separation from Service) of the payment to which Executive would be entitled under the Incentive Compensation Plan (had Executive’s Separation from Service not occurred) for the calendar year in which Executive’s Separation from Service occurs. The payment due pursuant to this paragraph (iii) will be based on Executive’s target payment under the Incentive Compensation Plan for the year in which Executive’s Separation from Service occurs. (iv) A single lump sum cash payment in the amount of the payment, if any, to which Executive is entitled under the Incentive Compensation Plan (based on Executive’s actual performance) for the year prior to the year in which the Executive’s Separation from Service occurs, to the extent Executive has not yet received such payment from Company. (v) The continuation of any health, life, disability or other insurance benefits that Executive was receiving as of Executive’s last day of active employment for a period expiring on the earlier of (a) [24 for CEO] [18 for Pres or XXX] [00 for VP] months following Executive’s Separation from Service or, if Executive’s Separation from Service occurs within six months prior to the occurrence of a Change in Control, for the [24 for CEO] [18 for Pres or XXX] [00 for VP] months following the date on which the Change in Control occurs or (b) the day on which Executive becomes eligible to receive any substantially similar benefits, on a benefit-by-benefit basis, under any plan or program of any successor employer. The continuation of any health, life, disability or other insurance benefits shall run concurrently with Executive’s COBRA continuation coverage for health benefits. Company will satisfy the obligation to provide the health insurance benefits pursuant to this paragraph (v) by either paying for or reimbursing Executive for the employer’s portion of the COBRA premium (and Executive shall cooperate with Company in all respects in securing and maintaining such benefits, including exercising all appropriate COBRA elections and complying with all terms and conditions of such coverage in a manner to minimize the cost). In the event Executive’s right to Company’s continued payment for the employer’s portion of health insurance benefits extends beyond the applicable COBRA coverage period, Company will satisfy the obligation to provide the health insurance benefits by either paying for or reimbursing Executive for the employer’s portion of premiums for health insurance benefits that are comparable to those Executive receives during the COBRA continuation period. Company also will reimburse Executive for the employer’s portion of the cost of comparable coverage for all other insurance benefits that are not subject to the COBRA continuation rules. It will be Executive’s responsibility to procure such benefits and Company will promptly reimburse Executive for the employer’s portion of the premiums for such benefits upon Executive’s submission of an invoice or other acceptable proof of payment. For purposes of this Agreement, the “employer’s portion” is an amount equal to the cost of Company’s corresponding coverage for the applicable benefit for an active employee at Executive’s level at the time of Executive’s Separation from Service. Notwithstanding the foregoing, if Executive has elected a health care option pursuant to which Company has agreed to make contributions to Executive’s Health Savings Account, then Company will pay to Executive a single lump sum cash payment in an amount equal to the contributions that Company would have made to Executive’s Health Savings Account during the [12 for VP] [18 for Pres or XXX] [00 for CEO] month benefit continuation period described above had Executive not incurred a Separation from Service.

Change in Control Severance Benefits. If Executive is entitled to receive Change in Control Severance Benefits pursuant to Section 2(a), the Change in Control Severance Benefits provided to Executive pursuant to the terms of this Agreement will consist of the following: (i) A single lump sum cash payment in an amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the greater of (a) Executive’s annualized base salary as of the date of Executive’s Separation from Service or (b) Executive’s annualized base salary in effect immediately prior to any material diminution in Executive’s base salary following the execution of this Agreement. (ii) A single lump sum cash payment in an amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the average payment to which Executive was entitled pursuant to the UniSource Energy Corporation Performance Enhancement Plan or any successor plan (the “Incentive Compensation Plan”) for the three calendar years immediately preceding the calendar year in which Executive’s Separation from Service occurs. If, during each of the three calendar years prior to the year in which Executive’s Separation from Service occurs, Executive was not eligible to (a) participate in the Incentive Compensation Plan or or (b) receive a payment pursuant to the Incentive Compensation Plan based on Executive’s pay grade level in effect at the time of Executive’s Separation from Service, then Executive’s target payment under the Incentive Compensation Plan for the year of Executive’s Separation from Service will be used to calculate the amount to which Executive is entitled pursuant to this paragraph (ii) in lieu of the average payment for the preceding three years. (iii) A single lump sum cash payment in an amount equal to a prorated portion (based on the number of calendar days that have elapsed during the calendar year prior to the date of Executive’s Separation from Service) of the payment to which Executive would be entitled under the Incentive Compensation Plan (had Executive’s Separation from Service not occurred) for the calendar year in which Executive’s Separation from Service occurs. The payment due pursuant to this paragraph (iii) will be based on Executive’s target payment under the Incentive Compensation Plan for the year in which Executive’s Separation from Service occurs. (iv) A single lump sum cash payment in the amount of the payment, if any, to which Executive is entitled under the Incentive Compensation Plan (based on Executive’s actual performance) for the year prior to the year in which the Executive’s Separation from Service occurs, to the extent Executive has not yet received such payment from Company. (v) The continuation of any health, life, disability or other insurance benefits that Executive was receiving as of Executive’s last day of active employment for a period expiring on the earlier of (a) [24 for CEO] [18 for Pres or XXX] [00 for VP] months following Executive’s Separation from Service or, if Executive’s Separation from Service occurs within six months prior to the occurrence of a Change in Control, for the [24 for CEO] [18 for Pres or XXX] [00 for VP] months following the date on which the Change in Control occurs or (b) the day on which Executive becomes eligible to receive any substantially similar benefits, on a benefit-by-benefit basis, under any plan or program of any successor employer. The continuation of any health, life, disability or other insurance benefits shall run concurrently with Executive’s COBRA continuation coverage for health benefits. Company will satisfy the obligation to provide the health insurance benefits pursuant to this paragraph (v) by either paying for or reimbursing Executive for the employer’s portion of the COBRA premium (and Executive shall cooperate with Company in all respects in securing and maintaining such benefits, including exercising all appropriate COBRA elections and complying with all terms and conditions of such coverage in a manner to minimize the cost). In the event Executive’s right to Company’s continued payment for the employer’s portion of health insurance benefits extends beyond the applicable COBRA coverage period, Company will satisfy the obligation to provide the health insurance benefits by either paying for or reimbursing Executive for the employer’s portion of premiums for health insurance benefits that are comparable to those Executive receives during the COBRA continuation period. Company also will reimburse Executive for the employer’s portion of the cost of comparable coverage for all other insurance benefits that are not subject to the COBRA continuation rules. It will be Executive’s responsibility to procure such benefits and Company will promptly reimburse Executive for the employer’s portion of the premiums for such benefits upon Executive’s submission of an invoice or other acceptable proof of payment. For purposes of this Agreement, the “employer’s portion” is an amount equal to the cost of Company’s corresponding coverage for the applicable benefit for an active employee at Executive’s level at the time of Executive’s Separation from Service. Notwithstanding the foregoing, if Executive has elected a health care option pursuant to which Company has agreed to make contributions to Executive’s Health Savings Account, then Company will pay to Executive a single lump sum cash payment in an amount equal to the contributions that Company would have made to Executive’s Health Savings Account during the [12 for VP] [18 for Pres or XXX] [00 for CEO] 18-month benefit continuation period described above had Executive not incurred a Separation from Service.

Change in Control Severance Benefits. If (a) Subject to Section 3.4, the Participating Company shall pay the Executive is entitled Change in Control Severance Benefits, as described in Section 4.1(b), if the Executive receives or delivers a Notice of Termination of a Qualifying Termination of the Executive’s employment pursuant to receive Section 3.1(a) or 3.1(b). (b) The Change in Control Severance Benefits to be provided to the Executive pursuant to Section 2(a), the Change in Control Severance Benefits provided to Executive pursuant to the terms of this Agreement will consist of 4.1(a) shall be the following: (i) A An amount equal to the Executive’s unpaid Base Salary, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the date of the Qualifying Termination shall be paid in cash to the Executive in a single lump sum cash on the Payment Date. Such payment in an shall constitute full satisfaction for these amounts owed to the Executive. (ii) An amount equal to [the unpaid, accrued vacation pay owed to the Executive through and including the date of the Qualifying Termination shall be made in cash to the Executive in a single lump sum on the Payment Date. Such payment shall constitute full satisfaction for these amounts owed to the Executive and in no event shall the Executive accrue additional vacation time after the date of the Executive’s Qualifying Termination. (iii) Any amount payable to the Executive under the annual bonus plan then in effect in respect of the most recently completed fiscal year, to the extent not theretofore paid, shall be paid in cash to the Executive in a single lump sum at the applicable time provided in the annual bonus plan then in effect. Such payment shall constitute full satisfaction for this amount owed to the Executive. (iv) An amount equal to: (A) three (3) for Tier I Executives, (B) two (2) for CEO] [Tier II Executives or (C) one and one-half (1 1/2) for Pres or SVP] [one for VP] Tier III Executives times the greater of sum of: (a1) the Executive’s annualized base salary as annual rate of Base Salary in effect upon the date of the Qualifying Termination or, if greater, by the Executive’s Separation from Service or (b) Executive’s annualized base salary annual rate of Base Salary in effect immediately prior to any material diminution the occurrence of the Change in Control plus (2) the Executive’s base salary following then current target bonus opportunity established under the execution annual bonus plan in effect for the bonus plan year in which the date of this Agreementthe Executive’s Qualifying Termination occurs or, if greater, the Executive’s target bonus opportunity in effect prior to the occurrence of the Change in Control. The Participating Company shall pay such amount in cash to the Executive in a single lump sum on the Payment Date. (iiv) A single lump sum cash payment in an An amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the average payment to which annual bonus the Executive was entitled pursuant to would have earned under the UniSource Energy Corporation Performance Enhancement Plan or any successor annual bonus plan (the “Incentive Compensation Plan”) for the three calendar years immediately preceding the calendar plan year in which Executive’s Separation from Service occurs. If, during each of the three calendar years prior to the year in which Executive’s Separation from Service Qualifying Termination occurs, Executive was not eligible to (a) participate in the Incentive Compensation Plan or (b) receive a payment pursuant to the Incentive Compensation Plan determined based on Executive’s pay grade level in effect at the time of Executive’s Separation from Service, then Executive’s target payment actual performance achieved under the Incentive Compensation Plan such annual bonus plan for the such plan year of Executive’s Separation from Service will be used to calculate the amount to which Executive is entitled pursuant to this paragraph (ii) in lieu of the average payment for the preceding three years. (iii) A single lump sum cash payment in an amount equal to and adjusted on a prorated portion (pro rata basis based on the number of calendar days that have elapsed months the Executive was actually employed during such plan year (full credit is given for partial months of employment), shall be paid in cash to the calendar year prior Executive in a single lump sum at the applicable time provided in the annual bonus plan then in effect. Such payment shall constitute full satisfaction for this amount owed to the Executive. (vi) The Company shall provide, at the same cost structure as applicable to active employees, COBRA continuation coverage for the Executive (and the Executive’s eligible dependents) under the Company’s medical benefit plan for a period of up to six (6) months from the date of the Qualifying Termination (the “Subsidized COBRA Period”). The Subsidized COBRA Period will be included in the Executive’s Separation from Service) COBRA continuation coverage period. If the Executive chooses to continue COBRA continuation coverage after the Subsidized COBRA Period, the Executive will be responsible for the entire premium payment for the remainder of the payment to which Executive would be entitled under the Incentive Compensation Plan (had Executive’s Separation from Service not occurredCOBRA continuation coverage period (in most cases an additional twelve (12) for the calendar year in which Executive’s Separation from Service occurs. The payment due pursuant to this paragraph (iii) will be based on Executive’s target payment under the Incentive Compensation Plan for the year in which Executive’s Separation from Service occursmonths). (ivvii) A single lump sum cash payment If the Executive actively participates in the amount any of the paymentCompany’s voluntary, if any, to which Executive is entitled under employee pay-all plans or programs on the Incentive Compensation Plan (based on Executive’s actual performance) for the year prior to the year in which date of the Executive’s Separation from Service occursQualifying Termination, the Executive may continue to participate in such plan or program after the date of the Qualifying Termination if such continued participation is permitted by the third-party provider pursuant to the extent Executive has not yet received such payment from Companyterms and conditions set forth therein. (vc) The continuation Notwithstanding the foregoing, if the Qualifying Termination giving rise to the payment of any healthChange in Control Severance Benefits under this Section 4.1 is due to a Change in Control Good Reason as defined in Section 2(j)(iii), life, disability or other insurance benefits that Executive was receiving as of then the Executive’s last day of active employment for a period expiring on the earlier of (a) [24 for CEO] [18 for Pres or XXX] [00 for VP] months following Executive’s Separation from Service or, if Executive’s Separation from Service occurs within six months Base Salary and target bonus opportunity in effect immediately prior to the occurrence of a Change in Control, for the [24 for CEO] [18 for Pres or XXX] [00 for VP] months following the date on which the such Change in Control occurs or (b) the day on which Executive becomes eligible to receive any substantially similar benefits, on a benefit-by-benefit basis, under any plan or program of any successor employer. The continuation of any health, life, disability or other insurance benefits Good Reason shall run concurrently with Executive’s COBRA continuation coverage be used for health benefits. Company will satisfy the obligation to provide the health insurance benefits pursuant to this paragraph (v) by either paying for or reimbursing Executive for the employer’s portion of the COBRA premium (and Executive shall cooperate with Company in all respects in securing and maintaining such benefits, including exercising all appropriate COBRA elections and complying with all terms and conditions of such coverage in a manner to minimize the cost). In the event Executive’s right to Company’s continued payment for the employer’s portion of health insurance benefits extends beyond the applicable COBRA coverage period, Company will satisfy the obligation to provide the health insurance benefits by either paying for or reimbursing Executive for the employer’s portion of premiums for health insurance benefits that are comparable to those Executive receives during the COBRA continuation period. Company also will reimburse Executive for the employer’s portion of the cost of comparable coverage for all other insurance benefits that are not subject to the COBRA continuation rules. It will be Executive’s responsibility to procure such benefits and Company will promptly reimburse Executive for the employer’s portion of the premiums for such benefits upon Executive’s submission of an invoice or other acceptable proof of payment. For purposes of this Agreement, the “employer’s portion” is an amount equal calculating any amounts to the cost of Company’s corresponding coverage for the applicable benefit for an active employee at Executive’s level at the time of Executive’s Separation from Service. Notwithstanding the foregoing, if Executive has elected a health care option pursuant to which Company has agreed to make contributions to Executive’s Health Savings Account, then Company will pay to Executive a single lump sum cash payment in an amount equal to the contributions that Company would have made to Executive’s Health Savings Account during the [12 for VP] [18 for Pres or XXX] [00 for CEO] month benefit continuation period described above had Executive not incurred a Separation from Servicebe paid based thereupon under Section 4.1(b).

Change in Control Severance Benefits. If (a) The Company shall pay Executive is entitled to receive the Severance Benefits described in Paragraph 4(c) herein if during the Initial Term or any Successive Period a Change in Control occurs and if within the thirty-six (36) calendar months immediately following such Change in Control, Executive incurs a Qualifying Termination. The Severance Benefits described in Subparagraphs (4)(c)(i) through (iv) herein shall be paid to Executive in cash in a single lump sum as soon as practicable following Executive’s Qualifying Termination, but in no event later than thirty (30) calendar days after such date. Notwithstanding the foregoing, however, Severance Benefits which become due pursuant to Section 2(a)Paragraphs 4(b)(iv) and 6(a) herein shall be paid immediately. (b) The occurrence of any one or more of the following events (a “Qualifying Termination”) within the thirty-six (36) calendar months immediately following a Change in Control of the Company which occurred during the Term or any Successive Period shall entitle Executive to receive the Severance Benefits: (i) Executive’s involuntary Termination of Employment without Cause; (ii) Executive’s voluntary Termination of Employment for Good Reason; (iii) Executive’s voluntary Termination of Employment, with or without Good Reason, during the thirteenth (13th) calendar month following the month during which the Change in Control Severance Benefits provided to Executive pursuant to occurs; or (iv) The Company, or any successor company, commits a material breach of any of the terms provisions of this Agreement will consist Agreement. A Qualifying Termination shall not include Executive’s Termination of Employment within thirty-six (36) calendar months following a Change in Control by reason of death, disability [as such term is defined under the followingCompany’s governing disability plan (or any successor plan thereto)], Executive’s voluntary Termination of Employment without Good Reason except as otherwise expressly provided in Paragraph 4(b)(iii) above, or Executive’s involuntary Termination of Employment for Cause. Moreover, a Termination of Employment which occurs before a Change in Control or later than thirty-six (36) months following a Change in Control shall not constitute a Qualifying Termination. (c) The “Severance Benefits” provided for in Paragraphs 4(a) and (b) herein are as follows: (i) A single lump lump-sum cash payment in an amount equal to [two the Executive’s unpaid Base Salary , accrued vacation pay, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the date of Executive’s Qualifying Termination. Such payment shall constitute full satisfaction for CEO] [one and onethese amounts owed to Executive. (ii) A lump-half for Pres or SVP] [one for VP] times sum cash amount equal to the sum of (A) three (3) multiplied by the Executive’s Base Salary in effect upon the date of the Qualifying Termination or, if greater, by Executive’s Base Salary in effect immediately prior to the occurrence of the Change in Control plus (B) three (3) multiplied by the greater of (aI) Executive’s annualized base salary annual bonus actually earned by Executive (whether or not deferred) during the bonus plan year which ended immediately prior to the Qualifying Termination or (II) Executive’s then-current target bonus opportunity (stated in terms of a percentage of Base Salary) established under the Company’s Annual Corporate Performance Incentive Plan for Officers (or any successor plan thereto), if any, for the incentive plan year in which the date of Executive’s Qualifying Termination occurs. (iii) A lump-sum cash amount equal to the greater of (A) the Executive’s then-current target bonus opportunity (stated in terms of a percentage of Base Salary) established under the Company’s Annual Corporate Performance Incentive Plan for Officers (or any successor plan thereto), if any, for the incentive plan year in which the date of Executive’s Qualifying Termination occurs, adjusted on a pro rata basis based on the number of days Executive was actually employed during such incentive plan year (but in no event shall such target bonus be less than that in effect for the period immediately prior to the occurrence of the Change in Control); or (B) the actual bonus earned through the date of the Qualifying Termination under the Company’s Annual Corporate Performance Incentive Plan for Officers (or any successor plan thereto), if any, based on the then-current level of goal achievement. Such payment shall constitute full satisfaction for these amounts owed to Executive. (iv) A lump-sum cash amount equal to the product determined by multiplying (A) the sum of the amounts payable under Subparagraphs 4(c) (i), (ii) and (iii) herein by (B) the highest percentage of Executive’s compensation (eligible for such contributions) contributed to the Executive’s account under the Xxxxx, Inc. Profit-Sharing Retirement Plan and Trust (the “Retirement Plan”) during the three (3) consecutive plan years ended immediately prior to the Qualifying Termination. The source of payment of this sum shall be the general assets of the Company unless the payment of such amounts is otherwise permissible from the Retirement Plan without violating any governmental regulations or statutes including, but not limited to, ERISA discrimination testing requirements. (v) At the exact same cost to Executive, and at the same coverage level as in effect as of the date of Executive’s Separation from Service or Qualifying Termination (b) subject to changes in coverage levels applicable to all employees generally), a continuation of the Executive’s annualized base salary in effect immediately (and Executive’s eligible dependents’) health insurance coverage for thirty-six (36) months from the date of the Qualifying Termination. The applicable COBRA health insurance benefit continuation period shall begin coincident with the beginning of this thirty-six (36) month benefit continuation period. Commencing with the end of the Executive’s COBRA period and until the end of the thirty-six (36) month benefit continuation period, the Executive will recognize taxable income equal to the difference between the premium that the Executive actually pays and the premium that would be paid by a similarly situated COBRA participant. Provided, however, the provision of these health insurance benefits shall be discontinued prior to the end of the thirty-six (36) month continuation period to the extent that Executive becomes covered under the health insurance coverage of a subsequent employer which does not contain any material diminution in exclusion or limitation with respect to any preexisting condition of Executive or Executive’s base salary following eligible dependents. For purposes of enforcing this offset provision, Executive shall have a duty to inform the execution Company if Executive becomes covered under any such health insurance of this Agreementa subsequent employer. Executive shall provide, or cause to provide, to the Company in writing correct, complete, and timely information concerning the same. (iivi) A single lump sum cash payment in an amount equal At no expense to [two Executive, standard outplacement services for CEO] [one and one-half for Pres or SVP] [one for VP] times the average payment to which Executive was entitled pursuant to the UniSource Energy Corporation Performance Enhancement Plan or any successor plan (the “Incentive Compensation Plan”) for the three calendar years immediately preceding the calendar year in which Executive’s Separation from Service occurs. If, during each of the three calendar years prior to the year in which Executive’s Separation from Service occurs, Executive was not eligible to (a) participate in the Incentive Compensation Plan or (b) receive a payment pursuant to the Incentive Compensation Plan based on Executive’s pay grade level in effect at the time nationally recognized outplacement firm of Executive’s Separation selection, for a period of up to two (2) years from Service, then Executive’s target payment under the Incentive Compensation Plan for the year of Executive’s Separation from Service will be used to calculate the amount to which Executive is entitled pursuant to this paragraph (ii) in lieu of the average payment for the preceding three years. (iii) A single lump sum cash payment in an amount equal to a prorated portion (based on the number of calendar days that have elapsed during the calendar year prior to the date of Executive’s Separation from ServiceQualifying Termination. However, such services shall be at the Company’s expense to a maximum amount not to exceed twenty percent (20%) of the payment to which Executive would be entitled under the Incentive Compensation Plan (had Executive’s Separation from Service not occurred) Base Salary as of the date of Executive’s Qualifying Termination. In no event shall reimbursement for eligible outplacement expenses be made to the Executive later than the end of the third calendar year in which following the year of the Executive’s Separation from Service occurs. The payment due pursuant to this paragraph (iii) will be based on Executive’s target payment under the Incentive Compensation Plan for the year in which Executive’s Separation from Service occursTermination of Employment. (ivvii) A single lump sum cash payment in For the amount purposes of the paymentcalculating Severance Benefits, if any, to which Executive is entitled under the Incentive Compensation Plan (based on Executive’s actual performance) for the year prior to the year in which the Executive’s Separation from Service occurs, to the extent Executive has employment bonus of $ shall not yet received such payment from Companybe considered an annual or target bonus. (v) The continuation of any health, life, disability or other insurance benefits that Executive was receiving as of Executive’s last day of active employment for a period expiring on the earlier of (a) [24 for CEO] [18 for Pres or XXX] [00 for VP] months following Executive’s Separation from Service or, if Executive’s Separation from Service occurs within six months prior to the occurrence of a Change in Control, for the [24 for CEO] [18 for Pres or XXX] [00 for VP] months following the date on which the Change in Control occurs or (b) the day on which Executive becomes eligible to receive any substantially similar benefits, on a benefit-by-benefit basis, under any plan or program of any successor employer. The continuation of any health, life, disability or other insurance benefits shall run concurrently with Executive’s COBRA continuation coverage for health benefits. Company will satisfy the obligation to provide the health insurance benefits pursuant to this paragraph (v) by either paying for or reimbursing Executive for the employer’s portion of the COBRA premium (and Executive shall cooperate with Company in all respects in securing and maintaining such benefits, including exercising all appropriate COBRA elections and complying with all terms and conditions of such coverage in a manner to minimize the cost). In the event Executive’s right to Company’s continued payment for the employer’s portion of health insurance benefits extends beyond the applicable COBRA coverage period, Company will satisfy the obligation to provide the health insurance benefits by either paying for or reimbursing Executive for the employer’s portion of premiums for health insurance benefits that are comparable to those Executive receives during the COBRA continuation period. Company also will reimburse Executive for the employer’s portion of the cost of comparable coverage for all other insurance benefits that are not subject to the COBRA continuation rules. It will be Executive’s responsibility to procure such benefits and Company will promptly reimburse Executive for the employer’s portion of the premiums for such benefits upon Executive’s submission of an invoice or other acceptable proof of payment. For purposes of this Agreement, the “employer’s portion” is an amount equal to the cost of Company’s corresponding coverage for the applicable benefit for an active employee at Executive’s level at the time of Executive’s Separation from Service. Notwithstanding the foregoing, if Executive has elected a health care option pursuant to which Company has agreed to make contributions to Executive’s Health Savings Account, then Company will pay to Executive a single lump sum cash payment in an amount equal to the contributions that Company would have made to Executive’s Health Savings Account during the [12 for VP] [18 for Pres or XXX] [00 for CEO] month benefit continuation period described above had Executive not incurred a Separation from Service.

Change in Control Severance Benefits. If (a) Subject to Section 3.4, the Participating Company shall pay the Executive is entitled Change in Control Severance Benefits, as described in Section 4.1(b), if the Executive receives or delivers a Notice of Termination of a Qualifying Termination of the Executive’s employment pursuant to receive Section 3.1(a) or 3.1(b). (b) The Change in Control Severance Benefits to be provided to the Executive pursuant to Section 2(a), the Change in Control Severance Benefits provided to Executive pursuant to the terms of this Agreement will consist of 4.1(a) shall be the following: (i) A An amount equal to the Executive’s unpaid Base Salary, unreimbursed business expenses, and all other items earned by and owed to the Executive through and including the date of the Qualifying Termination shall be paid in cash to the Executive in a single lump sum cash on the Payment Date. Such payment in an shall constitute full satisfaction for these amounts owed to the Executive. (ii) An amount equal to [the unpaid, accrued vacation pay owed to the Executive through and including the date of the Qualifying Termination shall be made in cash to the Executive in a single lump sum on the Payment Date. Such payment shall constitute full satisfaction for these amounts owed to the Executive and in no event shall the Executive accrue additional vacation time after the date of the Executive’s Qualifying Termination. (iii) Any amount payable to the Executive under the annual bonus plan then in effect in respect of the most recently completed fiscal year, to the extent not theretofore paid, shall be paid in cash to the Executive in a single lump sum at the applicable time provided in the annual bonus plan then in effect. Such payment shall constitute full satisfaction for this amount owed to the Executive. (iv) An amount equal to: (A) three (3) for Tier I Executives, (B) two (2) for CEO] [Tier II Executives or (C) one and one-half (1 1⁄2) for Pres or SVP] [one for VP] Tier III Executives times the greater of sum of: (a1) the Executive’s annualized base salary as annual rate of Base Salary in effect upon the date of the Qualifying Termination or, if greater, by the Executive’s Separation from Service or (b) Executive’s annualized base salary annual rate of Base Salary in effect immediately prior to any material diminution the occurrence of the Change in Control plus (2) the Executive’s base salary following then current target bonus opportunity established under the execution annual bonus plan in effect for the bonus plan year in which the date of this Agreementthe Executive’s Qualifying Termination occurs or, if greater, the Executive’s target bonus opportunity in effect prior to the occurrence of the Change in Control. The Participating Company shall pay such amount in cash to the Executive in a single lump sum on the Payment Date. (iiv) A single lump sum cash payment in an An amount equal to [two for CEO] [one and one-half for Pres or SVP] [one for VP] times the average payment to which annual bonus the Executive was entitled pursuant to would have earned under the UniSource Energy Corporation Performance Enhancement Plan or any successor annual bonus plan (the “Incentive Compensation Plan”) for the three calendar years immediately preceding the calendar plan year in which Executive’s Separation from Service occurs. If, during each of the three calendar years prior to the year in which Executive’s Separation from Service Qualifying Termination occurs, Executive was not eligible to (a) participate in the Incentive Compensation Plan or (b) receive a payment pursuant to the Incentive Compensation Plan determined based on Executive’s pay grade level in effect at the time of Executive’s Separation from Service, then Executive’s target payment actual performance achieved under the Incentive Compensation Plan such annual bonus plan for the such plan year of Executive’s Separation from Service will be used to calculate the amount to which Executive is entitled pursuant to this paragraph (ii) in lieu of the average payment for the preceding three years. (iii) A single lump sum cash payment in an amount equal to and adjusted on a prorated portion (pro rata basis based on the number of calendar days that have elapsed months the Executive was actually employed during such plan year (full credit is given for partial months of employment), shall be paid in cash to the calendar year prior Executive in a single lump sum at the applicable time provided in the annual bonus plan then in effect. Such payment shall constitute full satisfaction for this amount owed to the Executive. (vi) The Company shall provide, at the same cost structure as applicable to active employees, COBRA continuation coverage for the Executive (and the Executive’s eligible dependents) under the Company’s medical benefit plan for a period of up to six (6) months from the date of the Qualifying Termination (the “Subsidized COBRA Period”). The Subsidized COBRA Period will be included in the Executive’s Separation from Service) COBRA continuation coverage period. If the Executive chooses to continue COBRA continuation coverage after the Subsidized COBRA Period, the Executive will be responsible for the entire premium payment for the remainder of the payment to which Executive would be entitled under the Incentive Compensation Plan (had Executive’s Separation from Service not occurredCOBRA continuation coverage period (in most cases an additional twelve (12) for the calendar year in which Executive’s Separation from Service occurs. The payment due pursuant to this paragraph (iii) will be based on Executive’s target payment under the Incentive Compensation Plan for the year in which Executive’s Separation from Service occursmonths). (ivvii) A single lump sum cash payment If the Executive actively participates in the amount any of the paymentCompany’s voluntary, if any, to which Executive is entitled under employee pay-all plans or programs on the Incentive Compensation Plan (based on Executive’s actual performance) for the year prior to the year in which date of the Executive’s Separation from Service occursQualifying Termination, the Executive may continue to participate in such plan or program after the date of the Qualifying Termination if such continued participation is permitted by the third-party provider pursuant to the extent Executive has not yet received such payment from Companyterms and conditions set forth therein. (vc) The continuation Notwithstanding the foregoing, if the Qualifying Termination giving rise to the payment of any healthChange in Control Severance Benefits under this Section 4.1 is due to a Change in Control Good Reason as defined in Section 2(j)(iii), life, disability or other insurance benefits that Executive was receiving as of then the Executive’s last day of active employment for a period expiring on the earlier of (a) [24 for CEO] [18 for Pres or XXX] [00 for VP] months following Executive’s Separation from Service or, if Executive’s Separation from Service occurs within six months Base Salary and target bonus opportunity in effect immediately prior to the occurrence of a Change in Control, for the [24 for CEO] [18 for Pres or XXX] [00 for VP] months following the date on which the such Change in Control occurs or (b) the day on which Executive becomes eligible to receive any substantially similar benefits, on a benefit-by-benefit basis, under any plan or program of any successor employer. The continuation of any health, life, disability or other insurance benefits Good Reason shall run concurrently with Executive’s COBRA continuation coverage be used for health benefits. Company will satisfy the obligation to provide the health insurance benefits pursuant to this paragraph (v) by either paying for or reimbursing Executive for the employer’s portion of the COBRA premium (and Executive shall cooperate with Company in all respects in securing and maintaining such benefits, including exercising all appropriate COBRA elections and complying with all terms and conditions of such coverage in a manner to minimize the cost). In the event Executive’s right to Company’s continued payment for the employer’s portion of health insurance benefits extends beyond the applicable COBRA coverage period, Company will satisfy the obligation to provide the health insurance benefits by either paying for or reimbursing Executive for the employer’s portion of premiums for health insurance benefits that are comparable to those Executive receives during the COBRA continuation period. Company also will reimburse Executive for the employer’s portion of the cost of comparable coverage for all other insurance benefits that are not subject to the COBRA continuation rules. It will be Executive’s responsibility to procure such benefits and Company will promptly reimburse Executive for the employer’s portion of the premiums for such benefits upon Executive’s submission of an invoice or other acceptable proof of payment. For purposes of this Agreement, the “employer’s portion” is an amount equal calculating any amounts to the cost of Company’s corresponding coverage for the applicable benefit for an active employee at Executive’s level at the time of Executive’s Separation from Service. Notwithstanding the foregoing, if Executive has elected a health care option pursuant to which Company has agreed to make contributions to Executive’s Health Savings Account, then Company will pay to Executive a single lump sum cash payment in an amount equal to the contributions that Company would have made to Executive’s Health Savings Account during the [12 for VP] [18 for Pres or XXX] [00 for CEO] month benefit continuation period described above had Executive not incurred a Separation from Servicebe paid based thereupon under Section 4.1(b).