Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after either (x) Executive has given the Company written notice of non-renewal, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or 3.2(b), (iii) pursuant to Executive’s resignation for other than Good Reason, or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (1) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2), (2) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.5, and (3) benefits to which Executive is entitled under the terms of any applicable benefit plan or program. (b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) pursuant to Executive’s resignation for Good Reason, or (iii) pursuant to a termination by the Company pursuant to Section 3.2(c), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (A) Executive shall be entitled to receive the compensation and benefits described in clauses (1) through (3) of Section 6.1(a), and (B) subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of the Release; and (y) Executive’s abiding by the terms of Articles V and VII, then Executive shall be entitled to receive the payments and benefits set forth in Section 6.1(b)(i), (ii) and (iii) below. (i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s Base Salary for the year in which such termination occurs; and (y) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs (the sum of (x) and (y) being referred to as the “Severance Payment”). The Severance Payment will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(i) after March 15 of the calendar year following the calendar year in which the Date of Termination occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Executive in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess). (ii) During the portion, if any, of the 12-month period following the Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage (the “Monthly Reimbursement Amount”). Each payment of the Monthly Reimbursement Amount shall be paid to Executive on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. Notwithstanding the foregoing, if the provision of the benefits described in this paragraph cannot be provided in the manner described above without penalty, tax or other adverse impact on the Company, then the Company and Executive shall negotiate in good faith to determine an alternative manner in which the Company may provide substantially equivalent benefits to Executive without such adverse impact on the Company. (iii) With respect to the outstanding equity compensation awards granted to Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member of the Company Group prior to the Date of Termination (collectively, the “Outstanding Equity Awards”): (x) except as otherwise provided in this Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below), if any, of each Outstanding Equity Award that remains unvested as of the Date of Termination shall become immediately fully vested as of the Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement (other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of the Date of Termination and such Outstanding Equity Award shall remain subject to the terms and conditions set forth in the applicable award agreement(s) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of the Date of Termination (determined after giving effect to clause (x) of this Section 6.1(b)(iii)) shall remain exercisable through the original expiration dates of such stock options. As used herein, the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of shares of Parent Common Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning on the date the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Termination.
Appears in 1 contract
Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) terminate at the expiration of the term provided in Section 3.1 after either (x) Executive has given the Company written notice of non-renewalTerm, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or ), 3.2(b), (iiior 3.2(c) or pursuant to Executive’s resignation for other than Good Reason, or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive (or his estate) shall be entitled to (1i) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2)Termination, (2ii) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.54.6, and (3iii) benefits to which Executive is entitled under the terms of any applicable benefit plan or program; provided, further, that if Executive’s employment is terminated pursuant to Section 3.2(a) or 3.2(b), the forfeiture restrictions on those shares of Restricted Stock that would have lapsed on the next anniversary date of the Effective Date occurring after such event shall lapse as of the Date of Termination.
(b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) terminate pursuant to Executive’s resignation for Good Reason, Reason or (iii) pursuant to a termination by action of the Company pursuant to Section 3.2 for any reason other than those encompassed by Sections 3.2(a), 3.2(b) or 3.2(c)) hereof, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (Ai) Executive shall be entitled to receive the compensation and benefits described in clauses (1i) through (3iii) of Section 6.1(a7.1(a) and (ii) subject to Executive’s delivery, within 50 days after the Date of Termination, of an executed release substantially in the form of the release contained at Appendix A (the “Release”), Executive shall receive the following compensation and benefits from the Company (but no other compensation or benefits after such termination):
(A) the Company shall pay to Executive any unpaid Annual Bonus for the calendar year ending prior to the Date of Termination, which amount shall be payable in a lump-sum on or before the date such annual bonuses are paid to executives who have continued employment with the Company (but in no event later than December 31 following such calendar year);
(B) subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of the Release; and (y) Executive’s abiding by the terms of Articles V and VII, then Executive shall be entitled to receive the payments and benefits set forth in Section 6.1(b)(i), (ii) and (iii) below.
(i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s Base Salary bonus for the year in which such termination occurs; and (y) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs (the sum of (x) and (y) being referred to as the “Severance Payment”). The Severance Payment will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(i) after March 15 of the calendar year following the calendar year in which the Date of Termination occurs in an amount equal to the Annual Bonus for such year as determined in good faith by the Board in accordance with the criteria established pursuant to Section 4.2 hereof and based on the Company’s performance for such year, which amount shall be prorated through and including the Date of Termination (based on the “Applicable March 15”ratio of the number of days Executive was employed by the Company during such year to the number of days in such year), payable in a lump-sum on or before the date such annual bonuses are paid to executives who have continued employment with the Company (but in no event later than May 15 following such calendar year); provided, however, that if this paragraph applies with respect to an Annual Bonus for a calendar year beginning on or after January 1, 2010, that is intended to constitute performance-based compensation within the meaning of, and for purposes of, Section 162(m) exceeds of the Code, then this paragraph shall apply with respect to such Annual Bonus only to the extent the applicable performance criteria have been satisfied as certified by a committee of the Board as required under Section 162(m) of the Code;
(C) the Company shall pay to Executive an amount equal to two times the sum of Executive’s Base Salary as of the Date of Termination and the Average Annual Bonus, which amount shall be divided into and paid in 48 equal consecutive semi-monthly installments payable on the 15th and last day of each of the 24 calendar months following the calendar month in which the Date of Termination occurs; provided, however, that if Executive is a specified employee (as such term is defined in Section 409A of the Code and as determined by the Company in accordance with any method permitted under Section 409A of the Code), then, with respect to any payments of such installment that (x) are not short term deferrals within the meaning of Section 409A of the Code (y) would be paid during the first six months following the Date of Termination and (z) exceed in the aggregate during such six-month period two times the lesser of Executive’s annualized compensation based upon Executive’s annual rate of pay for services during the taxable year of Executive preceding the year in which the termination of employment occurs (adjusted for any increase during that year that was expected to continue indefinitely had no termination of employment occurred) or the maximum exemption amount that may be taken into account under Treasury Regulation a qualified plan pursuant to Section 1.409A-1(b)(9)(iii)(A)401(a)(17) of the Code for the year in which the termination of employment occurs, then such payments of such installment amounts in excess of the amount described in clause (z) above that would otherwise have been paid during such six-month period shall be accumulated and paid to Executive in a lump sum on the Applicable March 15 (date that is six months and a day after the Date of Termination or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments such earlier date upon which such amount can be paid or provided under Section 409A of the Severance Payment payable after Code without being subject to additional taxes and interest. The right to payment of the Applicable March 15 installment amounts pursuant to this paragraph shall be reduced by such excess (beginning with treated as a right to a series of separate payments for purposes of Section 409A of the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess).Code;
(iiD) During during the portion, if any, of the 1218-month period following the Date of Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, dependents under the Company’s group health plans pursuant to under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and/or Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended, the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage coverage;
(E) if the “Monthly Reimbursement Amount”). Each payment Date of Termination occurs within the Monthly Reimbursement Amount shall be paid to Executive one-year period beginning on the Company’s first regularly scheduled pay date upon which a Change in the calendar month immediately following the calendar month Control occurs or is otherwise in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under connection with a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. Notwithstanding the foregoing, if the provision of the benefits described Change in this paragraph cannot be provided in the manner described above without penalty, tax or other adverse impact on the CompanyControl, then the Company and shall cause all stock options awarded to Executive shall negotiate by the Parent Company (to the extent vested) to be exercisable for five years following the Date of Termination (but in good faith to determine an alternative manner in no event later than the earlier of the latest date upon which the Company may provide substantially equivalent benefits option could have expired by its original terms under any circumstances or the tenth anniversary of the original date of grant of the option);
(F) in the event the Date of Termination occurs prior to Executive without such adverse impact the first anniversary date of the Effective Date, the forfeiture restrictions on all shares of Restricted Stock that would have lapsed on the Company.1st and 2nd anniversary date of the Effective Date shall immediately lapse;
(iiiG) With respect in the event the Date of Termination occurs on or after the first anniversary date of the Effective Date, but prior to the outstanding equity compensation awards granted to Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member second anniversary date of the Company Group prior Effective Date, the forfeiture restrictions as to all of those shares of Restricted Stock that would have lapsed on the 3rd anniversary date of the Effective Date shall lapse immediately; additionally the forfeiture restrictions on those shares of Restricted Stock that would have lapsed on the 2nd anniversary date of the Effective Date will lapse, but only as to that fraction of such shares created by dividing (i) the total months (inclusive of any partial months) of the Executive’s employment as measured from the first anniversary date of the Effective Date to the Date of Termination by (collectively, ii) 12; and
(H) in the “Outstanding Equity Awards”): (x) except as otherwise provided in this Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below), if any, of each Outstanding Equity Award that remains unvested as of event the Date of Termination shall become immediately fully vested as occurs at anytime on or after the second anniversary date of the Effective Date, the forfeiture restrictions on all shares of Restricted Stock that would have lapsed on the next anniversary date of the Effective Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement shall immediately lapse.
(other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of c) If the Date of Termination and such Outstanding Equity Award occurs due to death or disability, then the Company shall remain subject cause all stock options awarded to Executive by the Parent Company (to the terms and conditions set forth in the applicable award agreement(sextent vested) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of be exercisable for one year following the Date of Termination (determined after giving effect to clause (x) but in no event later than the earlier of this Section 6.1(b)(iii)) shall remain exercisable through the latest date upon which the option could have expired by its original terms under any circumstances or the tenth anniversary of the original expiration dates date of such stock options. As used hereingrant of the option), and the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of forfeiture restrictions on all shares of Parent Common Restricted Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning that would have lapsed on the next anniversary date of the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Effective Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Terminationshall immediately lapse.
Appears in 1 contract
Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) terminate at the expiration of the term provided in Section 3.1 after either (x) Executive party has given the Company other party written notice of non-renewal, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or 3.2(b), (iii) pursuant to Executive’s resignation for other than Good Reason, Reason or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (1i) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2), (2ii) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.54.4, and (3iii) benefits to which Executive is entitled under the terms of any applicable benefit plan or program.
(b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) terminate pursuant to Executive’s resignation for Good Reason, Reason or (iii) pursuant to a termination by action of the Company pursuant to Section 3.2(c3.2 for any reason other than those encompassed by Section 3.2(a) or 3.2(b), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (Ai) Executive shall be entitled to receive the compensation and benefits described in clauses (1i) through (3iii) of Section 6.1(a), and (Bii) if, on the Date of Termination, the Company does not have a right to terminate Executive’s employment under Section 3.2(a) or 3.2(b), then subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of a release of all claims in a form acceptable to the Company (the “Release”), which shall release and discharge the Company and its affiliates, subsidiaries and benefit plans, and their respective stockholders, officers, directors, managers, members, partners, employees, fiduciaries, agents, representatives and other affiliated persons and entities from any and all claims and causes of action of any kind or character, including all claims and causes of action arising out of Executive’s employment with the Company or its affiliates; and (y) Executive’s abiding by the terms of continued compliance with Executive’s obligations under Articles V and VII, then Executive shall be entitled to receive the following payments and benefits set forth in Section 6.1(b)(i), benefits:
(iiA) and (iii) below.
A severance payment equal to the aggregate of: (i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s then-current annualized Base Salary for the year in which such termination occurs; and (yii) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs Bonus (the aggregate sum of (xi) and (yii) being referred to as the “Severance PaymentAmount”). The , which Severance Payment Amount will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date last day of the month that is on or after includes the date that is sixty (60) 60 days after the Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on such last day of the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination month had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay monthly payroll date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the such installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(iclause (A) after March 15 of the calendar year following the calendar year in which the Date of Termination occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Executive in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the such installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment installments until the aggregate reduction equals such excess). The right to payment of the installment amounts pursuant to this Section 6.1(b)(A) shall be treated as a right to a series of separate payments for purposes of section 409A of the Code.
(iiB) During the portion, if any, of the 12-month period following the Date of Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and/or sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended, the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage (the “Monthly Reimbursement Amount”). Each payment of the Monthly Reimbursement Amount shall be paid to Executive on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that such monthly reimbursement shall in no event exceed the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and monthly amount that would be charged by the Company shall not assume any obligation for payment to effect and continue COBRA coverage similar in amount and type of any such premiums relating coverage Executive was receiving from the Company immediately prior to such COBRA continuation coveragethe Date of Termination. Notwithstanding the foregoingpreceding provisions of this clause (B), if the provision of the benefits benefit described in this paragraph such clause cannot be provided in the manner described above in such clause without penalty, tax or other adverse impact on the Company, then the Company and Executive shall negotiate in good faith to determine an alternative manner in which the Company may provide a substantially equivalent benefits benefit to Executive without such adverse impact on the Company.
(iiic) With respect to Notwithstanding the outstanding equity compensation awards granted to time of payment provisions of Sections 6.1(a) and (b) above, if Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member is a specified employee (as such term is defined in section 409A of the Code and as determined by the Company Group prior in accordance with any method permitted under section 409A of the Code) and the payment of the amount described in such Section would be subject to additional taxes and interest under section 409A of the Date Code because the timing of Termination (collectively, the “Outstanding Equity Awards”): (x) except such payment is not delayed as otherwise provided in this section 409A(a)(2)(B)(i) of the Code and the regulations thereunder, then such amount shall be accumulated and paid (without interest) in a lump sum within five business days after the Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below)409A Payment Date. All subsequent payments, if any, of each Outstanding Equity Award that remains unvested as of the Date of Termination shall become immediately fully vested as of the Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement (other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of the Date of Termination and such Outstanding Equity Award shall remain subject to the terms and conditions set forth be paid in the applicable award agreement(s) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of the Date of Termination (determined after giving effect to clause (x) of this Section 6.1(b)(iii)) shall remain exercisable through the original expiration dates of such stock options. As used manner otherwise specified herein, the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of shares of Parent Common Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning on the date the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Termination.
Appears in 1 contract
Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after either (x) Executive has given the Company written notice of non-renewal, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or 3.2(b), (iii) pursuant to Executive’s resignation for other than Good Reason, or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (1) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2), (2) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.5, and (3) benefits to which Executive is entitled under the terms of any applicable benefit plan or program.
(b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) pursuant to Executive’s resignation for Good Reason, or (iii) pursuant to a termination by the Company pursuant to Section 3.2(c), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (A) Executive shall be entitled to receive the compensation and benefits described in clauses (1) through (3) of Section 6.1(a), and (B) subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of the Release; and (y) Executive’s abiding by the terms of Articles V and VII, then Executive shall be entitled to receive the payments and benefits set forth in Section 6.1(b)(i), (ii) and (iii) below.
(i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s Base Salary for the year in which such termination occurs; and (y) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs (the sum of (x) and (y) being referred to as the “Severance Payment”). The Severance Payment will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(i) after March 15 of the calendar year following the calendar year in which the Date of Termination occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Executive in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess).
(ii) During the portion, if any, of the 12-month period following the Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage (the “Monthly Reimbursement Amount”). Each payment of the Monthly Reimbursement Amount shall be paid to Executive on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. Notwithstanding the foregoing, if the provision of the benefits described in this paragraph cannot be provided in the manner described above without penalty, tax or other adverse impact on the Company, then the Company and Executive shall negotiate in good faith to determine an alternative manner in which the Company may provide substantially equivalent benefits to Executive without such adverse impact on the Company.
(iii) With respect to the outstanding equity compensation awards granted to Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member of the Company Group prior to the Date of Termination (collectively, the “Outstanding Equity Awards”): (x) except as otherwise provided in this Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below), if any, of each Outstanding Equity Award that remains unvested as of the Date of Termination shall become immediately fully vested as of the Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement (other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of the Date of Termination and such Outstanding Equity Award shall remain subject to the terms and conditions set forth in the applicable award agreement(s) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of the Date of Termination (determined after giving effect to clause (x) of this Section 6.1(b)(iii)) shall remain exercisable through the original expiration dates of such stock options. As used herein, the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of shares of Parent Common Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning on the date the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Termination.to
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Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after either (x) Executive has given the Company written notice of non-renewal, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or 3.2(b), (iii) pursuant to Executive’s resignation for other than Good Reason, or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (1) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2), (2) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.5, and (3) benefits to which Executive is entitled under the terms of any applicable benefit plan or program.
(b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) pursuant to Executive’s resignation for Good Reason, or (iii) pursuant to a termination by the Company pursuant to Section 3.2(c), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (A) Executive shall be entitled to receive the compensation and benefits described in clauses (1) through (3) of Section 6.1(a), and (B) subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of the Release; and (y) Executive’s abiding by the terms of Articles V and VII, then Executive shall be entitled to receive the payments and benefits set forth in Section 6.1(b)(i), (ii) and (iii) below.
(i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s Base Salary for the year in which such termination occurs; and (y) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs (the sum of (x) and (y) being referred to as the “Severance Payment”). The Severance Payment will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(i) 6.1 after March 15 of the calendar year following the calendar year in which the Date of Termination occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Executive in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess).
(ii) During the portion, if any, of the 12-month period following the Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage (the “Monthly Reimbursement Amount”). Each payment of the Monthly Reimbursement Amount shall be paid to Executive on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. Notwithstanding the foregoing, if the provision of the benefits described in this paragraph cannot be provided in the manner described above without penalty, tax or other adverse impact on the Company, then the Company and Executive shall negotiate in good faith to determine an alternative manner in which the Company may provide substantially equivalent benefits to Executive without such adverse impact on the Company.
(iii) With respect to the outstanding equity compensation awards granted to Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member of the Company Group prior to the Date of Termination (collectively, the “Outstanding Equity Awards”): (x) except as otherwise provided in this Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below), if any, of each Outstanding Equity Award that remains unvested as of the Date of Termination shall become immediately fully vested as of the Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement (other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of the Date of Termination and such Outstanding Equity Award shall remain subject to the terms and conditions set forth in the applicable award agreement(s) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of the Date of Termination (determined after giving effect to clause (x) of this Section 6.1(b)(iii)) shall remain exercisable through the original expiration dates of such stock options. As used herein, the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of shares of Parent Common Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning on the date the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Termination.to
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Effect of Termination of Employment on Compensation. (a) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after either (x) Executive has given the Company written notice of non-renewal, or (y) the Company has given Executive written notice of non-renewal and provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) for any reason described in Section 3.2(a) or 3.2(b), (iii) pursuant to Executive’s resignation for other than Good Reason, or (iv) by reason of Executive’s death, then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that Executive shall be entitled to (1) payment of all accrued and unpaid Base Salary earned to the Date of Termination as well as any Annual Bonus that has been earned pursuant to Section 4.2 for the calendar year ending on or prior to the Date of Termination but remains unpaid as of the Date of Termination (which Annual Bonus, if any, shall be paid in a lump sum at the time provided for payment in Section 4.2), (2) reimbursement for all incurred but unreimbursed expenses for which Executive is entitled to reimbursement in accordance with Section 4.5, and (3) benefits to which Executive is entitled under the terms of any applicable benefit plan or program.
(b) If Executive’s employment hereunder shall terminate: (i) at the expiration of the term provided in Section 3.1 after the Company has given Executive written notice of non-renewal and not provided Executive a Notice of Non-Compete Waiver pursuant to the terms of Section 7.1(c) below, (ii) pursuant to Executive’s resignation for Good Reason, or (iii) pursuant to a termination by the Company pursuant to Section 3.2(c), then all compensation and all benefits to Executive hereunder shall terminate contemporaneously with such termination of employment, except that (A) Executive shall be entitled to receive the compensation and benefits described in clauses (1) through (3) of Section 6.1(a), and (B) subject to (x) Executive’s execution and delivery to the Company by the Release Expiration Date (and non-revocation within any time provided to do so) of the Release; and (y) Executive’s abiding by the terms of Articles V and VII, then Executive shall be entitled to receive the payments and benefits set forth in Section 6.1(b)(i), (ii) and (iii) below.
(i) The Company shall pay to Executive a total amount equal to the sum of: (x) 12 months’ worth of Executive’s Base Salary for the year in which such termination occurs; and (y) Executive’s then-current target Annual Bonus, which for purposes of this clause (y), shall be deemed to be not less than 100% of Executive’s Base Salary for the year in which such termination occurs (the sum of (x) and (y) being referred to as the “Severance Payment”). The Severance Payment will be divided into 12 substantially equal installments. On the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after Date of Termination, the Company shall pay to Executive, without interest, a number of such installments equal to the number of such installments that would have been paid during the period beginning on the Date of Termination and ending on the Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the Date of Termination had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled pay date coincident with or next following the Date of Termination, and each of the remaining installments shall be paid on a monthly basis thereafter; provided, however, that to the extent, if any, that the aggregate amount of the installments of the Severance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6.1(b)(i) after March 15 of the calendar year following the calendar year in which the Date of Termination occurs (the “Applicable March 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A), then such excess shall be paid to Executive in a lump sum on the Applicable March 15 (or the first business day preceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of the Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with the installment first payable after the Applicable March 15 and continuing with the next succeeding installment until the aggregate reduction equals such excess).
(ii) During the portion, if any, of the 12-month period following the Termination Date (the “Reimbursement Period”) that Executive elects to continue coverage for Executive and Executive’s spouse and eligible dependents, if any, under the Company’s group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall promptly reimburse Executive on a monthly basis for the entire amount Executive pays to effect and continue such coverage (the “Monthly Reimbursement Amount”). Each payment of the Monthly Reimbursement Amount shall be paid to Executive on the Company’s first regularly scheduled pay date in the calendar month immediately following the calendar month in which Executive submits to the Company documentation of the applicable premium payment having been paid by Executive, which documentation shall be submitted by Executive to the Company within 60 days following the date on which the applicable premium payment is paid. Executive shall be eligible to receive such reimbursement payments until the earliest of: (x) the last day of the Reimbursement Period; (y) the date Executive is no longer eligible to receive COBRA continuation coverage; and (z) the date on which Executive becomes eligible to receive coverage under a group health plan sponsored by another employer (and any such eligibility shall be promptly reported to the Company by Executive); provided, however, that the election of COBRA continuation coverage and the payment of any premiums due with respect to such COBRA continuation coverage shall remain Executive’s sole responsibility, and the Company shall not assume any obligation for payment of any such premiums relating to such COBRA continuation coverage. Notwithstanding the foregoing, if the provision of the benefits described in this paragraph cannot be provided in the manner described above without penalty, tax or other adverse impact on the Company, then the Company and Executive shall negotiate in good faith to determine an alternative manner in which the Company may provide substantially equivalent benefits to Executive without such adverse impact on the Company.
(iii) With respect to the outstanding equity compensation awards granted to Executive pursuant to the Stock Incentive Plan or any other equity compensation plan of Parent or another member of the Company Group prior to the Date of Termination (collectively, the “Outstanding Equity Awards”): (x) except as otherwise provided in this Section 6.1(b)(iii), the Applicable Pro-Rated Portion (as defined below), if any, of each Outstanding Equity Award that remains unvested as of the Date of Termination shall become immediately fully vested as of the Date of Termination; provided, however, that if any Outstanding Equity Award is subject to a performance requirement (other than continued employment or service by Executive), then no portion of any such Outstanding Equity Award shall become immediately fully vested as of the Date of Termination and such Outstanding Equity Award shall remain subject to the terms and conditions set forth in the applicable award agreement(s) pursuant to which such Outstanding Equity Award was granted; and (y) all outstanding stock options that have become vested as of the Date of Termination (determined after giving effect to clause (x) of this Section 6.1(b)(iii)) shall remain exercisable through the original expiration dates of such stock options. As used herein, the “Applicable Pro-Rated Portion” means, with respect to an Outstanding Equity Award, the number of shares of Parent Common Stock subject to such Outstanding Equity Award equal to the difference (if positive) between “A” and “B,” where: “A” equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award multiplied by a fraction, the numerator of which is the total number of days during the period beginning on the date the vesting period applicable to such Outstanding Equity Award (the “Vesting Period”) commenced pursuant to the applicable award agreement and ending on the Date of Termination and the denominator of which is the total number of days in the Vesting Period; and “B’’ equals the total number of shares of Parent Common Stock subject to such Outstanding Equity Award, if any, that have become vested in accordance with the applicable award agreement prior to the Date of Termination.and
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