Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following: (i) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination. (ii) For a period of _____ (___) months following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage under the group medical plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the Company, the Company may procure comparable coverage for the Executive elsewhere on the same relative terms. (iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlier, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwise. (b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any additional amount or gross-up payment related to any of the tax imposed on the Executive by Section 4999 of the Code. The tax, if any, imposed on the Executive by Section 4999 of the Code shall be the full responsibility of the Executive (subject to withholding by the Company). (c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company. For the avoidance of doubt, if more than one Change in Control occurs during the term hereof, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1) shall be based upon the highest annual base salary, targeted base bonus and car allowance payable to Executive on the date of any such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not be entitled to receive severance compensation under Section 4(a) more than once.
Appears in 1 contract
Samples: Change in Control Severance Compensation and Restrictive Covenant Agreement (Mimedx Group, Inc.)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i1) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) three times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii2) For a period of _____ (___) months three years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan Company.
(3) For a period of three years after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the CompanyTermination, the Company may procure comparable shall continue the Executive’s car allowance (at the rate of $1,300 per month or at such higher rate as is in effect for Executive’s position immediately prior to a Change in Control or the Date of Termination) and extend full insurance coverage for the Executive elsewhere on the same relative terms.
(iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or Executive’s primary automobile in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12three-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseyear period.
(b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) and the Company has determined, based upon the advise of tax counsel selected by the Company’s independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the “Gross-up payment related to Up Payment”) such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the “Excise Tax”) and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive’s employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code (“Repayment Amount”). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive’s employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive (“Additional Gross-up”), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policiespolicies and, unless the Executive elects, that certain Severance Compensation and Restrictive Covenant Agreement of even date between the Executive and the Company; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute Payments made hereunder must be reported as “excess parachute payments” in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. For If the avoidance Internal Revenue Service proposes an assessment of doubtExcise Tax against the Executive in excess of the amount, if more than one Change any, taken into account at the time specified in Control occurs during Section 4(a), then, if the term hereofCompany notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1Executive (i) shall be based upon in good faith cooperate with the highest annual base salary, targeted base bonus Company in contesting such proposed assessment; and car allowance payable to Executive on the date of any (ii) such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not settle such contest without the written consent of the Company. Any such contest shall be entitled to receive severance compensation under Section 4(a) more than oncecontrolled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c2(b) or 3(d2(c) and Section 3(f2(e), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 4 hereof, subject to Section 17 below, the following:
(i) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) two times the Executive’s annual base compensation and targeted base bonus on the date Date of the Change in ControlTermination, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii) For a period of _____ (___) months two years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date Date of a Change in Control, Termination to the same extent and at the same cost as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the Company, the Company may procure comparable coverage for the Executive elsewhere on the same relative termsperiod.
(iii) Notwithstanding any other provision For a period of this Agreementtwo years after the Date of Termination, it is intended that any payment the Company shall continue the Executive’s car allowance (at the rate of $1,300 per month or benefit provided pursuant to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and higher rate as is in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided effect for Executive’s position immediately prior to a “specified employee” (as defined belowChange in Control or the Date of Termination) prior to and extend full insurance coverage for the six (6) month anniversary Executive’s primary automobile in favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12two-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseyear period.
(b) The parties hereto agree that the payments provided in Section 4(a3(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 4 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any additional amount or gross-up payment related to any of the tax imposed on the Executive by Section 4999 of the Code. The tax, if any, imposed on the Executive by Section 4999 of the Code shall be the full responsibility of the Executive (subject to withholding by the Company).
(c) The payments provided in Section 4(a3(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company. For the avoidance of doubt, if more than one Change in Control occurs during the term hereof, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1) shall be based upon the highest annual base salary, targeted base bonus and car allowance payable to Executive on the date of any such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not be entitled to receive severance compensation under Section 4(a) more than once.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a( a ) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s his employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i( 1 ) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) one times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii( 2 ) For a period of _____ (___) months one year following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan Company.
( 3 ) For the shorter of a period of one year after the Date of Termination or Executive’s participation in such plans would have adverse consequences for expiration of the Companylease term, the Company may procure comparable coverage for shall allow the Executive elsewhere on the same relative terms.
(iii) Notwithstanding to utilize for his business and personal use any other provision of this Agreement, it is intended that any payment or benefit provided pursuant Company leased automobile furnished to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) him immediately prior to the six (6) month anniversary Change in Control and shall reimburse the Executive for the maintenance and repair costs of such automobile and extend full insurance coverage relating to such automobile in favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s deathduring such period. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification dateaddition, the Executive shall be treated as a specified employee entitled, at the Executive’s sole discretion, to exercise any option to acquire such automobile pursuant to the terms which may be provided in the lease agreement for the 12automobile in question. For the balance of the period of one year after the Date of Termination (or for the entire one-month year period beginning if Executive was not being furnished a leased automobile on the April 1 following the identification date. Notwithstanding the foregoingDate of Termination), the Company shall pay the Executive shall not be treated a car allowance (at the rate of $1,300 per month or at such higher rate as is in effect for Executive’s position immediately prior to a specified employee unless any stock Change in Control or the Date of Termination) and extend full insurance coverage for the Executive’s primary automobile in favor of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseExecutive, as additional named insured, during such period.
(b( b ) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “"excess parachute payment” " within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “"Compensation Payments”") and the Company has determined, based upon the advise of tax counsel selected by the Company’s independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“"Parachute Payments”"), any of such Parachute Payments must be reported by the Company as “"excess parachute payments” " and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the "Gross-up payment related to Up Payment") such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the "Excise Tax") and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive’s employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive’s employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive ("Additional Gross-up"), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c( c ) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company.
( d ) Unless the Company determines that any Parachute Payments made hereunder must be reported as "excess parachute payments" in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. For If the avoidance Internal Revenue Service proposes an assessment of doubtExcise Tax against the Executive in excess of the amount, if more than one Change any, taken into account at the time specified in Control occurs during Section 4(a), then, if the term hereofCompany notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1Executive (i) shall be based upon in good faith cooperate with the highest annual base salary, targeted base bonus Company in contesting such proposed assessment; and car allowance payable to Executive on the date of any (ii) such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not settle such contest without the written consent of the Company. Any such contest shall be entitled to receive severance compensation under Section 4(a) more than oncecontrolled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s 's employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s his employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s 's adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i1) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) three times the Executive’s 's annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii2) For a period of _____ (___) months three years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan Company.
(3) For a period of three years after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the CompanyTermination, the Company may procure comparable shall continue the Executive's car allowance (at the rate of $1,714 per month or at such higher rate as is in effect for Executive's position immediately prior to a Change in Control or the Date of Termination) and extend full insurance coverage for the Executive elsewhere on the same relative terms.
(iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or Executive's primary automobile in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12three-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseyear period.
(b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s 's services rendered to the Company and in consideration of the Executive’s 's adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “"excess parachute payment” " within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “"Compensation Payments”") and the Company has determined, based upon the advise of tax counsel selected by the Company's independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“"Parachute Payments”"), any of such Parachute Payments must be reported by the Company as “"excess parachute payments” " and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the "Gross-up payment related to Up Payment") such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the "Excise Tax") and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive's residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive's employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive ("Additional Gross-up"), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s 's established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s 's vested rights under any other employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute Payments made hereunder must be reported as "excess parachute payments" in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. For If the avoidance Internal Revenue Service proposes an assessment of doubtExcise Tax against the Executive in excess of the amount, if more than one Change any, taken into account at the time specified in Control occurs during Section 4(a), then, if the term hereofCompany notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1Executive (i) shall be based upon in good faith cooperate with the highest annual base salary, targeted base bonus Company in contesting such proposed assessment; and car allowance payable to Executive on the date of any (ii) such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not settle such contest without the written consent of the Company. Any such contest shall be entitled to receive severance compensation under Section 4(a) more than oncecontrolled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ one and three quarters (_____1.75) times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii) For a period of _____ twenty-one (___21) months following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage under the group medical plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the Company, the Company may procure comparable coverage for the Executive elsewhere on the same relative terms.
(iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlier, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwise.
(b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any additional amount or gross-up payment related to any of the tax imposed on the Executive by Section 4999 of the Code. The tax, if any, imposed on the Executive by Section 4999 of the Code shall be the full responsibility of the Executive (subject to withholding by the Company).
(c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company. For the avoidance of doubt, if more than one Change in Control occurs during the term hereof, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1) shall be based upon the highest annual base salary, targeted base bonus and car allowance payable to Executive on the date of any such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not be entitled to receive severance compensation under Section 4(a) more than once.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Mimedx Group, Inc.)
Compensation and Benefits Upon Termination of Employment. (a( a ) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c2(b) or 3(d2(c) and Section 3(f2(e), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 4 hereof, subject to Section 17 below, the following:
(i) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) two times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Controlthis Agreement, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii) For a period of _____ (___) months two years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date Date of a Change in Control, Termination to the same extent and at the same cost as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the Company, the Company may procure comparable coverage for the Executive elsewhere on the same relative termsperiod.
(iii) Notwithstanding any other provision For a period of this Agreementtwo years after the Date of Termination, it is intended that any payment the Company shall continue the Executive’s car allowance (at the rate of $1,300 per month or benefit provided pursuant to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and higher rate as is in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided effect for Executive’s position immediately prior to a “specified employee” (as defined belowChange in Control or the Date of Termination) prior to and extend full insurance coverage for the six (6) month anniversary Executive’s primary automobile in favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12two-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseyear period.
(b( b ) The parties hereto agree that the payments provided in Section 4(a3(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 4 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any additional amount or gross-up payment related to any of the tax imposed on the Executive by Section 4999 of the Code. The tax, if any, imposed on the Executive by Section 4999 of the Code shall be the full responsibility of the Executive (subject to withholding by the Company).
(c( c ) The payments provided in Section 4(a3(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company. For the avoidance of doubt, if more than one Change in Control occurs during the term hereof, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1) shall be based upon the highest annual base salary, targeted base bonus and car allowance payable to Executive on the date of any such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not be entitled to receive severance compensation under Section 4(a) more than once.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) three times the Executive’s annual base compensation and compensation, targeted base bonus and annual car allowance on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii) For a period of _____ (___) months three years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthlyCompany. If Executive is not permitted to participate in any Also, during such plan after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the Companythree-year period, the Company may procure comparable will extend full insurance coverage for the Executive elsewhere on Executive’s primary automobile in favor of the same relative termsExecutive, as an additional named insured.
(iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlier, Executive’s death). The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s deathends. In the event that benefits are required to be deferred, any such benefit may be provided during such six month deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the six month deferral period ends (as described above)ends. For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company corporation or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwise.
(b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “Compensation Payments”) and the Company has determined, based upon the advise of tax counsel selected by the Company’s independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“Parachute Payments”), any of such Parachute Payments must be reported by the Company as “excess parachute payments” and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the “Gross-up payment related to Up Payment”) such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the “Excise Tax”) and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive’s employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code (“Repayment Amount”). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive’s employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive (“Additional Gross-up”), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company. For the avoidance of doubt, if more than one Change in Control occurs during the term hereof, the term of this Agreement shall not expire until three years after the date of be measured from the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1) shall be based upon the highest annual base salary, targeted base bonus and car allowance payable to Executive on the date of any such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not be entitled to receive severance compensation under Section 4(a) more than once.
(d) Unless the Company determines that any Parachute Payments made hereunder must be reported as “excess parachute payments” in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. If the Internal Revenue Service proposes an assessment of Excise Tax against the Executive in excess of the amount, if any, taken into account at the time specified in Section 4(a), then, if the Company notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the Executive (i) shall in good faith cooperate with the Company in contesting such proposed assessment; and (ii) such Executive shall not settle such contest without the written consent of the Company. Any such contest shall be controlled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a( a ) If the Company shall terminate the Executive’s employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i( 1 ) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) one times the Executive’s annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii( 2 ) For a period of _____ (___) months one year following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan Company.
( 3 ) For a period of one year after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the CompanyTermination, the Company may procure comparable shall continue the Executive’s car allowance (at the rate of $1,300 per month or at such higher rate as is in effect for Executive’s position immediately prior to a Change in Control or the Date of Termination) and extend full insurance coverage for the Executive elsewhere on the same relative terms.
(iii) Notwithstanding any other provision of this Agreement, it is intended that any payment or benefit provided pursuant to or Executive’s primary automobile in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s death. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12one-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification date, the Executive shall be treated as a specified employee for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseyear period.
(b( b ) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s services rendered to the Company and in consideration of the Executive’s adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “"excess parachute payment” " within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “"Compensation Payments”") and the Company has determined, based upon the advise of tax counsel selected by the Company’s independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“"Parachute Payments”"), any of such Parachute Payments must be reported by the Company as “"excess parachute payments” " and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the "Gross-up payment related to Up Payment") such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the "Excise Tax") and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive’s employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive’s employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive ("Additional Gross-up"), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c( c ) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement between Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s vested rights under any other employee benefit plan or policy of the Company.
( d ) Unless the Company determines that any Parachute Payments made hereunder must be reported as "excess parachute payments" in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. For If the avoidance Internal Revenue Service proposes an assessment of doubtExcise Tax against the Executive in excess of the amount, if more than one Change any, taken into account at the time specified in Control occurs during Section 4(a), then, if the term hereofCompany notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1Executive (i) shall be based upon in good faith cooperate with the highest annual base salary, targeted base bonus Company in contesting such proposed assessment; and car allowance payable to Executive on the date of any (ii) such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not settle such contest without the written consent of the Company. Any such contest shall be entitled to receive severance compensation under Section 4(a) more than oncecontrolled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
Compensation and Benefits Upon Termination of Employment. (a) If the Company shall terminate the Executive’s 's employment after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and Section 3(f), or if the Executive shall terminate Executive’s her employment for Good Reason, in either case, on or within three years after a Change in Control, then the Company shall pay to the Executive, as severance compensation and in consideration of the Executive’s 's adherence to the terms of Section 5 hereof, subject to Section 17 below, the following:
(i1) On the Date of Termination, the Company shall become liable to the Executive for an amount equal to _________ (_____) three times the Executive’s 's annual base compensation and targeted base bonus on the date of the Change in Control, which amount shall be paid to the Executive in cash on or before the fifth business day following the Date of Termination.
(ii2) For a period of _____ (___) months three years following the Date of Termination, the following benefits are provided to the Executive: a) if the Executive elects and remains eligible for COBRA coverage for the Executive and anyone entitled to claim under or through the Executive, the Executive shall be entitled to purchase the COBRA coverage all benefits under the group medical hospitalization plan, health care plan, dental plan or vision plan at a subsidized COBRA rate each month equal to the “active” employee contribution rate for Executive and dependents (where applicable); and b) Executive’s participation in the care plan, life or other similar insurance or death benefit plan, or other present or future similar group employee benefit plan or program of the Company (excluding short-term or long-term disability insurance) for which key executives are eligible at the date of a Change in Control, to the same extent as if the Executive had continued to be an employee of the Company during such period and such benefits shall, to the extent not fully paid under any such plan or program, be paid by the Company no less frequently than monthly. If Executive is not permitted to participate in any such plan Company.
(3) For a period of three years after the Date of Termination or Executive’s participation in such plans would have adverse consequences for the CompanyTermination, the Company may procure comparable coverage shall allow the Executive to utilize for her business and personal use any Company leased automobile previously furnished to him or an equivalent type and style of automobile and shall reimburse the Executive for the Executive elsewhere on the same relative terms.
(iii) Notwithstanding any other provision maintenance and repair costs of this Agreement, it is intended that any payment or benefit provided pursuant such automobile and extend full insurance coverage relating to or such automobile in connection with this Agreement that is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code. If and to the extent required by Section 409A of the Code, no payment or benefit shall be made or provided to a “specified employee” (as defined below) prior to the six (6) month anniversary favor of the Executive’s separation from service (within the meaning of Section 409A(a)(2)(A)(i) of the Code) or, if earlieras additional named insured, Executive’s death. The amounts provided for in this Agreement that constitute nonqualified deferred compensation shall be paid as soon as (and no later than thirty (30) days after) the six month deferral period ends or, if earlier, no later than thirty (30) days after the Executive’s deathduring such three-year period. In the event that benefits are required to be deferred, any such benefit may be provided during such deferral period at the Executive’s expense, with the Executive having a right to reimbursement from the Company for the amount of any premiums or expenses paid by the Executive once the deferral period ends (as described above). For this purpose, a specified employee shall mean an individual who is a key employee (as defined in Section 416(i) of the Code without regard to Section 416(i)(5) of the Code) of the Company at any time during the 12-month period ending on each December 31 (the “identification date”). If the Executive is a key employee as of an identification dateaddition, the Executive shall be treated as a specified employee entitled, at the Executive's sole discretion, to exercise any option to acquire such automobile pursuant to the terms which may be provided in the lease agreement for the 12-month period beginning on the April 1 following the identification date. Notwithstanding the foregoing, the Executive shall not be treated as a specified employee unless any stock of the Company or a Company or business affiliated with it pursuant to Sections 414(b) or (c) of the Code is publicly traded on an established securities market or otherwiseautomobile in question.
(b) The parties hereto agree that the payments provided in Section 4(a) hereof are reasonable compensation in light of the Executive’s 's services rendered to the Company and in consideration of the Executive’s 's adherence to the terms of Section 5 hereof. Neither party shall contest the payment of such benefits as constituting an “"excess parachute payment” " within the meaning of Section 280G(b)(1) of the Code. In the event that the Executive becomes entitled to the compensation and benefits described in Section 4(a) hereof (the “"Compensation Payments”") and the Company has determined, based upon the advise of tax counsel selected by the Company's independent auditors and acceptable to the Executive, that, as a result of such Compensation Payments and any other benefits or payments required to be taken into account under Code Section 280G(b)(2) (“"Parachute Payments”"), any of such Parachute Payments must be reported by the Company as “"excess parachute payments” " and are therefore not deductible by the Company, the Company shall not have any obligation and shall not pay to the Executive any at the time specified in Section 4(a) above an additional amount or gross(the "Gross-up payment related to Up Payment") such that the net amount retained by the Executive, after deduction of any of the tax imposed on the Executive by Section 4999 of the CodeCode (the "Excise Tax") and any Federal, state and local income tax and Excise Tax upon the Gross-Up Payment, shall be equal to the Parachute Payments determined prior to the application of this paragraph. The taxvalue of any non-cash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rates of taxation in the state and locality of the Executive's residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax payable by the Executive is subsequently determined to be less than the amount, if any, imposed taken into account hereunder at the time of termination of the Executive's employment, the Executive shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction plus interest on the Executive by amount of such repayment at the rate provided for in Section 4999 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the Excise Tax payable by the Executive is determined to exceed the amount, if any, taken into account hereunder at the time of the termination of the Executive's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalty payable with respect to such excess) immediately prior to the time that the amount of such excess is required to be paid by Executive ("Additional Gross-up"), such that the net amount retained by the Executive, after deduction of any Excise Tax on the Parachute Payments and any Federal, state and local income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal to the full responsibility Parachute Payments determined prior to the application of this paragraph. The obligation to pay any Repayment Amount or Additional Gross-up shall remain in effect under this Agreement for the entire period during which the Executive (subject to withholding by remains liable for the Company)Excise Tax, including the period during which any applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in lieu of any other severance compensation otherwise payable to Executive under any other agreement the Company's established severance compensation policies and, unless the Executive elects, that certain Severance Compensation and Restrictive Covenant Agreement of even date between the Executive and the Company or the Company’s established severance compensation policies; provided, however, that nothing in this Agreement shall affect or impair Executive’s 's vested rights under any other employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute Payments made hereunder must be reported as "excess parachute payments" in accordance with the third sentence of Section 4(b) above, neither party shall file any return taking the position that the payment of such benefits constitutes an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. For If the avoidance Internal Revenue Service proposes an assessment of doubtExcise Tax against the Executive in excess of the amount, if more than one Change any, taken into account at the time specified in Control occurs during Section 4(a), then, if the term hereofCompany notifies Executive in writing that the Company elects to contest such assessment at its expense, unless the Executive waives the right to an Additional Gross-Up Payment, the term of this Agreement shall not expire until three years after the date of the latest such Change in Control to occur and the amount of compensation payable under Section 4(a)(1Executive (i) shall be based upon in good faith cooperate with the highest annual base salary, targeted base bonus Company in contesting such proposed assessment; and car allowance payable to Executive on the date of any (ii) such Change in Control (to the extent not paid previously in connection with an earlier Change in Control), but Executive shall not settle such contest without the written consent of the Company. Any such contest shall be entitled to receive severance compensation under Section 4(a) more than oncecontrolled by the Company, provided, however, that the Executive may participate in such contest.
Appears in 1 contract
Samples: Severance Compensation and Restrictive Covenant Agreement (Matria Healthcare Inc)
