Common use of Compensated Termination Clause in Contracts

Compensated Termination. (a) Executive will be entitled to receive each of the following payments and benefits upon a Compensated Termination in lieu of any payments or benefits to which Executive would otherwise be entitled under any Company severance plan, subject to and contingent upon Executive’s compliance with this Section 6 and Section 7: (1) Any unpaid Base Salary and any accrued but unused vacation pay through the Termination Date, and any Bonus earned but unpaid with respect to the year prior to the calendar year in which the Termination Date occurs, with the amount and timing of payment to be determined in accordance with the terms of the Bonus Plan (without regard to any requirement that Executive be employed either on the date the amount of such Bonus is finally determined or the date on which such Bonus is paid). (2) A pro rata Bonus for the calendar year in which the Termination Date occurs (to the extent not already received), calculated by multiplying the Severance Bonus Amount by a fraction, the numerator of which is the number of days in the current calendar year through the Termination Date and the denominator of which is 365. (3) An amount equal to two times Base Salary. (4) Executive’s medical, dental, and vision coverage will continue through the end of the calendar month in which the Termination Date occurs. Executive may elect to continue his medical, dental, and vision coverage beyond that date by electing coverage under COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985). If Executive elects COBRA coverage, medical, dental, and vision benefits will commence on the first day of the calendar month following the Termination Date, and will continue for the Extended Benefit Period on the same basis as those benefits were provided to Executive and his eligible dependents as an active employee (including any subsequent changes in coverage that are applicable generally to similarly-situated active employees). The Company will reduce Executive’s cost for COBRA coverage to the amount that Executive would have paid for these benefits as an active employee (including any subsequent changes in rates that are applicable generally to similarly-situated active employees). If Executive does not timely elect COBRA coverage, Executive’s medical, dental, and vision coverage will terminate at the end of the calendar month in which the Termination Date occurs. If Executive timely elects but subsequently terminates COBRA coverage, Executive’s medical, dental, and vision coverage will terminate when COBRA coverage terminates. (5) Outplacement services substantially similar to those provided pursuant to the terms of the Company’s severance plan for up to 12 months after the Termination Date. (6) Accrued benefits pursuant to the terms of Company’s deferred compensation, retirement, health, welfare and other similar benefit plans, programs and arrangements. (7) Reimbursement of business expenses through the Termination Date in accordance with Section 5.7. Notwithstanding anything to the contrary in this Agreement, the Company will have no obligation to pay any amounts or provide any benefits described in this Section 6.1(a) if Executive breaches any of his obligations under Section 7. (b) Subject to Section 8.10, the Company will pay the Base Salary and vacation amounts described in Section 6.1(a)(1) and (7) (subject to the submission of appropriate evidence of business expenses) within 10 business days after the Termination Date (unless an earlier date is required by law). (c) Subject to Section 8.10, the Company will pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) and provide the benefits described in Sections 6.1(a)(4) and 6.1(a)(5) only after Executive executes and delivers a Release that becomes irrevocable according to its terms, within the time periods described below. Within 45 days after the Termination Date (the “Delivery Deadline”), Executive must deliver to the Company either an executed Release or a notice stating that Executive has a good faith, bona fide dispute regarding his employment or the termination of his employment with the Company (“Dispute Notice”). If Executive delivers an executed Release by the Delivery Deadline and does not subsequently revoke it, the Company will pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) in a lump sum on the first business day that is 60 days after the Termination Date (except that, as permitted by Section 409A, the Company may, in its sole discretion, make the lump sum payment at the end of the calendar month in which the 30th day after the Termination Date occurs). If Executive delivers a Dispute Notice by the Delivery Deadline, the Company will, as permitted by Section 409A, pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) in a lump sum within 30 days after the date that the dispute is resolved and an executed Release is delivered and becomes irrevocable in accordance with its terms (the “Resolution Date”), but in no event later than the calendar year in which the Resolution Date occurs. Executive will be deemed to have waived the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) and the benefits described in Sections 6.1(a)(4) and 6.1(a)(5), and the Company will have no further obligation to pay those amounts or provide those benefits (except as and to the extent required by law), if (i) Executive fails to deliver either an executed Release or a Dispute Notice by the Delivery Deadline, or (ii) having timely delivered an executed Release, Executive revokes the Release and does not deliver a Dispute Notice by the Delivery Deadline, or (iii) having timely delivered a Dispute Notice, the dispute is not resolved, or (iv) having timely delivered a Dispute Notice, the dispute is resolved and Executive fails to deliver an executed Release or revokes the Release once delivered, or (v) having timely delivered a Dispute Notice, the dispute is resolved in a manner that terminates any further obligations under Sections 6.1(a)(2) through 6.1(a)(5). (d) Notwithstanding anything contained in this Agreement to the contrary, (i) to the extent that any payment or distribution of any type to or for the Executive by the Company, any affiliate of the Company, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the regulations thereunder), or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”) constitute “parachute payments” (within the meaning of Section 280G of the Code), and if (ii) such aggregate would, if reduced by all federal, state and local taxes applicable thereto, including the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), be less than the amount the Executive would receive, after all taxes, if the Executive received aggregate Payments equal (as valued under Section 280G of the Code) to only three times the Executive’s “base amount” (within the meaning of Section 280G of the Code), less $1.00, then (iii) such Payments shall be reduced (but not below zero) if and to the extent necessary so that no Payments to be made or benefit to be provided to the Executive shall be subject to the Excise Tax; provided, however, that the Company shall use its reasonable best efforts to obtain shareholder approval of the Payments provided for in this Agreement in a manner intended to satisfy requirements of the “shareholder approval” exception to Section 280G of the Code and the regulations promulgated thereunder, such that payment may be made to the Executive of such Payments without the application of an Excise Tax. If the Payments are so reduced, then unless the Executive shall have given prior written notice to the Company specifying a different order by which to effectuate the reduction, the Company shall reduce or eliminate the Payments (x) by first reducing or eliminating the portion of the Payments which are not payable in cash (other than that portion of the Payments subject to clause (z) hereof), (y) then by reducing or eliminating cash payments (other than that portion of the Payments subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Payments (whether payable in cash or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation. The determination of whether the Payments shall be reduced as provided in this Section 6.1(d) and the amount of such reduction shall be made at the Company’s expense by an accounting firm selected by the Company from among the four (4) 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 10 days after the first of the following events to occur and as a result cause a distribution of the Payments: (A) the change in ownership or effective control of the Company or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the regulations thereunder) and (B) Executive’s final day of employment. If the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to the Payments, it shall furnish the Executive with an opinion to the Company that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and the Executive.

Compensated Termination. (a) Executive will be entitled to receive each of the following payments and benefits upon a Compensated Termination in lieu of any payments or benefits to which Executive would otherwise be entitled under any Company severance plan, subject to and contingent upon Executive’s compliance with this Section 6 and Section 7: (1) Any unpaid Base Salary and any accrued but unused vacation pay through the Termination Date, and any Bonus earned but unpaid with respect to the year prior to the calendar year in which the Termination Date occurs, with the amount and timing of payment to be determined in accordance with the terms of the Bonus Plan (without regard to any requirement that Executive be employed either on the date the amount of such Bonus is finally determined or the date on which such Bonus is paid). (2) A pro rata Bonus for the calendar year in which the Termination Date occurs (to the extent not already received), calculated by multiplying the Severance Bonus Amount by a fraction, the numerator of which is the number of days in the current calendar year through the Termination Date and the denominator of which is 365. (3) An amount equal to (a) two times Base Salary, if no Change in Control has occurred within one year prior to the Termination Date, or (b) three times Base Salary, if the Termination Date occurs within one year after a Change in Control has occurred. (4) Executive’s medical, dental, and vision coverage will continue through the end of the calendar month in which the Termination Date occurs. Executive may elect to continue his medical, dental, and vision coverage beyond that date by electing coverage under COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985). If Executive elects COBRA coverage, medical, dental, and vision benefits will commence on the first day of the calendar month following the Termination Date, and will continue for the Extended Benefit Period on the same basis as those benefits were provided to Executive and his eligible dependents as an active employee (including any subsequent changes in coverage that are applicable generally to similarly-situated active employees). The Company will reduce Executive’s cost for COBRA coverage to the amount that Executive would have paid for these benefits as an active employee (including any subsequent changes in rates that are applicable generally to similarly-situated active employees). If Executive does not timely elect COBRA coverage, Executive’s medical, dental, and vision coverage will terminate at the end of the calendar month in which the Termination Date occurs. If Executive timely elects but subsequently terminates COBRA coverage, Executive’s medical, dental, and vision coverage will terminate when COBRA coverage terminates. (5) Outplacement services substantially similar to those provided pursuant to the terms of the Company’s severance plan for up to 12 months after the Termination Date. (6) Accrued benefits pursuant to the terms of Company’s deferred compensation, retirement, health, welfare and other similar benefit plans, programs and arrangements. (7) Reimbursement of business expenses through the Termination Date in accordance with Section 5.7. Notwithstanding anything to the contrary in this Agreement, the Company will have no obligation to pay any amounts or provide any benefits described in this Section 6.1(a) if Executive breaches any of his obligations under Section 7. (b) Subject to Section 8.10, the Company will pay the Base Salary and vacation amounts described in Section 6.1(a)(1) and (7) (subject to the submission of appropriate evidence of business expenses) within 10 business days after the Termination Date (unless an earlier date is required by law). (c) Subject to Section 8.10, the Company will pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) and provide the benefits described in Sections 6.1(a)(4) and 6.1(a)(5) only after Executive executes and delivers a Release that becomes irrevocable according to its terms, within the time periods described below. Within 45 days after the Termination Date (the “Delivery Deadline”), Executive must deliver to the Company either an executed Release or a notice stating that Executive has a good faith, bona fide dispute regarding his employment or the termination of his employment with the Company (“Dispute Notice”). If Executive delivers an executed Release by the Delivery Deadline and does not subsequently revoke it, the Company will pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) in a lump sum on the first business day that is 60 days after the Termination Date (except that, as permitted by Section 409A, the Company may, in its sole discretion, make the lump sum payment at the end of the calendar month in which the 30th day after the Termination Date occurs). If Executive delivers a Dispute Notice by the Delivery Deadline, the Company will, as permitted by Section 409A, pay the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) in a lump sum within 30 days after the date that the dispute is resolved and an executed Release is delivered and becomes irrevocable in accordance with its terms (the “Resolution Date”), but in no event later than the calendar year in which the Resolution Date occurs. Executive will be deemed to have waived the amounts described in Sections 6.1(a)(2) and 6.1(a)(3) and the benefits described in Sections 6.1(a)(4) and 6.1(a)(5), and the Company will have no further obligation to pay those amounts or provide those benefits (except as and to the extent required by law), if (i) Executive fails to deliver either an executed Release or a Dispute Notice by the Delivery Deadline, or (ii) having timely delivered an executed Release, Executive revokes the Release and does not deliver a Dispute Notice by the Delivery Deadline, or (iii) having timely delivered a Dispute Notice, the dispute is not resolved, or (iv) having timely delivered a Dispute Notice, the dispute is resolved and Executive fails to deliver an executed Release or revokes the Release once delivered, or (v) having timely delivered a Dispute Notice, the dispute is resolved in a manner that terminates any further obligations under Sections 6.1(a)(2) through 6.1(a)(5). (d) Notwithstanding anything contained in this Agreement to the contrary, (i) to the extent that any payment or distribution of any type to or for the Executive by the Company, any affiliate of the Company, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the regulations thereunder), or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”) constitute “parachute payments” (within the meaning of Section 280G of the Code), and if (ii) such aggregate would, if reduced by all federal, state and local taxes applicable thereto, including the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), be less than the amount the Executive would receive, after all taxes, if the Executive received aggregate Payments equal (as valued under Section 280G of the Code) to only three times the Executive’s “base amount” (within the meaning of Section 280G of the Code), less $1.00, then (iii) such Payments shall be reduced (but not below zero) if and to the extent necessary so that no Payments to be made or benefit to be provided to the Executive shall be subject to the Excise Tax; provided, however, that the Company shall use its reasonable best efforts to obtain shareholder approval of the Payments provided for in this Agreement in a manner intended to satisfy requirements of the “shareholder approval” exception to Section 280G of the Code and the regulations promulgated thereunder, such that payment may be made to the Executive of such Payments without the application of an Excise Tax. If the Payments are so reduced, then unless the Executive shall have given prior written notice to the Company specifying a different order by which to effectuate the reduction, the Company shall reduce or eliminate the Payments (x) by first reducing or eliminating the portion of the Payments which are not payable in cash (other than that portion of the Payments subject to clause (z) hereof), (y) then by reducing or eliminating cash payments (other than that portion of the Payments subject to clause (z) hereof) and (z) then by reducing or eliminating the portion of the Payments (whether payable in cash or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation. The determination of whether the Payments shall be reduced as provided in this Section 6.1(d) and the amount of such reduction shall be made at the Company’s expense by an accounting firm selected by the Company from among the four (4) 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 10 days after the first of the following events to occur and as a result cause a distribution of the Payments: (A) the change in ownership or effective control of the Company or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code and the regulations thereunder) and (B) Executive’s final day of employment. If the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to the Payments, it shall furnish the Executive with an opinion to the Company that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such Determination shall be binding, final and conclusive upon the Company and the Executive.