Common use of Incapacity of Executive Clause in Contracts

Incapacity of Executive. If the Executive suffers from a medically diagnosed physical or mental condition, which in the reasonable business judgment of the Company’s Board of Directors, prevents the Executive (in whole or in part) from performing the duties specified herein for a period of four (4) consecutive months, the Company may cause a separation from service, in which event, the Company will pay Executive his Base Salary and Bonus (computed at up to 100% of plan based on actual performance, but in no event more than 100% of plan regardless of actual performance) in effect on the date of notice of separation from service through the lesser of (i) the death of Executive; or (ii) the remaining term of this Agreement, but in any event through the Expiration Date, reduced by any disability payments received by Executive from any third party. The payment of such amounts shall be made during the remaining term of the Agreement in installments consistent with the Company’s normal payroll practices. It is the intent of the parties to hereby create a “bona fide disability plan provision” exempt from IRC 409A, but, if on the separation from service date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payments, in and to the extent deemed covered by 409A, will commence on the first payroll payment date which is more than six months following the notice of separation from service date and the first payment shall include any amounts that would have otherwise been payable during the six (6) month period. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under Section 4.4 of this Agreement. Nothing in this Section will be interpreted or applied so as to lessen the Executive’s rights under state or federal disability or medical leave laws.

Incapacity of Executive. If the Executive suffers from a medically diagnosed physical or mental condition, which in the reasonable business judgment of the Company’s Board of Directors, prevents the Executive (in whole or in part) from performing the duties specified herein for a period of four (4) consecutive months, the Company may cause a separation from service, in which event, the Company will pay Executive his Base Salary and Bonus (computed at up to 100% of plan based on actual performance, but in no event more than 100% of plan regardless of actual performance) in effect on the date of notice of the separation from service through the lesser of (i) the death of Executive; or (ii) the remaining term of this Agreement, but in any event through the Expiration Date, reduced by any disability payments received by Executive from any third party. The payment of such amounts shall be made during the remaining term of the Agreement in installments consistent with the Company’s normal payroll practices. It is the intent of the parties to hereby create a “bona fide disability plan provision” exempt from IRC 409A, but, if on the separation from service date, the Executive is a “specified employee” as defined in regulations under Section 409A of the Code, such payments, in and to the extent deemed covered by 409A, will commence on the first payroll payment date which is more than six months following the notice of separation from service date and the first payment shall include any amounts that would have otherwise been payable during the six (6) month period. Notwithstanding the foregoing, the amount payable hereunder will be reduced by any benefits payable under any disability plans provided by the Company under Section 4.4 of this Agreement. Nothing in this Section will be interpreted or applied so as to lessen the Executive’s rights under state or federal disability or medical leave laws.