PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following: (i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or (ii) Executive’s voluntary resignation from the Bank’s employ, upon (A) a material diminution in Executive’s base compensation; (B) a material diminution in Executive’s authority duties or responsibilities; (C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer; (D) a material diminution in the budget over which Executive retains authority; (E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or (F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above. (iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. (b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service. (c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. (d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually. (e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 6 contracts
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.), Employment Agreement (Kaiser Federal Financial Group, Inc.), Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 7 and 14.
(a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank Employer of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 5 below, or (B) Termination for Cause as defined in Section 8 6 hereof; or
(ii) Executive’s voluntary resignation from the BankEmployer’s employ, uponupon any
(A) a material diminution reduction in Executive’s base compensation;Base Salary or a reduction in the benefits and perquisites to Executive from those being provided as of the effective date of this Agreement, provided, however, that a reduction in benefits or perquisites that is broad based and affects substantially all executives of the Employer shall not be deemed an Event of Termination hereunder unless such reduction in benefits or perquisites occurs coincident with or following a Change in Control,
(B) a material diminution reduction in Executive’s authority duties duties, responsibilities or responsibilities;
(C) status with the Employer such that there is a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace Pay Grade Level in effect on the date of this Agreement; , of more than three levels (for purposes of this Agreement, “Pay Grade Level” means the level assigned by the Bank, which level corresponds to a particular job description, as circulated annually to the executive officers of the Bank),
(C) a relocation of Executive’s principal place of employment by more than 30 miles from its location as of the effective date of this Agreement,
(D) liquidation or dissolution of the Bank or the Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), ) or (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankBank or the Company, the Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 4 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank or the Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (ii) (A), (B), (C), (D), ) or (E) or above. The Employer shall have at least thirty (F30) abovedays to remedy any condition set forth in clause (ii) (A) through (E), provided, however, that the Employer shall be entitled to waive such period and make an immediate payment hereunder.
(iii) (A) Executive’s involuntary termination by voluntary resignation from the Bank (other than Termination for Cause) Employer’s employ on the effective date of, or at any time within two (2) years following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectivelythereunder, the “HOLA”) as in effect at the time of the Change in ControlControl (collectively, the “HOLA”); or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) other than the Company’s mutual holding company parent, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s outstanding securities, securities except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations or financial institutions, and as a result of which such proxy solicitation, a plan of reorganization, merger consolidation or similar transaction involving the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued Company is approved by the Company’s Board of Directors or the requisite vote of the Company’s stockholders; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b)7, the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (A) Base Salary and (B) the highest rate of bonus Base Salary awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such payments shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment in a lump sum, and shall not be reduced in the event Executive obtains other employment following Separation from Servicean Event of Termination. All amounts payable to Executive shall be paid within thirty (30) days following the Date of Termination or if Executive is a Specified Employee (within the meaning of Treasury Regulations §1.409A-1(i)) on the first business day of the seventh month following the Date of Termination.
(c) Upon the occurrence of an Event of Termination, the Bank Employer will cause to be continued, at the Bank’s expense, continued life insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon the earlier of (i) twenty-four (24) continue for 18 months from the Date of Termination or (ii) the date unless Executive becomes eligible for Medicare coverage, obtains other employment following termination of employment under which substantially similar benefits are provided further, that if and in which Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue eligible to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessparticipate.
(d) Within thirty (30) days For purposes of Executive’s Section 4, “Event of Termination” as used herein shall mean “Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified EmployeeService” as defined in Code Section 409A409A and the Treasury Regulations promulgated thereunder, provided, however, that the Employer and such earlier payment Executive reasonably anticipate that the level of bona fide services Executive would trigger penalties under Code Section 409A, then such payment shall be made on the first day perform after termination would permanently decrease to a level that is less than 50% of the seventh average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyperiod.
(e) Notwithstanding anything the preceding paragraphs of this Section 4, if the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any total amount of payments permissible under Section 6 280G of the Code or any successor thereto. In the event any change in the Code or regulations thereunder should reduce the amount of payments permissible under Section 280G of the Code in effect on the date of this agreementAgreement, then the Termination Benefits to be paid to Executive shall be determined as if such change in the Code or regulations had not been made. The allocation of the reduction required hereby among Termination Benefits provided by the preceding paragraphs of this Section 4 shall be determined by Executive, provided however that if it is determined that such election by Executive shall be in violation of Code Section 409A, the allocation of the required reduction shall be pro-rata.
Appears in 5 contracts
Samples: Employment Agreement (Northwest Bancshares, Inc.), Employment Agreement (Northwest Bancorp Inc), Employment Agreement (Northwest Bancorp Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) a termination due to “Disability” or death, as set forth in Section 6; or a termination upon “Retirement, Death or Disability, ,” as defined in Section 7 below, or (B) Termination a termination for Cause “Cause,” as defined in Section 8 hereof8; orand
(ii) Executive’s voluntary resignation from within two years after any of the Bank’s employfollowing, uponunless consented to by Executive (where any vote by Executive in performance of his duties as a member of the Board in favor of such action shall constitute express consent of Executive to such action):
(A) a material diminution in relocation of Executive’s base compensationprincipal place of employment to a location that is more than 50 miles from Jacksonville, Florida;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Bank) or;
(C) a requirement material breach of this Agreement by the Employer; provided, however, that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action title or inaction that constitutes duties will not be considered a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses clause (ii) above (A“Good Reason”), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation within two years after the initial occurrence of such condition upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however however, that the Bank shall have be given at least thirty (30) days to cure such remedy the condition and provided that before the Executive actually terminates employment within two years after the initial occurrence of such eventemployment. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement Such voluntary termination for Good Reason by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) an Event of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorTermination.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum in cash equal to three (3) times (i) the Executive’s earned but unpaid highest annual rate of Base Salary paid to Executive at any time under this Agreement and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate annual bonus and non-equity incentive compensation paid to the Executive over the most recent three (3) calendar years prior to the Event of bonus awarded to Executive during the prior two (2) yearsTermination; provided, provided however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingthat, to the extent Executive is a “Specified Employee” required by regulations or interpretations of the Office of Thrift Supervision, all severance payments under the Agreement shall be reduced not to exceed three (3) times Executive’s average annual compensation (as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on regulations or interpretations) over the first day of the seventh month following Executive’s Separation from Servicemost recent five (5) taxable years. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicethe Event of Termination. Notwithstanding the foregoing, in the event Executive is a “Specified Employee” (as defined in the Internal Revenue Code (the “Code”) Section 409A and the regulations thereunder) to the extent required under Code Section 409A, no payment shall be made to Executive prior to the first day of the seventh month following the Event of Termination.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, shall provide at the Bank’s expense, life and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical comparable to the coverage maintained by the Bank for Executive and his family prior to his/her terminationthe Event of Termination, provided, however, except to the extent such medical coverage may be changed in its application to all Bank employees. Such coverage shall cease upon the earlier of (i) twentythirty-four six (2436) months from following the Date Event of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare obtaining substantially similar coverage or obtains healthcare coverage elsewhere, whichever period is lessfrom a new employer.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 5 contracts
Samples: Employment Agreement (Atlantic Coast Financial CORP), Employment Agreement (Atlantic Coast Federal Corp), Employment Agreement (Atlantic Coast Federal Corp)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution in Executive’s base compensationduties or responsibilities, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer), provided, however, that a change in the Executive’s line of reporting that does not result in a material diminution in Executive’s duties or responsibilities will not constitute an Event of Termination;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Employer);
(C) a requirement that Executive must report to a corporate officer liquidation or employee instead dissolution of reporting directly to the President and Chief Executive Officer;Employer; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive’s employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her Executive’s subsequent death, his/her Executive’s beneficiary or beneficiaries, or his/her Executive’s estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid one (1) times Base Salary and benefitsSalary, plus (ii) two one (21) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such amount shall be made payable as salary continuation that will be paid over twelve (12) months commencing on the first 10th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of Executive’s claims against the Employer, and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall not begin before the date Executive has signed (and not revoked) the Release and the Release has become irrevocable under the time period set forth under applicable law. The Release must be executed and become irrevocable by the 60th day following the date of the Event of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Code Section 409A, the payments and benefits described in this Section 4(b) will be paid, or commence, in the second calendar year.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide for twelve (12) months, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Employer’s employees. Notwithstanding the foregoing, howeverif applicable law (including, such medical coverage shall cease upon but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage not permitted under the terms of the applicable health plans, or coverage for herself and a spouseif providing such benefits would subject the Employer to penalties, then the Executive’s family or spouse Employer shall continue pay the Executive a cash lump sum payment reasonably estimated to be covered equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Event of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessforegoing reasons.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything In the event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 5(b) below) and such transaction results in an Event of Termination for the Executive within eighteen (18) months following the effective date of the transaction:
(i) the payment to the contrary hereinExecutive described in Section 4(b), Executive’s resignation for any reason other than those as severance pay or liquidated damages, or both, shall be increased to an amount equal to the sum of two (2) times Base Salary, plus two (2) times the average of the annual incentive compensation paid to Executive during each of the three years immediately prior to the year in which the Event of Termination occurs, payable in accordance with Section 4(b); and
(ii) the Employer shall provide the benefits set forth in clauses 6(a)(ii)(ASection 4(c) for eighteen (18) months (instead of twelve (12) months), (Band such benefits shall otherwise be provided in accordance with Section 4(c), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 5 contracts
Samples: Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of material lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer);
(B) on or after a material diminution Change in Control, as defined in Section 5(b), Executive’s authority duties or responsibilitiesprincipal place of employment is relocated to a location that is more than 100 miles from the location of the Employer’s principal executive offices as determined immediately prior to the date of a Change in Control;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerEmployer);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Employer; or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive’s employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her Executive’s subsequent death, his/her Executive’s beneficiary or beneficiaries, or his/her Executive’s estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid one (1) times Base Salary and benefitsSalary, plus (ii) two one (21) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such amount shall be made payable as salary continuation that will be paid over eighteen (18) months commencing on the first 60th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of Executive’s claims against the Employer, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall begin on the 60th day following the date of the Event of Termination, provided that before that date, Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, provided, however, except to the extent such medical coverage shall cease upon the earlier of may be changed in its application to all Employer’s employees for twelve (i12) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessmonths.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 4 contracts
Samples: Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution in Executive’s base compensationduties, or responsibilities, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer), provided, however, that a change in the Executive’s line of reporting that does not result in a material diminution in Executive’s duties or responsibilities will not constitute an Event of Termination;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Employer);
(C) a requirement that Executive must report to a corporate officer liquidation or employee instead dissolution of reporting directly to the President and Chief Executive Officer;Employer; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive’s employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her Executive’s subsequent death, his/her Executive’s beneficiary or beneficiaries, or his/her Executive’s estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid one (1) times Base Salary and benefitsSalary, plus (ii) two one (21) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such amount shall be made payable as salary continuation that will be paid over twelve (12) months commencing on the first 10th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of Executive’s claims against the Employer, and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall not begin before the date Executive has signed (and not revoked) the Release and the Release has become irrevocable under the time period set forth under applicable law. The Release must be executed and become irrevocable by the 60th day following the date of the Event of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Code Section 409A, the payments and benefits described in this Section 4(b) will be paid, or commence, in the second calendar year.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide for twelve (12) months, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Employer’s employees. Notwithstanding the foregoing, howeverif applicable law (including, such medical coverage shall cease upon but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage not permitted under the terms of the applicable health plans, or coverage for herself and a spouseif providing such benefits would subject the Employer to penalties, then the Executive’s family or spouse Employer shall continue pay the Executive a cash lump sum payment reasonably estimated to be covered equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Event of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessforegoing reasons.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything In the event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 5(b) below) and such transaction results in an Event of Termination for the Executive within eighteen (18) months following the effective date of the transaction:
(i) the payment to the contrary hereinExecutive described in Section 4(b), Executive’s resignation for any reason other than those as severance pay or liquidated damages, or both, shall be increased to an amount equal to the sum of two (2) times Base Salary, plus two (2) times the average of the annual incentive compensation paid to Executive during each of the three years immediately prior to the year in which the Event of Termination occurs, payable in accordance with Section 4(b); and
(ii) the Employer shall provide the benefits set forth in clauses 6(a)(ii)(ASection 4(c) for eighteen (18) months (instead of twelve (12) months), (Band such benefits shall otherwise be provided in accordance with Section 4(c), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 3 contracts
Samples: Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc), Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As Unless Executive agrees otherwise, as used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Company of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death a termination governed by Section 6 of this Agreement; or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponCompany for “Good Reason.” Good Reason shall include any of the following:
(A) a material diminution in Executive’s base compensationthe failure to reappoint Executive as Chief Executive Officer;
(B) a material diminution change in Executive’s authority functions, duties or responsibilitiesresponsibilities with the Company or its affiliates, which change would cause Executive’s position to become one of lesser responsibility, importance or scope from the position and attributes thereof described in Section 1 of this Agreement;
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than thirty-five (35) miles from its location at the President and Chief Executive OfficerEffective Date of this Agreement;
(D) a material diminution reduction in the budget over which benefits and perquisites provided to Executive retains authorityfrom those being provided as of the Effective Date of this Agreement (except for any reduction that is part of an employee-wide reduction in pay or benefits);
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (iiA) (A), (B), (C), (D), (E) or through (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) not less than 30 days prior written notice given within a reasonable period of time (not to exceed ninety (9090 days) days after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Company shall have at least thirty (30) 30 days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject may elect to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorwaive said 30-day period.
(b) Upon the occurrence Executive’s termination of an Event employment in accordance with paragraph (a) of Termination within thirty (30) days after this Section 4, as of the Date of Termination, as defined in Section 9(b)7 of this Agreement, the Bank Company shall be obligated to pay Executive, or, in the event of his/her subsequent deathhis death following the Date of Termination, his/her beneficiary or beneficiarieshis beneficiary(ies), or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to three times: (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (Bii) the highest rate annual bonus, whether paid to or accrued on behalf of bonus awarded to Executive during the prior two three years. In addition, the Executive will be entitled to the value of all employee benefits that would have been provided to Executive over the thirty-six (236) yearsmonth period immediately following the Event of Termination, based on the most recent level of contribution, accrual or other participation by or on behalf of Executive. Such amounts shall be paid to Executive in a single cash lump sum distribution within thirty (30) days following Executive’s Event of Termination; provided, provided however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and if the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee,” as defined in Code Section 409ATreasury Regulation 1.409-1(i), and such earlier payment would trigger then, solely to the extent required to avoid penalties under Code Section 409A409A of the Code, then such payment shall be made on delayed until the first day of the seventh full month following the Executive’s Separation from ServiceDate of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment with the Company.
(c) Upon In addition to the occurrence payments provided for in paragraph (b) of an Event this Section 4, upon Executive’s termination of Terminationemployment in accordance with the provisions of paragraph (a) of this Section 4, to the Bank will cause extent that the Company continues to be continuedoffer any life insurance, at the Bank’s expense, life insurance coverage and non-taxable medical and medical, health, or dental insurance coverageplan or arrangement in which Executive or his dependents participates as of the date of the Event of Termination (each being a “Welfare Plan”), if anyExecutive and his covered dependents shall continue participating in such Welfare Plans, substantially identical subject to the coverage maintained by same premium contributions on the Bank for part of Executive as were required immediately prior to his/her termination, provided, however, such medical coverage shall cease upon the Event of Termination until the earlier of (i) twenty-four his death; (24ii) his employment by another employer other than one of which he is the majority owner; or (iii) for a period of thirty six (36) months from following the Date Event of Termination. If the Company does not offer the Welfare Plans at any time after the Event of Termination or if Executive’s participation in such plans would subject the Bank to excise taxes or penalties under applicable tax laws, then the Company shall provide Executive with a payment equal to the premiums for such benefits for the period which runs until the earlier of (i) his death; (ii) his employment by another employer other than one of which he is the date majority owner; or (iii) for a period of thirty-six months following the Event of Termination, with such amounts payable to Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and in a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within single cash lump sum distribution within thirty (30) days of following Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to or the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), date that the Bank shall pay Executive a lump sum equal is no longer able to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permittedprovide such coverage, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallywhichever is later.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 3 contracts
Samples: Employment Agreement (If Bancorp, Inc.), Employment Agreement (If Bancorp, Inc.), Employment Agreement (If Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death Disability (as defined in Section 7) or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause (as defined in Section 8 hereofbelow), provided that such termination of employment constitutes a “Separation from Service” as defined in Section 6(e) herein; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Executive Vice President and Chief Operating Officer,
(B) a material diminution change in Executive’s authority duties functions, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive, or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FD), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FD) above.
(iii) (A) The termination of Executive’s involuntary termination employment by the Bank (other than Termination for Cause) on the effective date ofCompany, or the Executive’s voluntary resignation from the Company’s employ, at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result during the term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLABHCA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum amount equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company will cause to be continued, at the BankCompany’s expense, sole expense life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executivethe benefits to which he would be entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for a thirty-six (36) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (Investors Bancorp Inc), Employment Agreement (New Investors Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death Disability (as defined in Section 7) or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause (as defined in Section 8 hereofbelow), provided that such termination of employment constitutes a “Separation from Service” as defined in Section 6(e) herein; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;,
(B) material change in Executive’s functions, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FD), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FD) above.
(iii) (A) The termination of Executive’s involuntary termination employment by the Bank (other than Termination for Cause) on the effective date ofCompany, or the Executive’s voluntary resignation from the Company’s employ, at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result during the term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLABHCA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum amount equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company will cause to be continued, at the BankCompany’s expense, sole expense life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executivethe benefits to which he would be entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for a thirty-six (36) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank’s defined benefit pension plan ( and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (Investors Bancorp Inc), Employment Agreement (New Investors Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 2 contracts
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.), Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good Reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her his duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination , other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she Executive had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/her Separation from Service a Change in Control) following his Date of Termination earning his/her his actual final rate of Base Salary as of the Date of Termination and as if she Executive had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 2 contracts
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.), Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (ATermination for Cause) Retirement, Death or Disability, as defined in termination governed by Section 6 (Termination for Disability or death) or termination governed by Section 7 below(Termination Upon Retirement), or (Bprovided that such termination of employment is also a “Separation from Service” within the meaning of Section 4(h) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for any of the following reasons:
(A) a material diminution in relocation of Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead principal place of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is employment by more than twenty-five (25) miles from its location at the location of Executive’s principal workplace on the date Effective Date of this Agreement;
(B) a material reduction in the benefits and perquisites to Executive from those being provided as of the later of the Effective Date or any subsequent Anniversary Date of this Agreement, other than an employee-wide reduction in pay or benefits;
(C) a liquidation or dissolution of the Bank; or
(FD) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), or (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice Notice of Termination, as defined in Section 9(a), given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such the condition and giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 solely by virtue of the fact that Executive has submitted his/her resignation but his resignation, provided Executive has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FD) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeor any successor thereto) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from the employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A4(a)(ii)(A), (B), (C), or (D), (E) or (F) above. For these purposes, a “Change in Control of the Bank or the Company Control” shall mean a change in control of the Bank or the Holding Company of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) ), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), other than the Bank’s employee stock ownership plan or trust, directly or indirectly, of securities of the Holding Company or Bank representing 25% or more of the combined voting power of the Holding Company’s outstanding securities, except for any securities purchased by the or Bank’s employee stock ownership plan or trust; outstanding securities or (b) individuals who constitute the Board of Directors of the Bank, or the Holding Company on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters a majority of the directors comprising of the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Holding Company or similar transaction in which the Bank or Holding Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Companyprovided, by someone other than the current management of the Company is distributedhowever, seeking stockholder approval of a plan of reorganizationthat, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by extent necessary to comply with Code Section 409A, “Change in Control” shall instead have the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company meaning set forth in Code Section 409A and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer regulations and such tendered shares have been accepted by the tender offerorother guidance published thereunder.
(b) Upon the occurrence of an Event of Termination within thirty under Sections 4(a) (30i) days after or (ii), on the Date of Termination, as defined in Section 9(b), the Bank shall be obligated to pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s his earned but unpaid Base Salary and benefits, plus salary as of the date of his termination of employment with the Bank; (ii) two the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees; (2iii) times the sum remaining payments that Executive would have earned, in accordance with Sections 3(a) and 3(b), if he had continued his employment with the Bank for the remainder of the term of this Agreement (Abut in any event, such term shall not exceed twelve (12) Base Salary months), and had earned the maximum bonus or incentive award in each calendar year that ends during such term; and (Biv) the highest rate annual contributions or payments that would have been made on Executive’s behalf to any employee benefit plans of bonus awarded to the Bank as if Executive during had continued his employment with the prior two Bank for the remainder of the term of this Agreement (2but in any event, such term shall not exceed twelve (12) years; providedmonths), however, that such Event based on contributions or payments made (on an annualized basis) at the Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Any payments hereunder shall be made on in a lump sum within thirty (30) days after the first day Date of the seventh month following Executive’s Separation from ServiceTermination, except as otherwise provided herein. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination under Section 4(a)(iii), on the Date of Termination, as defined in Section 9(b), the Bank shall be obligated to pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, an amount equal to the sum of: (i) his earned but unpaid salary as of the date of his termination of employment with the Bank; (ii) the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank or Holding Company’s officers and employees; (iii) the remaining payments that Executive would have earned, in accordance with Sections 3 (a) and (b), if he had continued his employment with the Bank for a twelve (12) month period following his termination of employment, and had earned the maximum bonus or incentive award in each calendar year that ends during such term; and (iv) the annual contributions or payments that would have been made on Executive’s behalf to any employee benefit plans of the Bank or the Company as if Executive had continued his employment with the Bank for a twelve (12) month period following his termination of employment, based on contributions or payments made (on an annualized basis) at the Date of Termination. Any payments hereunder shall be made in a lump sum within thirty (30) days after the Date of Termination, except as otherwise provided herein. Such payments shall not be reduced in the event Executive obtains other employment following termination of employment.
(d) Upon the occurrence of an Event of Termination under Section 4(a)(i), (ii) or (iii), the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical to the coverage maintained by the Bank for Executive and his family prior to his/her Executive’s termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the ExecutiveBank’s family or spouse shall continue to be covered expense for the remainder of the twenty-four (24) month period or, in term of this Agreement following the case Date of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(de) Within thirty Notwithstanding anything in this Agreement to the contrary, in no event shall the aggregate payments or benefits to be made or afforded to Executive under this Section constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended, (30“Code”) days of or any successor thereto, and in order to avoid such a result, Executive’s Separation from Service benefits hereunder shall be reduced, if necessary, to an amount, the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined in connection accordance with Section 280G. The allocation of the reduction required hereby shall be determined by Executive, or in the event such allocation violates Code Section 409A, the reduction required hereby shall be made pro-rata.
(f) In the event the Executive resigns for any reason other than an Event of Termination (providedas described in Section 4), howeverTermination for Just Cause (as described in Section 5), thatTermination for Disability or Death (as described in Section 6) or Termination Upon Retirement (as described in Section 7), all obligations of the Bank hereunder shall immediately cease upon the date of such resignation.
(g) Notwithstanding the foregoing, to the extent required by regulations or interpretations of the Office of Thrift Supervision, all severance payments under the Agreement shall not exceed three (3) times the Executive’s average annual compensation (as defined in such regulations or interpretations) over the most recent five (5) taxable years.
(h) For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (Amb Financial Corp), Employment Agreement (Amb Financial Corp)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As Unless Executive agrees otherwise, as used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in a termination governed by Section 7 below, of this Agreement; or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponBank for “Good Reason.” Good Reason shall include any of the following:
(A) a material diminution in Executive’s base compensationfailure to reappoint Executive as Chief Executive Officer and President;
(B) a material diminution change in Executive’s authority functions, duties or responsibilitiesresponsibilities with the Bank or its affiliates, which change would cause Executive’s position to become one of lesser responsibility, importance or scope from the position and attributes thereof described in Section 1 of this Agreement;
(C) a requirement that Executive must report to a corporate officer or employee instead the relocation of reporting directly to Executive’s principal place of employment by more than thirty-five (35) miles from its location at the President and Chief Executive OfficerEffective Date of this Agreement;
(D) a material diminution reduction in the budget over which benefits and perquisites provided to Executive retains authorityfrom those being provided as of the Effective Date of this Agreement (except for any reduction that is part of an employee-wide reduction in pay or benefits);
(E) a change in the geographic location at which failure of the Company to re-appoint Executive must perform his/her duties that is more to the Board of Directors of the Bank other than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreementfor Just Cause; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (iiA) (A), (B), (C), (D), (E) or through (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) 30 days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said the right to elect; provided, however which termination by Executive shall be an Event of Termination. The Bank shall have 30 days to cure the condition giving rise to the Event of Termination, provided that the Bank shall have at least thirty (may elect to waive said 30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence Executive’s termination of an Event employment in accordance with paragraph (a) of Termination within thirty (30) days after this Section 4, as of the Date of Termination, as defined in Section 9(b)8 of this Agreement, the Bank shall be obligated to pay Executive, or, in the event of his/her subsequent deathhis death following the Date of Termination, his/her beneficiary or beneficiarieshis beneficiary(ies), or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of three times: (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (Bii) the highest rate annual bonus, whether paid to or accrued on behalf of bonus awarded to Executive during the prior two three years. In addition, the Executive will be entitled to the value of all employee benefits that would have been provided to Executive over the thirty-six (236) yearsmonth period immediately following the Event of Termination, based on the most recent level of contribution, accrual or other participation by or on behalf of Executive. Such amounts shall be paid to Executive in a single cash lump sum distribution within thirty (30) days following Executive’s Event of Termination; provided, provided however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and if the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee,” as defined in Code Section 409ATreasury Regulation 1.409-1(i), and such earlier payment would trigger then, solely to the extent required to avoid penalties under Code Section 409A409A of the Code, then such payment shall be made on delayed until the first day of the seventh full month following the Executive’s Separation from ServiceDate of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment with the Bank.
(c) Upon In addition to the occurrence payments provided for in paragraph (b) of an Event this Section 4, upon Executive’s termination of Terminationemployment in accordance with the provisions of paragraph (a) of this Section 4, to the extent that the Bank will cause continues to be continuedoffer any life insurance, at the Bank’s expense, life insurance coverage and non-taxable medical and medical, health, or dental insurance coverageplan or arrangement in which Executive or his dependents participate as of the date of the Event of Termination (each being a “Welfare Plan”), if anyExecutive and his covered dependents shall continue participating in such Welfare Plans, substantially identical subject to the coverage maintained by same premium contributions on the Bank for part of Executive as were required immediately prior to his/her termination, provided, however, such medical coverage shall cease upon the Event of Termination until the earlier of (i) twentyhis death; (ii) his employment by another employer other than one of which he is the majority owner; or (iii) for a period of thirty-four six (2436) months from following the Date Event of Termination. If the Bank does not offer the Welfare Plans at any time after the Event of Termination or if Executive’s participation in such plans would subject the Bank to excise taxes or penalties under applicable tax laws, then the Bank shall provide Executive with a payment equal to the premiums for such benefits for the period which runs until the earlier of (i) his death; (ii) his employment by another employer other than one of which he is the date majority owner; or (iii) for a period of thirty-six months following the Event of Termination, with such amounts payable to Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and in a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within single cash lump sum distribution within thirty (30) days of following Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to or the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), date that the Bank shall pay Executive a lump sum equal is no longer able to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permittedprovide such coverage, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallywhichever is later.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (If Bancorp, Inc.), Employment Agreement (If Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, upon
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two three (23) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two three (23) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twentythirty-four six (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twentythirty-four six (2436) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.), Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank Company of Executive’s full-time employment hereunder for any reason other than (A) a termination due to “Disability” or death, as set forth in Section 6; or a termination upon “Retirement, Death or Disability, ,” as defined in Section 7 below, or (B) Termination a termination for Cause “Cause,” as defined in Section 8 hereof8; orand
(ii) Executive’s voluntary resignation from within two years after any of the Bank’s employfollowing, uponunless consented to by Executive (where any vote by Executive in performance of his duties as a member of the Board in favor of such action shall constitute express consent of Executive to such action):
(A) failure to appoint Executive to the position set forth in Section 1, or a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Bank); provided, however, that (i) a regulatory action which alters Executive’s duties, or (ii) a failure to re-elect Executive to the Board shall not constitute an Event of Termination under this Agreement and any change to Executive’s duties as an officer or director of any affiliate does not constitute an Event of Termination under this Agreement;
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 50 miles from Jacksonville, Florida;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerEmployer) or;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) above (A“Good Reason”), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation within ninety (90) days after the initial occurrence of such condition upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety sixty (9060) days days) after the initial event giving rise to said the right to elect; provided, however however, that the Bank Employer shall have be given at least thirty (30) days to cure such remedy the condition and provided that before the Executive actually terminates employment within two years after the initial occurrence of such eventemployment. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement Such voluntary termination for Good Reason by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) an Event of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorTermination.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum in cash (net of applicable taxes) equal to three (3) times (i) the Executive’s earned but unpaid highest annual rate of Base Salary paid to Executive at any time under this Agreement and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate annual bonus and non-equity incentive compensation paid to the Executive over the most recent three (3) calendar years prior to the Event of bonus awarded to Executive during the prior two (2) yearsTermination; provided, provided however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingthat, to the extent Executive is a “Specified Employee” required by regulations or interpretations of the Office of Thrift Supervision, all severance payments under the Agreement shall be reduced not to exceed three (3) times Executive’s average annual compensation (as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on regulations or interpretations) over the first day of the seventh month following Executive’s Separation from Servicemost recent five (5) taxable years. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicethe Event of Termination. Notwithstanding the foregoing, in the event Executive is a “Specified Employee” (as defined in the Internal Revenue Code (the “Code”) Section 409A and the regulations thereunder) to the extent required under Code Section 409A, no payment shall be made to Executive prior to the first day of the seventh month following the Event of Termination.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, Employer shall provide at the BankEmployer’s expense, life and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical comparable to the coverage maintained by the Bank Employer for Executive and his family prior to his/her terminationthe Event of Termination, provided, however, except to the extent such medical coverage may be changed in its application to all of the Employer’s employees. Such coverage shall cease upon the earlier of (i) twentythirty-four six (2436) months from following the Date Event of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family obtaining substantially similar coverage (whether or spouse shall continue to be covered for the remainder of the twenty-four (24not elected) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessfrom a new employer.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Employment Agreement (Atlantic Coast Financial CORP), Employment Agreement (Atlantic Coast Financial CORP)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder hereunder, for any reason other than (A) reason, including a termination following a Change in Control, but not including a termination for Cause, a termination upon Retirement, Death or a termination for Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason,” including resignation for Good Reason following a Change in Control. Good Reason shall mean any of the following:
(A) a material diminution in failure to elect or reelect or to appoint or reappoint Executive to the Executive Position, unless consented to by Executive’s base compensation;
(B) a substantial adverse and material diminution change in Executive’s authority duties function, duties, or responsibilities;
(C) a requirement material reduction to Base Salary or benefits of Executive from that Executive must report to a corporate officer being provided as of the effective date of this Agreement (except for any reduction that is part of an employee-wide reduction in pay or employee instead of reporting directly to the President and Chief Executive Officerbenefits);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authorityBank;
(E) a change in the geographic location at which Executive must perform his/her duties that is relocation of Executive’s principal place of employment more than twenty-five (25) miles from the location of Executive’s principal workplace office on the date Effective Date;
(F) a material breach of this AgreementAgreement by the Bank; or
(FG) any other action the failure of the Board to renew this Agreement or inaction that constitutes provide a material breach similar employment agreement at the end of the current term by issuing a Non-Renewal Notice to Executive no later than sixty days before the Bank end of this Agreementthe term, in accordance with the provisions of Section 2(a) hereof. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or through (F), ) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed exceed, except in case of a continuing breach, ninety (90) days days) after the initial event giving rise to said right to elect; provided, however that the which termination by Executive shall be an Event of Termination. The Bank shall have at least thirty (30) days to cure remedy any condition set forth in clauses (ii) (A) through (F); provided, however, that the Bank shall be entitled to waive such condition period and provided that make an immediate payment hereunder. No payment or benefit shall be due to Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and upon the occurrence of an Event of Termination, except as provided in this Section 6 by virtue of 4. Upon the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses clause (A), ii) (B), (C), (D), (E) or (FG) above.
, the Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon written notice issued to the Bank no more than fifteen (iii15) (A) days after receipt of the Non-Renewal Notice. Upon receipt of the Executive’s involuntary notice of termination by due to this Event of Termination, the Bank shall have thirty (other 30) days to cure the Event of Termination by reversing its decision and notifying the Executive that it will renew the Agreement. No later than Termination for Causethe end of the thirty (30) on the effective date ofday cure period, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature thateither: (i) would be required to be reported in response to Item 5.01 of notify the current report on Form 8-K, as in effect on Executive that it has reversed its decision and will renew the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); Agreement or (ii) results in provide the Executive with the written release of claims required under Section 4(i), to be signed by the Executive as a Change in Control condition to the receipt of severance benefits hereunder. Notwithstanding the foregoing, the following will not constitute an Event of Termination under clause (ii)(G) above: (i) the failure of the Bank or to renew the Company within Agreement upon the meaning Executive’s attainment of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder retirement age set forth in Section 7 (collectively, or agreed to in writing by the “HOLA”Executive); (ii) as in effect at the time renewal of the Change Agreement for a shorter period due to the Executive’s attainment of the retirement age set forth in ControlSection 7 during the next three-year term; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute offer to renew the Board Agreement on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided terms that any person becoming a director subsequent may be different but similar to the date hereof whose election was approved by a vote terms of at least three-quarters of this Agreement provided that, for these purposes, the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by renewal employment agreement will be considered “similar” if it requires the same Nominating Committee serving under an Incumbent Board, shall be, for purposes multiple of this clause (b), considered as though he or she were a member Base Salary and bonus payment upon the same Events of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorTermination.
(b) Upon the occurrence of an Event of Termination within thirty (30and subject to Section 4(i) days after the Date of Termination, as defined in Section 9(b)hereof, the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum cash amount equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times (three (3) times if the sum Event of (A) Base Salary and (BTermination follows a Change in Control) the highest annual rate of bonus awarded Base Salary paid to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties at any time under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicethis Agreement.
(c) Upon the occurrence of an Event of TerminationTermination and subject to Section 4(i) hereof, the Bank shall pay Executive a cash amount equal to two (2) times (three (3) times if the Event of Termination follows a Change in Control) the Executive’s tax-adjusted payment as provided for in Section 3(d), to be used to maintain the life insurance policy owned by Executive, as set forth in Section 3(d) hereof.
(d) Upon the occurrence of an Event of Termination and subject to Section 4(i) hereof, the Bank will cause to be continuedprovide, at the Bank’s expense, life insurance coverage (including the life insurance provided under the endorsement split dollar life insurance agreement between Executive and Bank) and non-taxable medical and dental insurance coveragecoverage substantially comparable, if anyas reasonably or customarily available, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Bank employees. Such coverage shall cease upon the earlier of (i) twenty-four (24) months from following the Date Event of Termination (thirty-six months if the Event of Termination follows a Change in Control). The period of continued health care coverage required by Code Section 4980B(f) shall run concurrently with the coverage period provided herein. If the Bank cannot provide one or (ii) more of the date Executive becomes eligible for Medicare coverage, provided further, that if benefits set forth in this paragraph because Executive is covered by family coverage no longer an employee, applicable rules and regulations prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Executive’s family or spouse Bank shall continue pay the Executive a cash lump sum payment reasonably estimated to be covered for equal to the remainder value of such benefits or the value of the twenty-four (24) month period or, remaining benefits at the time of such determination. Such cash lump sum payment shall be made in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within a lump sum within thirty (30) days after the later of the Executive’s Separation from Service in connection with an Event date of Termination termination (“Date of Termination”) of employment or the effective date of the rules or regulations prohibiting such benefits or subjecting the Bank to penalties, provided, however, thatin the event Executive is a Specified Employee (with the meaning of Treasury Regulation Section 1.409A-1(i)), and to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger necessary to avoid penalties under Code Section 409A, then such no payment shall be made on to Executive prior to the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyTermination.
(e) Subject to Section 4(i) hereof, the payments under Sections 4(b) and 4(c) shall be payable in a single cash lump-sum distribution within thirty (30) days following the occurrence of an Event of Termination.
(f) Upon the occurrence of an Event of Termination and subject to Section 4(i) hereof, the Executive will fully vest in all non-vested stock options and/or restricted stock that have been granted to him, and in the case of stock options, such options shall be immediately exercisable.
(g) For purposes of this Section 4, Date of Termination shall mean the date of “Separation from Service” as defined in Code Section 409A and the Treasury Regulations promulgated thereunder; provided, however, that the Bank and Executive reasonably anticipate that the level of bona fide services Executive would perform after termination would permanently decrease to a level that is less than 50% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period.
(h) Notwithstanding anything the preceding paragraphs of this Section 4, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary hereintotal amount of payments permissible under Section 280G of the Code or any successor thereto. In the event a reduction is necessary, Executive’s resignation Executive shall be entitled to determine which benefits or payments shall be reduced or eliminated so the total parachute payments do not result in an excess parachute payment. If Executive does not make this determination within ten business days after receiving a written request from the Bank, the Bank may make such determination, and shall notify Executive promptly thereof. In the event it is determined that permitting Executive or the Bank to make the determination regarding the form or manner of reduction would violate Code Section 409A, such reduction shall be made pro rata.
(i) Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until Executive executes a release of his claims against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act (“ADEA”), but not including claims for any reason benefits under tax-qualified plans or other than those benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 this Agreement that survive the termination of this agreementAgreement. In order to comply with the requirements of Code Section 409A and the ADEA, the release shall be provided to Executive no later than the date of his Separation from Service and Executive shall have no fewer than twenty-one (21) days to consider the release, and following Executive’s execution of the release, Executive shall have seven (7) days to revoke said release.
Appears in 2 contracts
Samples: Employment Agreement (Georgetown Bancorp, Inc.), Employment Agreement (Georgetown Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 2 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 3 hereof), Section 3 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 3 (Ain connection with or following a Change in Control) Retirementor Section 4 (for Cause), Death or Disability, as defined in provided that such termination constitutes a “Separation from Service” within the meaning of Section 7 below, or 409A of the Internal Revenue Code (B) Termination for Cause as defined in Section 8 hereof“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution in Executive’s base compensationduties or responsibilities, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer), provided, however, that a change in the Executive’s line of reporting that does not result in a material diminution in Executive’s duties or responsibilities will not constitute an Event of Termination;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including the annual rate of base salary paid to Executive by the Bank (“Base Salary”), to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Employer);
(C) a requirement that Executive must report to a corporate officer liquidation or employee instead dissolution of reporting directly to the President and Chief Executive Officer;Employer; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive’s employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that which termination by Executive shall be an Event of Termination and the Bank Executive’s right to severance is subject to the terms and conditions of Sections 2(b), 2(c) and 3 of this Agreement. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon In the occurrence of event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 3(b) below) and such transaction results in an Event of Termination for the Executive within thirty eighteen (3018) days after months following the Date effective date of Termination, as defined in Section 9(b)the transaction, the Bank Employer shall pay Executive, or, in the event of his/her Executive’s subsequent death, his/her Executive’s beneficiary or beneficiaries, or his/her Executive’s estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid two (2) times Base Salary and benefitsSalary, plus (ii) two (2) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior to the year in which the Event of Termination occurs. Such amount shall be payable as salary continuation that will be paid over twelve (12) months commencing on the 10th day following Executive’s Separation from Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 2 unless and until (i) Executive executes a release (the “Release”) of Executive’s claims against the Employer, and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall not begin before the date Executive has signed (and not revoked) the Release and the Release has become irrevocable under the time period set forth under applicable law. The Release must be executed and become irrevocable by the 60th day following the date of the Event of Termination, provided that if the 60-day period spans two (2) calendar years; provided, howeverthen, to the extent necessary to comply with Code Section 409A, the payments and benefits described in this Section 2(b) will be paid, or commence, in the second calendar year.
(c) In the event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 3(b) below) and such transaction results in an Event of Termination must qualify for the Executive within eighteen (18) months following the effective date of the transaction, the Employer shall provide for eighteen (18) months, at the Employer’s expense, nontaxable medical health, vision and dental coverage substantially comparable, as reasonably available, to the coverage maintained by the Employer for Executive prior to the Event of Termination, except to the extent such coverage may be changed in its application to all Employer’s employees. Notwithstanding the foregoing, if applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Employer to penalties, then the Employer shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Event of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the foregoing reasons.
(d) For purposes of this Agreement, a “Separation from Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (whether as defined an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in Internal Revenue Code the twelve (“Code”12) months immediately preceding the Event of Termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 409A and the regulations thereunder1.409A-1(h)(ii). Notwithstanding the foregoing, to the extent If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 2 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 2 contracts
Samples: Change in Control Separation Agreement (First Interstate Bancsystem Inc), Change in Control Separation Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:, as set forth in Section 4(a)(i), (ii) or (iii):
(i) the involuntary termination by the Bank Employer of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 below, or (B) a Termination for Cause as defined in Section 8 hereofor a termination for Disability; orand
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following (which shall be treated as termination of employment for “Good Reason”), uponunless consented to by Executive:
(A) prior to a material diminution Change in Executive’s base compensation;Control, failure to appoint or re-appoint Executive to the level of Executive Vice President
(B) on or after a Change in Control, failure to appoint or re-appoint Executive to the title and position that the Executive held immediately prior to a Change in Control, or a material diminution change in Executive’s authority duties function, duties, or responsibilitiesresponsibilities as compared to the Executive’s function, duties, or responsibilities immediately prior to a Change in Control, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement);
(C) a requirement that Executive must report relocation of Executive’s principal place of employment to a corporate officer or employee instead location that is more than 50 miles from the location of reporting directly to the President and Chief Executive OfficerEmployer’s principal executive offices as of the date of this Agreement;
(D) on or after a material diminution Change in Control, a reduction in Base Salary as compared to the budget over which Executive retains authorityExecutive’s Base Salary immediately prior to a Change in Control;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties Bank or the Company other than liquidations or dissolutions that is more than twenty-five (25) miles from are caused by reorganizations that do not affect the location status of the Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) 30 days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the remedy any event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described set forth in clauses (A), (B), (C), (D), (Eii)(A) or through (F) above; provided, however, that the Employer shall be entitled to waive such period and make an immediate payment hereunder. If the Employer remedies the event within such 30 day cure period, then no Good Reason shall be deemed to exist with respect to such event. If the Employer does not remedy the event within such 30 days cure period, then the Executive may deliver a Notice of Termination for Good Reason at any time within 60 days following the expiration of such cure period.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) Within 24 months following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange ActSection 5 below), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of CompanyExecutive’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank employment is involuntarily terminated without Cause or the Company Executive voluntarily resigns for Good Reason. No payments or similar transaction benefits shall be due to Executive under this Agreement upon the termination of Executive’s employment except as provided in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorthis Section 4.
(b) Upon Within 30 days following the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount equal to three times the sum of (i) the Executive’s earned but unpaid highest annual rate of Base Salary and benefitspaid to Executive at any time under the Agreement, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded paid to Executive during with respect to the three completed fiscal years prior two (2) years; provided, however, that such to the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from ServiceTermination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Within 30 days following the occurrence of an Event of Termination, the Employer shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum equal to the excess, if any, of the present value of the benefit that Executive would have been entitled to under the Employer’s defined benefit pension plan if Executive had continued working for the Employer for 36 months after the effective date of such Event of Termination, over the present value of the benefits to which Executive was actually entitled as of the effective date of such Event of Termination.
(d) Upon the occurrence of an Event of Termination, the Bank Employer will cause to be continued, provide at the BankEmployer’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coveragevision coverage substantially comparable, if anyas reasonably or customarily available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Employer employees. Such coverage shall cease upon 36 months following the earlier Event of (i) twenty-four (24) months from Termination. If the Date Bank cannot provide one or more of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if benefits set forth in this paragraph because Executive is covered by family coverage no longer an employee, and applicable rules and regulations (including, but not limited to the Affordable Care Act) prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination. Such cash payment shall be made in a lump sum within 30 days after the later of Executive’s family date of termination or spouse shall continue to be covered for the remainder effective date of the twenty-four rules or regulations prohibiting such benefits or subjecting the Bank to penalties.
(24e) month period orNotwithstanding the foregoing, in the case of event the spouseExecutive is a Specified Employee (as defined herein), until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, solely to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger necessary to avoid penalties under Code Section 409A, then such payment to the Executive’s benefit pursuant to Sections 4(b), 4(c) and 4(d), if applicable, shall be made to the Executive on the first day of the seventh month following the Executive’s Separation from ServiceEvent of Termination. “Specified Employee” shall be interpreted to comply with Code Section 409A and shall mean a key employee within the meaning of Code Section 416(i) (without regard to paragraph 5 thereof), but an individual shall be a “Specified Employee” only if the Company or the Bank shall pay Executive or any affiliate is a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallypublicly traded company.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good Reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25fifty ( 50 ) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Section 6(e) hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President and Loan Servicing Manager,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical . Such coverage shall cease upon the earlier of (i) continue for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, howeveron the Date of Termination, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service9(b), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s (i) 401(k) Plan Plan, (ii) money purchase pension plan, and Employee Stock Ownership Plan (iii) employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesBank) as if she Executive had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding anything For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in Code Section 409A and any payment to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), be made under subparagraph (B), (C), (D),(Eb) or (Fd) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall not entitle be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to any payments include an “excess parachute payment” under Section 6 280G of this agreementthe Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or any successor thereto.
Appears in 1 contract
Samples: Employment Agreement (Brooklyn Federal Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company of Executive’s full-time employment hereunder for any reason other than (Atermination governed by Section 5(a) Retirementhereof, Death or Disabilityfor Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
or (ii) Executive’s voluntary resignation from the BankHolding Company’s employ, upon
employ for “Good Reason,” which shall mean without Executive’s consent (A) a material diminution in reduction of Executive’s base compensation;
authority, duties or responsibilities with respect to the Holding Company or its Subsidiaries, including the failure to elect or reelect or to appoint or reappoint Executive as President and Chief Operating Officer; (B) a material diminution in reduction of Executive’s authority duties salary; or responsibilities;
(C) a requirement that material change the geographic location at which the Executive must report to a corporate officer or employee instead of reporting directly perform his services to the President and Chief Executive Officer;
Holding Company; (D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
or (FE) any other action or inaction that constitutes if, by July 31, 2014, the Company has not extended this Agreement to a material breach by the Bank of this Agreementterm ending no earlier than July 31, 2015. Upon the occurrence of any event described in clauses (iiA) (A), (B), (C), (D), through (E) or (F), above, above constituting “Good Reason,” Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period six months after initial existence of time not to exceed ninety (90) days after the initial event giving rise to said right to electresign; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years 30 days after the initial occurrence existence of the basis for resignation Executive has provided the Holding Company written notice of the circumstances providing the basis for resigning on account of “Good Reason” and the Holding Company has failed to remedy such eventcircumstances within 30 days after receiving such notice. Notwithstanding A resignation by Executive without complying with the preceding sentence, notice and opportunity to remedy provisions in the event of this Agreement shall not constitute a continuing breach resignation for “Good Reason” for any purpose of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorAgreement.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b)8, the Bank Holding Company shall be obligated to pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the greater of: (i) the amount of the remaining payments that the Executive would have earned if he had continued his employment with the Bank during the remaining term of this Agreement at the Executive’s earned but unpaid Base Salary and benefits, plus at the Date of Termination; or (ii) two (2) times the sum of (A) Executive’s annual Base Salary and (B) at the highest rate Date of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such Such payment shall be made on the first day in a lump sum within five business days of the seventh month following Executive’s Separation from ServiceDate of Termination, subject to delayed payment pursuant to Section 22 hereof, if applicable. Such payment shall not be reduced in the event the Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank Holding Company will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical equivalent to the coverage maintained by the Bank Holding Company or its Subsidiaries for Executive prior to his/her termination, provided, however, such medical his termination at no premium cost to the Executive. Such coverage shall cease upon the earlier later of (i) twenty-four (24) months from the Date expiration of Termination the remaining term of this Agreement or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is end of the month of the first anniversary of the Executive’s Date of Termination. If the provision of any of the benefits covered by family coverage or coverage for herself this Section 4(c) would trigger the 20% excise tax and a spouseinterest penalties under Section 409A of the Code, then the Executive’s family or spouse benefit(s) that would trigger such tax and interest penalties shall continue to not be covered for provided (collectively the remainder “Excluded Benefits”), and in lieu of the twenty-four (24) month period orExcluded Benefits the Holding Company will pay to the Executive, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum within thirty business days following termination of employment or thirty business days after such determination, should it occur after termination of employment, a cash amount equal to the present value cost to the Holding Company of providing the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permittedExcluded Benefits. Such lump sum payment will be subject to delayed payment pursuant to Section 22 hereof, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyapplicable.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 7(b) below, or Retirement, as defined in Section 7(a) below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for Good Reason. Good Reason shall mean any of the following events:
(A) a material diminution in Executive’s base compensationfailure to elect or reelect or to appoint or reappoint Executive as Executive Vice President and Chief Financial Officer;
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive OfficerExecutive;
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s Base Salary or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to remedy any event set forth in clauses (ii)(A) through (E) above; provided, however, that the Bank shall be entitled to waive such period and made an immediate payment hereunder. If the Bank remedies the event within such thirty (30) day cure period, then no Good Reason shall be deemed to exist with respect to such condition and provided that event. If the Bank does not remedy the event within such thirty (30) day cure period, then Executive actually terminates employment may deliver a Notice of Termination, as defined in Section 9(a) below, for Good Reason at any time within two years after sixty(60) days following the initial occurrence expiration of such eventcure period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum, within thirty (230) yearsdays after the Date of Termination; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent if Executive is a “Specified Employee,” as defined in Code Section 409ATreasury Regulation 1.409A-1(i), and such earlier payment would trigger then, solely to the extent required to avoid penalties under Code Section 409A, then such payment shall be made on delayed until the first day of the seventh month following the Executive’s Separation from ServiceDate of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, continued life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) Bank’s expense for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under this Section (30the “Termination Benefits”) days would be deemed to include an “excess parachute payment” under Section 280G of Executive’s the Code or any successor thereto, then the cash severance payable under this Section 6 shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Bank under Section 6 being non-deductible pursuant to Code Section 280G and subject to excise tax imposed under Code Section 4999.
(e) For purposes of Section 6, “Event of Termination” as used herein shall mean “Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified EmployeeService” as defined in Code Section 409A409A and the regulations promulgated thereunder, such that the Bank and such earlier payment Executive reasonably anticipate that the level of bona fide services Executive would trigger penalties under Code Section 409A, then such payment shall be made on the first day perform after termination would permanently decrease to a level that is less than 50% of the seventh average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyperiod.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Section 6(e) hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Vice President and Chief Financial Officer,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon the earlier of (i) continue for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, howeveron the Date of Termination, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service9(b), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s (i) 401(k) Plan Plan, (ii) money purchase pension plan, and Employee Stock Ownership Plan (iii) employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesBank) as if she Executive had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service his termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding anything For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in Code Section 409A and any payment to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), be made under subparagraph (B), (C), (D),(Eb) or (Fd) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall not entitle be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to any payments include an “excess parachute payment” under Section 6 280G of this agreementthe Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or any successor thereto.
Appears in 1 contract
Samples: Employment Agreement (Brooklyn Federal Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 9 and 17.
(a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the BankCompany’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as President and Chief Executive Officer of the Bank and/or the Company,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above,
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than 30 miles from its location at the President and Chief Executive Officer;effective date of this Agreement,
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), ) or (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety four (904) days calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) Company or voluntary resignation from the Company’s employ on the effective date of, or at any time following, a Change in ControlControl during the term of this Agreement, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) aboveincluding extensions thereof. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall bebe considered, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedcorporation occurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the then current management Board of Directors of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of common stock of the class of securities then subject to the plan Company are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b)) or, if different, within the time frame set forth in any sub-paragraph below, the Bank Company shall pay Executivepay, provide or credit to Executive (or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, ):
(i) his earned but unpaid salary as of the date of termination of employment with the Company and the benefits to which he would be entitled as of the date of termination as a former employee under the Company’s or the Bank’s employee benefit plans and programs and compensation plans and programs;
(ii) as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (A) the highest annual rate of Base Salary and (B) the highest rate of annual bonus awarded to Executive during the prior two (2) three years; provided. At the election of Executive, howeverwhich election is to be made on an annual basis during the month of January, that such and which election is irrevocable for the year in which made and upon the occurrence of an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingTermination, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment any payments shall be made on in a lump sum, or paid bi-weekly during the first day remaining term of the seventh month this Agreement following Executive’s Separation from Servicetermination. In the event that no election is made, payment to Executive will be made in a lump sum within sixty (60) days of the termination of employment. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Service.termination of employment;
(ciii) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the BankCompany’s expense, continued medical, dental and life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company or the Bank for Executive prior to his/her terminationhis termination of employment. Such medical and dental coverage shall continue for the lifetime of each of Executive and his spouse as provided in Section 3(c) hereof, provided, however, and such medical life insurance coverage shall cease upon the earlier of thirty-six (i) twenty-four (2436) months from following the Date Event of Termination Termination;
(iv) any outstanding unvested stock options or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder shares of restricted stock of the twenty-four (24) month period orCompany that have been awarded to him, in the case which shall become fully vested as of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.his termination of employment;
(dv) Within thirty within sixty (3060) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, or within such shorter period to the extent Executive is a “Specified Employee” as defined in Code Section 409Athat information can be reasonably be obtained) following his termination of employment with the Company, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Company and/or the Bank’s contributions that would have been made on his/her Executive’s behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesor the Company) as if she he had continued working for the Company and the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service his termination earning his/her actual final the Base Salary that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the annual Base Salary increases at the rate of Base Salary as six percent (6%) per year on each Anniversary Date over the remaining unexpired term of the Date of Termination Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate of six percent (6%);
(vi) within sixty (60) days (or within such shorter period to the extent that information can reasonably be obtained) following his termination of employment with the Company and/or the Bank, a lump sum payment in an amount equal to the short-term Internal Revenue Service’s “applicable federal rate” excess, if any, of (A) the present value of the benefits to which he would be entitled under the Supplemental Executive Retirement Plan (and any other deferred compensation plan for management or highly compensated employees that are maintained by the Bank and/or the Company), if he had continued working for the Company and the Bank for the thirty-six (36) month before period following his termination at the Base Salary and bonus that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that annual Base Salary and bonus each increase at the rate of six percent (6%) per year on each Anniversary Date for the remaining unexpired term of the Agreement) over (B) the present value of the benefits to which he is actually entitled under any such plan, as of the date of his termination with the Separation from ServiceCompany and/or the Bank, compounded annually.
where the present values are to be determined using a discount rate of six percent (e6%) Notwithstanding anything to and the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments mortality tables prescribed under Section 6 72 of this agreementthe Code.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s 's full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s employ, upon's employ upon any:
(A) a material diminution in Executive’s base compensationfailure to elect or reelect or to appoint or reappoint Executive as Executive Vice President and Chief Financial Officer;
(B) a material diminution change in Executive’s authority duties 's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive OfficerExecutive;
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is Executive's annual compensation or benefits or relocation of Executive's principal place of employment by more than twenty-five (25) 25 miles from the its location as of Executive’s principal workplace on the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety four (904) days calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s 's involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s 's resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank's (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive's resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s 's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided PROVIDED that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company's mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Executive's Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum, within thirty (230) years; provideddays after the Date of Termination, however, that such Event or in the event Section 409A of Termination must qualify as a “Separation from Service” as defined in the Internal Revenue Code (“the "Code”") Section 409A and the regulations thereunder. Notwithstanding the foregoingapplies, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on no later than the first day of the seventh month following Executive’s Separation from Servicethe Date of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) Bank's expense for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (30the "Termination Benefits") days would be deemed to include an "excess parachute payment" under Section 280G of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409Aor any successor thereto, then such payment shall Termination Benefits will be made on reduced to an amount (the first day of the seventh month following Executive’s Separation from Service"Non-Triggering Amount"), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;,
(B) material change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A6(1)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such . Upon the occurrence of an Event of Termination must qualify as followed by Executive’s termination of employment hereunder, the payments required by this Section 6(b)(ii) shall be made in a “Separation from Service” as defined in lump sum within thirty (30) days (or if Section 409A of the Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingapplies, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Servicetermination of employment). Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days of Executive’s Separation from Service termination of employment in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in or if Code Section 409A409A applies, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Servicetermination of employment), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she he had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service his termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding anything the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any total amount of payments permissible under Section 6 280G of this agreementthe Code or any successor thereto.
Appears in 1 contract
Samples: Employment Agreement (United Financial Bancorp Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (ATermination for Cause) Retirement, Death or Disability, as defined in termination governed by Section 6 (Termination for Disability or death) or termination governed by Section 7 below, or (B) Termination for Cause as defined in Section 8 hereofUpon Retirement); or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for any of the following reasons:
(A) a material diminution in Executive’s base compensationthe failure to appoint or reappoint Executive to the position set forth under Section 1;
(B) a material diminution change in Executive’s authority duties functions, duties, or responsibilitiesresponsibilities with the Bank, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than forty-five (45) miles from its location at the President and Chief Executive OfficerEffective Date of this Agreement;
(D) a material diminution reduction in the budget over which benefits and perquisites to Executive retains authorityfrom those being provided as of the later of the Effective Date or any subsequent Anniversary Date of this Agreement, other than an employee-wide reduction in pay or benefits;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this AgreementBank; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice Notice of Termination, as defined in Section 9(a), given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 solely by virtue of the fact that Executive has submitted his/her resignation but his resignation, provided Executive has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeor any successor thereto) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from the employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A4(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Ben Franklin Financial, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Institution of Executive’s 's full-time employment hereunder for any reason other than (A) than, Retirement, Death as defined in Section 6 hereof, or DisabilityTermination for Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s Institution's employ, upon
upon any (A) a material diminution in Executive’s base compensation;
notice to Executive by the Institution of non-renewal of the term of this Agreement, (B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
, or failure to nominate or reelect Executive to the Board of Directors of the Institution unless Executive consents to any such event, (C) a material change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above, (and any such material change shall be deemed a continuing breach of this Agreement), (D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is relocation of Executive's principal place of employment by more than twenty-five (25) miles from its location at the location of Executive’s principal workplace on the effective date of this Agreement; or
, or a material reduction in the benefits and perquisites available to Executive to which Executive does not consent or for which Executive is not or will not be provided the economic benefit pursuant to Section 3(b) hereof, (E) liquidation or dissolution of the Institution or the Holding Company, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementInstitution. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon not less than sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days exceed, except in case of a continuing breach, four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank Company of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, Disability (as defined in Section 7 below7) or Retirement (as defined in Section 7), or (B) Termination termination for Cause (as defined in Section 8 hereof8), provided that such termination of employment constitutes a “Separation from Service” as defined below; or
(ii) Executive’s voluntary resignation from the Bank’s employCompany, uponupon any
(A) failure to elect or re-elect or to appoint or re-appoint Executive as a material diminution in Executive’s base compensation;senior executive officer of the Company,
(B) a material diminution in liquidation or dissolution of the Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), or (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Company may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), or (C), (D), (E) or (F) above.
(iii) (A) The termination of Executive’s involuntary termination employment by the Bank (other than Termination for Cause) on the effective date ofCompany, or the Executive’s voluntary resignation from the Company’s employ, at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result during the term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (ba), considered as though he or she were a member of the Incumbent Board; Board or (cb) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; implemented or (dc) Executive is not elected to serve as a proxy statement soliciting proxies from stockholders director of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) .. Upon the occurrence of an Event of Termination within thirty described in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), no later than 30 days after such Event of Termination, the Bank Company shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum amount equal to (i) two years of the Executive’s earned but unpaid Base Salary and benefitsSalary, plus (ii) two (2) times the sum amount of (A) Base Salary and (B) his most recent Bonus earned by Executive, such that the highest rate payments are intended to be exempt from Section 409A of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code of 1986, as amended, (the “Code”) Section 409A under the “short term deferral rule.” Also upon the occurrence of an Event of Termination, all shares and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day restricted shares of the seventh month following ExecutiveCompany and options for the Company’s Separation from Service. Such payment shares held by Executive which have been granted but are unvested pursuant to this Agreement or any prior agreement shall not be reduced in the event Executive obtains other employment following Separation from Serviceimmediately vest.
(cb) Upon the occurrence of an Event of Termination, the Bank Company will cause to be continued, at the BankCompany’s expense, sole expense life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank Company for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination Termination. If the Company cannot provide one or (ii) more of the date Executive becomes eligible for Medicare coverage, provided further, that if benefits set forth in this paragraph because Executive is covered by family coverage no longer an employee, applicable rules and regulations (including, but not limited to the Affordable Care Act) prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Company to penalties, then the Executive’s family or spouse Company shall continue pay Executive a cash lump sum payment reasonably estimated to be covered for equal to the remainder value of such benefits or the value of the twenty-four (24) month period or, remaining benefits at the time of such determination. Such cash payment shall be made in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within a lump sum within thirty (30) days after the later of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made or the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the effective date of the Separation from Service, compounded annuallyrules or regulations prohibiting such benefits or subjecting the Company to penalties.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Section 6(e) hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as President and Chief Operating Officer,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, howeveron the Date of Termination, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service9(b), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s (i) 401(k) Plan Plan, (ii) money purchase pension plan, and Employee Stock Ownership Plan (iii) employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesBank) as if she Executive had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service his termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding anything For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in Code Section 409A and any payment to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), be made under subparagraph (B), (C), (D),(Eb) or (Fd) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall not entitle be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to any payments include an “excess parachute payment” under Section 6 280G of this agreementthe Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or any successor thereto.
Appears in 1 contract
Samples: Employment Agreement (Brooklyn Federal Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:, as set forth in Section 4(a)(i), (ii) or (iii):
(i) the involuntary termination by the Bank Employer of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 below, or (B) a Termination for Cause as defined in Section 8 hereofor a termination for Disability; orand
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following (which shall be treated as termination of employment for “Good Reason”), uponunless consented to by Executive:
(A) prior to a material diminution Change in Executive’s base compensationControl, failure to appoint or re-appoint Executive to the level of Executive Vice President;
(B) on or after a Change in Control, failure to appoint or re-appoint Executive to the title and position that the Executive held immediately prior to a Change in Control, or a material diminution change in Executive’s authority function, duties, or responsibilities as compared to the Executive’s function, duties or responsibilitiesresponsibilities immediately prior to a Change in Control, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement);
(C) a requirement that Executive must report relocation of Executive’s principal place of employment to a corporate officer or employee instead location that is more than 50 miles from the location of reporting directly to the President and Chief Executive OfficerEmployer’s principal executive offices as of the date of this Agreement;
(D) on or after a material diminution Change in Control, a reduction in Base Salary as compared to the budget over which Executive retains authorityExecutive’s Base Salary immediately prior to a Change in Control;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties Bank or the Company other than liquidations or dissolutions that is more than twenty-five (25) miles from are caused by reorganizations that do not affect the location status of the Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) 30 days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the remedy any event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described set forth in clauses (A), (B), (C), (D), (Eii)(A) or through (F) above; provided, however, that the Employer shall be entitled to waive such period and make an immediate payment hereunder. If the Employer remedies the event within such 30 day cure period, then no Good Reason shall be deemed to exist with respect to such event. If the Employer does not remedy the event within such 30 days cure period, then the Executive may deliver a Notice of Termination for Good Reason at any time within 60 days following the expiration of such cure period.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) Within 24 months following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange ActSection 5 below), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of CompanyExecutive’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank employment is involuntarily terminated without Cause or the Company Executive voluntarily resigns for Good Reason. No payments or similar transaction benefits shall be due to Executive under this Agreement upon the termination of Executive’s employment except as provided in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorthis Section 4.
(b) Upon Within 30 days following the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in under Section 9(b4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount equal to three times the sum of (i) the Executive’s earned but unpaid highest annual rate of Base Salary and benefitspaid to Executive at any time under the Agreement or the Prior Agreement, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded paid to Executive during with respect to the three completed fiscal years prior two (2) years; provided, however, that such to the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from ServiceTermination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Within 30 days following the occurrence of an Event of Termination under Section 4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Employer shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum equal to the excess, if any, of the present value of the benefit that Executive would have been entitled to under the Employer’s defined benefit pension plan if Executive had continued working for the Employer for 36 months after the effective date of such Event of Termination, over the present value of the benefits to which Executive was actually entitled as of the effective date of such Event of Termination provided that the Executive is a participant in the defined benefit pension plan.
(d) Upon the occurrence of an Event of TerminationTermination under Section 4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Bank Employer will cause to be continued, provide at the BankEmployer’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coveragevision coverage substantially comparable, if anyas reasonably or customarily available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Employer employees. Such coverage shall cease upon 36 months following the earlier Event of (i) twenty-four (24) months from Termination. If the Date Bank cannot provide one or more of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if benefits set forth in this paragraph because Executive is covered by family coverage no longer an employee, and applicable rules and regulations (including, but not limited to the Affordable Care Act) prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination. Such cash payment shall be made in a lump sum within 30 days after the later of Executive’s family date of termination or spouse shall continue to be covered for the remainder effective date of the twenty-four rules or regulations prohibiting such benefits or subjecting the Bank to penalties.
(24e) month period orNotwithstanding the foregoing, in the case of event the spouseExecutive is a Specified Employee (as defined herein), until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, solely to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger necessary to avoid penalties under Code Section 409A, then such payment to the Executive’s benefit pursuant to Sections 4(b), 4(c) and 4(d), if applicable, shall be made to the Executive on the first day of the seventh month following the Executive’s Separation from ServiceEvent of Termination. “Specified Employee” shall be interpreted to comply with Code Section 409A and shall mean a key employee within the meaning of Code Section 416(i) (without regard to paragraph 5 thereof), but an individual shall be a “Specified Employee” only if the Company or the Bank shall pay Executive or any affiliate is a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallypublicly traded company.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death Disability or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a "Separation from Service" within the meaning of Code Section 409A and the Final Regulations; or
(ii) Executive’s voluntary 's resignation from the Bank’s 's employ, uponupon any
(A) a failure to elect or reelect or to appoint or reappoint Executive as Executive Vice President and Chief Lending Officer, material diminution change in Executive’s base compensation;'s function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(B) a material diminution in liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), C) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FC) above.
(iii) (A) Executive’s 's involuntary termination by the Company or the Bank (other than Termination for Cause) or voluntary resignation from the Bank's employ on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “"Exchange Act”"); or xx (iixx) results xesults in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”"BHCA") as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s 's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company's mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive's Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company and/or its subsidiaries will cause to be continued, at the Bank’s Company's sole expense, life insurance, and nontaxable medical, dental and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay the Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executive’s the benefits to which he would be entitled under the Company and/or the Bank's defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for a thirty-six (36) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank's defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a "Separation from Service in connection with an Service" shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of "Separation from Service" shall be interpreted consistent with Final Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible taking into consideration Final Regulation Section 1.409A-1(b)(9)(iii)) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s 's Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the "Termination Benefits") would be deemed to include an "excess parachute payment" under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the "Non-Triggering Amount"), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (Aa termination governed by Section 5(a) Retirementhereof, Death or DisabilityTermination for Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, upon
employ for “Good Reason,” which shall mean without Executive’s consent (A) a material diminution in reduction of Executive’s base compensation;
authority, duties or responsibilities with respect to the Bank, including the failure to elect or reelect or to appoint or reappoint Executive as President or Chief Operating Officer or after December 31, 2014 President and Chief Executive Officer (rather than President and Chief Operating Officer); (B) a material diminution in reduction of Executive’s authority duties or responsibilities;
salary; (C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five his services to the Bank; (25D) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (iiA) (A), (B), (C), through (D), (E) or (F), above, above constituting “Good Reason,” Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period six months after initial existence of time not to exceed ninety (90) days after the initial event giving rise to said right to electresign; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years 30 days after the initial occurrence existence of the basis for resignation Executive has provided the Bank written notice of the circumstances providing the basis for resigning on account of “Good Reason” and the Bank has failed to remedy such eventcircumstances within 30 days after receiving such notice. Notwithstanding A resignation by Executive without complying with the preceding sentence, notice and opportunity to remedy provisions in the event of this Agreement shall not constitute a continuing breach resignation for “Good Reason” for any purpose of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveAgreement.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s 's full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s employ, upon's employ upon any:
(A) a material diminution in Executive’s base compensationfailure to elect or reelect or to appoint or reappoint Executive as Senior Vice President;
(B) a material diminution change in Executive’s authority duties 's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive OfficerExecutive;
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is Executive's annual compensation or benefits or relocation of Executive's principal place of employment by more than twenty-five (25) 25 miles from the its location as of Executive’s principal workplace on the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s 's involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s 's resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank's or the Company's (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive's resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s 's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided PROVIDED that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company's mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Executive's Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum, within thirty (230) years; provideddays after the Date of Termination, however, that such Event or in the event Section 409A of Termination must qualify as a “Separation from Service” as defined in the Internal Revenue Code (“the "Code”") Section 409A and the regulations thereunder. Notwithstanding the foregoingapplies, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on no later than the first day of the seventh month following Executive’s Separation from Servicethe Date of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) Bank's expense for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (30the "Termination Benefits") days would be deemed to include an "excess parachute payment" under Section 280G of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409Aor any successor thereto, then such payment shall Termination Benefits will be made on reduced to an amount (the first day of the seventh month following Executive’s Separation from Service"Non-Triggering Amount"), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein therein defined) during the Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination of Executive’s full-time employment thereunder due to expiration of this Agreement pursuant to Paragraph 2(a); (ii) the termination by the Bank of Executive’s full-time employment hereunder thereunder for any reason other than (A) Retirement, Death or Disability, a Change in Control as defined in Section 7 below, Paragraph 5(a) thereof or (B) Termination for Cause as defined in Section Paragraph 8 hereofthereof; or
disability, as defined in Paragraph 6(a) thereof; death; retirement, as defined in Paragraph 7 thereof; (iiiii) Executive’s voluntary resignation from the Bank’s employemployment, upon
upon (A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution reduction in the budget over which benefits and perquisites to Executive retains authority;
(E) a change in from those being provided as of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
(FB) the liquidation or dissolution of the Bank; or (C) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within . Upon the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an any event described in clauses (A), (B), or (C), (D), (E) or (F) above.
, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (iii60) (A) Executive’s involuntary termination by days prior written notice to the Bank (other than Termination for Cause) on the effective date ofgiven within a reasonable period of time not to exceed, or at any time following, a Change except in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control case of a nature that: continuing breach, four (i4) would be required calendar months after the event giving rise to be reported in response said right to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorelect.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum payment equal to twelve (i12) the Executive’s earned but unpaid months’ Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from ServiceSalary.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier his termination for a period of twelve (i) twenty-four (2412) months from at the Bank’s expense. A COBRA notice will issue upon the Date of Termination or Termination. Any COBRA-mandated coverage extensions beyond the first twelve (ii12) months will be at the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder option of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible Executive and paid for Medicare by him as provided by law unless he has secured other coverage or obtains healthcare from another source extinguishing his coverage elsewhere, whichever period is lessrights.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Commerce Union Bancshares, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 9 and 16.
(a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as President and Chief Executive Officer of the Bank and/or the Company,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above,
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than 30 miles from its location at the President and Chief Executive Officer;effective date of this Agreement,
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), ) or (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety four (904) days calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or voluntary resignation from the Bank’s employ on the effective date of, or at any time following, a Change in ControlControl during the term of this Agreement, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) aboveincluding extensions thereof. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall bebe considered, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the then current management Board of Directors of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class common stock of securities then subject to the plan Company are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b)) or, if different, within the time frame set forth in any sub-paragraph below, the Bank shall pay Executivepay, provide or credit to Executive (or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, ):
(i) his earned but unpaid salary as of the date of termination of employment with the Bank and the benefits to which he would be entitled as of the date of termination as a former employee under the Bank’s employee benefit plans and programs and compensation plans and programs;
(ii) as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (A) the highest annual rate of Base Salary and (B) the highest rate of annual bonus awarded to Executive during the prior two (2) three years; provided. At the election of Executive, howeverwhich election is to be made on an annual basis during the month of January, that such and which election is irrevocable for the year in which made and upon the occurrence of an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingTermination, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment any payments shall be made on in a lump sum, or paid bi-weekly during the first day remaining term of the seventh month this Agreement following Executive’s Separation from Servicetermination. In the event that no election is made, payment to Executive will be made in a lump sum within sixty (60) days of the termination of employment. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Service.termination of employment;
(ciii) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, continued medical, dental and life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such his termination of employment. Such medical and dental coverage shall continue for the lifetime of each of Executive and his spouse as provided in Section 3(c) hereof, and such life insurance shall cease upon the earlier of thirty-six (i) twenty-four (2436) months from following the Date Event of Termination Termination;
(iv) any outstanding unvested stock options or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder shares of restricted stock of the twenty-four (24) month period orCompany that have been awarded to him, in the case which shall become fully vested as of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.his termination of employment;
(dv) Within thirty within sixty (3060) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, or within such shorter period to the extent Executive is a “Specified Employee” as defined in Code Section 409Athat information can be reasonably obtained) following his termination of employment with the Bank, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her Executive’s behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesBank) as if she he had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service his termination, earning his/her actual final the Base Salary that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the annual Base Salary increases at the rate of Base Salary as six percent (6%) per year on each Anniversary Date over the remaining unexpired term of the Date of Termination Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate of six percent (6%) per year;
(vi) within sixty (60) days (or within such shorter period to the extent that information can reasonably be obtained) following his termination of employment with the Bank, a lump sum payment in an amount equal to the short-term Internal Revenue Service’s “applicable federal rate” excess, if any, of (A) the present value of the benefits to which he would be entitled under the Supplemental Executive Retirement Plan (and any other deferred compensation plan for management or highly compensated employees that are maintained by the Bank) if he had continued working for the Bank for the thirty-six (36) month before period following his termination at the Base Salary and bonus that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that annual Base Salary and bonus each increase at the rate of six percent (6%) per year on each Anniversary Date for the remaining unexpired term of the Agreement) over (B) the present value of the benefits to which he is actually entitled under any such plan, as of the date of his termination with the Separation from ServiceBank, compounded annuallywhere the present values are to be determined using a discount rate of six percent (6%) and the mortality tables prescribed under Section 72 of the Code.
(ec) Notwithstanding anything the preceding paragraphs of this Section, in the event that:
(i) the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any total amount of payments permissible under Section 6 280G of this agreementthe Code or any successor thereto, then the Termination Benefits to be paid to Executive shall be so reduced so as to be a Non-Triggering Amount.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good Reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her his duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation limitation, such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination , other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two one (21) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Serviceannualized Base Salary. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for comparable benefits through a new employer, or Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for himself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for comparable benefits through a new employer, or Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of annual cash bonus earned by Executive under the Annual Incentive Plan during the two (2) years immediately prior to the year in which the Executive’s Date of Termination occurs. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for comparable benefits through a new employer, or Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for comparable benefits through a new employer, or Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties. Notwithstanding anything in this Agreement to the contrary, in no event shall the aggregate payments or benefits to be made or afforded to Executive under this Agreement , either as a stand-alone benefit or when aggregated with other payments to, or for the benefit of, Executive (collectively referred to as the “Change in Control Benefits”) that are contingent on a change in control (as defined under Code Section 280G), constitute an “excess parachute payment” under Code Section 280G or any successor thereto, and in order to avoid such a result, Executive’s benefits payable under this Agreement shall be reduced by the minimum amount necessary so that the Change in Control Benefits that are payable to Executive are not subject to penalties under Code Sections 280G and 4999.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
(e) Notwithstanding anything in this Agreement to the contrary, Executive shall not be entitled to any severance payments or benefits under this Section 6 unless and until Executive executes a release of his claims against the Bank, the Company and any affiliate, and their owners, officers, directors, successors, assigns, agents, attorneys, and insurers, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under (i) Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); (2) 42 U.S.C. Section 1981 (age discrimination); (3) 29 U.S.C. Section 621-634 (age discrimination); (4) 29 U.S.C. Section 206(d)(i) (equal pay); (5) the California Fair Employment and Housing Act (discrimination including race, color, national origin, ancestry, religion, physical or mental disability, medical condition, military status, marital status, sex, gender, sexual orientation or age) and (6) Section 1542 of the Civil Code of the State of California, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement. In order to comply with the requirements of Code Section 409A and applicable age discrimination laws, the release shall be provided to Executive no later than the date of his Date of Termination and Executive shall have no fewer than twenty-one (21) days to consider the release, and following Executive’s execution of the release, Executive shall have seven (7) days to revoke said release as it relates to any age discrimination claims available to Executive under federal law.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank of the Executive’s 's full-time employment hereunder for any reason other than (Aa termination governed by Section 5(a) Retirementhereof, Death a termination for events governed by Section 11 hereof, or DisabilityTermination for Cause, as defined in Section 7 below, hereof; or (Bii) Termination the Executive's termination for Cause Good Reason (as defined in Section 8 hereof; or
4(a)(ii)(A) and (iiB) Executive’s voluntary resignation from of this Agreement), which shall mean a termination based on the Bank’s employ, uponfollowing:
(A) a any material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive including without limitation any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained following: (1) a material diminution in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A)Executive’s base compensation, (B), (C), (D), (E2) or (F) above.
(iii) (A) a material diminution in the Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date ofauthority, duties, titles or at any time following, a Change responsibilities as prescribed in ControlSection 1, or (3) a material diminution in the authority, duties or responsibilities of the officer to whom the Executive is required to report, or
(B) Executive’s resignation from any material change in the geographic location at which the Executive must perform his services under this Agreement; provided, however, that prior to any termination of employment with for Good Reason, the Executive must first provide written notice to the Bank or the Company within ninety (or any successor thereto90) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control days of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 initial existence of the current report on Form 8-Kcondition, as in effect on describing the existence of such condition, and the Bank shall thereafter have the right to remedy the condition within thirty (30) days of the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or received the Company written notice from the Executive. If the Bank remedies the condition within the meaning of the Home Owners’ Loan Actsuch thirty (30) day cure period, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control then no Good Reason shall be deemed to have occurred at exist with respect to such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of condition. If the Bank or does not remedy the Company or similar transaction in which condition within such thirty (30) day cure period, then the Bank or Company is not Executive may deliver a notice of termination for Good Reason at any time within sixty (60) days following the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders expiration of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorcure period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b)8, the Bank shall be obligated to pay the Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount within 10 business days following the Date of Termination equal to thirty-six (i36) the Executive’s earned but unpaid months Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) yearsSalary; provided, however, that such Event any payments pursuant to this subsection shall not, in the aggregate, exceed three times the Executive's average taxable compensation from the Bank for the five most recent taxable years ending prior to the year in which the Date of Termination must qualify as a “Separation from Service” as defined occurs. In the event the Bank is not in Internal Revenue Code compliance with its minimum capital requirements or if such payments pursuant to this subsection (“Code”b) Section 409A and would cause the regulations thereunder. Notwithstanding the foregoingBank's capital to be reduced below its minimum regulatory capital requirements, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment payments shall be made on deferred and shall be paid within sixty (60) days after the first day of the seventh month following Executive’s Separation from ServiceBank or any successor thereto is in capital compliance. Such payment payments shall not be reduced in the event the Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Tierone Corp)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (ATermination for Cause) Retirement, Death or Disability, as defined in termination governed by Section 6(Termination for Disability or death) or termination governed by Section 7 below(Termination Upon Retirement), or (Bprovided that such termination of employment is also a “Separation from Service” within the meaning of Section 4(h) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for any of the following reasons:
(A) a material diminution in relocation of Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead principal place of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is employment by more than twenty-five (25) miles from its location at the location of Executive’s principal workplace on the date Effective Date of this Agreement;
(B) a material reduction in the benefits and perquisites to Executive from those being provided as of the later of the Effective Date or any subsequent Anniversary Date of this Agreement, other than an employee-wide reduction in pay or benefits;
(C) a liquidation or dissolution of the Bank; or
(FD) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), or (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice Notice of Termination, as defined in Section 9(a), given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such the condition and giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 solely by virtue of the fact that Executive has submitted his/her resignation but his resignation, provided Executive has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FD) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeor any successor thereto) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from the employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A4(a)(ii)(A), (B), (C), or (D), (E) or (F) above. For these purposes, a “Change in Control of the Bank or the Company Control” shall mean a change in control of the Bank or the Holding Company of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) ), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), other than the Bank’s employee stock ownership plan or trust, directly or indirectly, of securities of the Holding Company or Bank representing 25% or more of the combined voting power of the Holding Company’s outstanding securities, except for any securities purchased by the or Bank’s employee stock ownership plan or trust; outstanding securities or (b) individuals who constitute the Board of Directors of the Bank, or the Holding Company on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters a majority of the directors comprising of the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Holding Company or similar transaction in which the Bank or Holding Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Companyprovided, by someone other than the current management of the Company is distributedhowever, seeking stockholder approval of a plan of reorganizationthat, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by extent necessary to comply with Code Section 409A, “Change in Control” shall instead have the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company meaning set forth in Code Section 409A and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer regulations and such tendered shares have been accepted by the tender offerorother guidance published thereunder.
(b) Upon the occurrence of an Event of Termination within thirty under Sections 4(a) (30i) days after or (ii), on the Date of Termination, as defined in Section 9(b), the Bank shall be obligated to pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s his earned but unpaid Base Salary and benefits, plus salary as of the date of his termination of employment with the Bank; (ii) two the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees; (2iii) times the sum remaining payments that Executive would have earned, in accordance with Sections 3(a) and 3(b), if he had continued his employment with the Bank for the remainder of the term of this Agreement (Abut in any event, such term shall not exceed twelve (24) Base Salary months), and had earned the maximum bonus or incentive award in each calendar year that ends during such term; and (Biv) the highest rate annual contributions or payments that would have been made on Executive’s behalf to any employee benefit plans of bonus awarded to the Bank as if Executive during had continued his employment with the prior two Bank for the remainder of the term of this Agreement (2but in any event, such term shall not exceed twelve (24) years; providedmonths), however, that such Event based on contributions or payments made (on an annualized basis) at the Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Any payments hereunder shall be made on in a lump sum within thirty (30) days after the first day Date of the seventh month following Executive’s Separation from ServiceTermination, except as otherwise provided herein. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination under Section 4(a)(iii), on the Date of Termination, as defined in Section 9(b), the Bank shall be obligated to pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, an amount equal to the sum of: (i) his earned but unpaid salary as of the date of his termination of employment with the Bank; (ii) the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank or Holding Company’s officers and employees; (iii) the remaining payments that Executive would have earned, in accordance with Sections 3 (a) and (b), if he had continued his employment with the Bank for a twelve (24) month period following his termination of employment, and had earned the maximum bonus or incentive award in each calendar year that ends during such term; and (iv) the annual contributions or payments that would have been made on Executive’s behalf to any employee benefit plans of the Bank or the Company as if Executive had continued his employment with the Bank for a twelve (24) month period following his termination of employment, based on contributions or payments made (on an annualized basis) at the Date of Termination. Any payments hereunder shall be made in a lump sum within thirty (30) days after the Date of Termination, except as otherwise provided herein. Such payments shall not be reduced in the event Executive obtains other employment following termination of employment.
(d) Upon the occurrence of an Event of Termination under Section 4(a)(i), (ii) or (iii), the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical to the coverage maintained by the Bank for Executive and his family prior to his/her Executive’s termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the ExecutiveBank’s family or spouse shall continue to be covered expense for the remainder of the twenty-four (24) month period or, in term of this Agreement following the case Date of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(de) Within thirty Notwithstanding anything in this Agreement to the contrary, in no event shall the aggregate payments or benefits to be made or afforded to Executive under this Section constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended, (30“Code”) days of or any successor thereto, and in order to avoid such a result, Executive’s Separation from Service benefits hereunder shall be reduced, if necessary, to an amount, the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined in connection accordance with Section 280G. The allocation of the reduction required hereby shall be determined by Executive, or in the event such allocation violates Code Section 409A, the reduction required hereby shall be made pro-rata.
(f) In the event the Executive resigns for any reason other than an Event of Termination (providedas described in Section 4), howeverTermination for Just Cause (as described in Section 5), thatTermination for Disability or Death (as described in Section 6) or Termination Upon Retirement (as described in Section 7), all obligations of the Bank hereunder shall immediately cease upon the date of such resignation.
(g) Notwithstanding the foregoing, to the extent required by regulations or interpretations of the Office of Thrift Supervision, all severance payments under the Agreement shall not exceed three (3) times the Executive’s average annual compensation (as defined in such regulations or interpretations) over the most recent five (5) taxable years.
(h) For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that years (or such Event fewer number of years Executive has been employed by the Bank) immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceoccurs.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her his duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceoccurs.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she Executive had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service his Date of Termination earning his/her his actual final rate of Base Salary as of the Date of Termination and as if she Executive had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:following as set forth in Section 4(a)(i), (ii) or (iii):
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 belowa Termination for Cause, or (B) Termination a termination for Cause as defined in Section 8 hereofDisability; orand
(ii) Executive’s voluntary resignation from the Bank’s employemploy upon any of the following (which shall be treated as termination of employment for “Good Reason”), uponunless consented to in writing by Executive:
(A) failure to appoint Executive as a material diminution in Executive’s base compensationSenior Vice President;
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 50 miles from Executive’s principal place of employment as of the date of this Agreement;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary to Executive from those being provided in this Agreement as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead of reporting directly to the President and Chief Executive Officeremployees);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authorityBank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of the Executive;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction Agreement by the Bank, provided that constitutes it is not a material breach by the Bank of this Agreement. Agreement if Executive is appointed to a position other than that set forth in Section 1 above provided the Executive remains a Senior Vice President; or Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect; provided, however that the which termination by Executive shall be an Event of Termination. The Bank shall have at least thirty (30) 30 days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the remedy any event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described set forth in clauses (A), (B), (C), (D), ii)(A) through (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that the Bank shall be entitled to waive such Event period and make an immediate payment hereunder. If the Bank remedies the event within such 30 day cure period, then no Good Reason shall be deemed to exist with respect to such event. If the Bank does not remedy the event within such 30 day cure period, then the Executive may deliver a Notice of Termination must qualify as for Good Reason at any time within 60 days following the expiration of such cure period.
(iii) Within 24 months following a “Separation from Service” Change in Control (as defined in Internal Revenue Code (“Code”) Section 409A and 5 below), the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained is involuntarily terminated by the Bank without Cause or the Executive voluntarily resigns for Good Reason. No payments or benefits shall be due to Executive prior to his/her termination, provided, however, such medical coverage shall cease under this Agreement upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days termination of Executive’s Separation from Service employment except as provided in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code this Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually4 hereof.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon in all respects be subject to the terms and conditions stated in Sections 8 and 15.
(a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank or the Company of Executive’s 's full-time employment hereunder for any reason other than (A) Retirementthan: following a Change in Control, Death or as defined in Section 5; for Disability, as defined in Section 7 below6; for Retirement, or (B) Termination for Cause as defined in Section 8 hereof7; or
for Cause, as defined in Section 8; or upon Executive's death; or (ii) unless consented to by the Executive’s , Executive's voluntary resignation from the Bank’s Company's employ, upon
upon any: (A) a material diminution in Executive’s base compensation;
failure to elect or reelect or to appoint or reappoint Executive as Chairman of the Board and Chief Executive Officer of the Company or to nominate or re-nominate Executive as Director of the Bank or the Company, (B) a material diminution adverse change in Executive’s authority duties 's function, duties, or responsibilities;
, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above (and any such material change shall be deemed a continuing breach of this Agreement), (C) relocation of Executive's principal place of employment by more than 30 miles from its location at the Effective Date of this Agreement, or a requirement that Executive must report to a corporate officer or employee instead of reporting directly material reduction in the benefits and perquisites to the President and Chief Executive Officer;
from those being provided as of the Effective Date of this Agreement, (D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;
Bank or Company, or (E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(AE), (B)above, (C), (D), (E) or (F) above. For these purposes, a Change in Control of Executive shall have the Bank or the Company shall mean a change in control of a nature that: (i) would be required right to be reported in response elect to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, terminate his employment under this Agreement by resignation upon written notice pursuant to Section 13 or 15(d) 9 given within a reasonable period of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed not to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securitiesexceed, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval case of a plan of reorganizationcontinuing breach, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days four calendar months after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal giving rise to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded said right to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceelect.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s term of employment under this Agreement, the provisions of this Paragraph shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Corporation of Executive’s full-time fulltime employment hereunder for any reason other than (Athan: a Change in Control as defined in Paragraph 5(a) Retirement, Death or Disabilityhereof; disability, as defined in Section 7 below, or (BParagraph 6(a) Termination for Cause hereof; death; as defined in Section Paragraph 7 hereof; or for Cause, as defined in Paragraph 8 hereof; or
or (ii) Executive’s voluntary resignation from the BankCorporation’s employemployment, upon
unless consented to by the Executive upon (A) a material diminution change in Executive’s base compensation;
function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Paragraphs 1 and 2 above (any such material change shall be deemed a continuing breach of this Agreement); (B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location relocation of Executive’s principal workplace on place of employment by more than fifty (50) miles from its location at the effective date of this Agreement, or a material reduction in the benefits and perquisites to Executive from those being provided as of the effective date of this Agreement; or
(FC) the liquidation or dissolution of the Corporation; or (D) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementCorporation. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FD) above.
, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (iii60) days prior written notice to the Corporation given within a reasonable period of time (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required not to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securitiesexceed, except for any securities purchased by in case of Corporation’s continuing breach, four (4) calendar months) after the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason event giving rise to constitute at least a majority thereof, provided that any person becoming a director subsequent said right to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorelect.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Corporation shall pay Executive, Executive or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum equal payment up to (i) 1.5 times the amount of the Executive’s earned but unpaid annual Base Salary and benefitsSalary. However, plus (ii) two (2) times under no circumstances shall the sum of (A) this payment plus Executive’s previous pay exceed the total Base Salary and (B) the highest rate of bonus awarded committed to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceby this Agreement.
(c) Upon the occurrence of an Event of Termination, the Bank Corporation will cause to be continuedcontinued any life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage then maintained by the Bank Corporation for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier for a continuation period of (i) twenty-four (24) months from at the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverageCorporation’s expense, provided further, that if Executive is covered A COBRA notice shall be issued by family coverage or coverage for herself and a spouse, then Corporation upon the Executive’s family or spouse shall continue to be covered for the remainder date of termination. Any COBRA-mandated coverage (if COBRA is required of the Corporation) extensions beyond the first twenty-four (24) month period or, in months will be at the case option of the spouse, until the spouse becomes eligible Executive and paid for Medicare by him as provided by law unless he has secured other coverage or obtains healthcare from another source extinguishing his coverage elsewhere, whichever period is lessrights.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Atmospheric Glow Technologies Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Association for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankAssociation’s employemploy upon any of the following, uponunless consented to by Executive:
(A) failure to appoint Executive to the position of President, Chief Executive Officer and Chief Financial Officer, or a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Association); however, notwithstanding the foregoing, this Section 4(a)(ii)(A) shall not apply if the Executive relinquishes, for any reason, his duties as Chief Financial Officer (and retains the sole title of President and Chief Executive Officer);
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 20 miles from the location of the Association’s principal executive offices as of the date of this Agreement;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerAssociation);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Association; or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementAssociation. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Association shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Association may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Association shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal the Base Salary and bonuses that Executive would be entitled to for the remaining unexpired term of the Agreement. For purposes of determining the bonus(es) payable hereunder, the bonus(es) will be deemed to be (i) equal to the Executive’s earned but unpaid Base Salary highest bonus paid at any time during the prior three years, and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of otherwise paid at such time as such bonus awarded to Executive during the prior two (2) years; provided, however, that such would have been paid absent an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such payments shall be made on the first day paid in a lump sum within ten (10) days of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until Executive executes a release of his claims against the Association, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement.
(c) Upon the occurrence of an Event of Termination, the Bank will cause Association shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum cash payment reasonably estimated to be continuedequal to the present value of the contributions that would have been made on the Executive’s behalf under the Association’s defined contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan maintained by the Association), as if Executive had continued working for the Association for the remaining unexpired term of the Agreement following such Event of Termination, earning the salary that would have been achieved during such period. Such payments shall be paid in a lump sum within ten (10) days of the Executive’s Separation from Service and shall not be reduced in the event Executive obtains other employment following the Event of Termination.
(d) Upon the occurrence of an Event of Termination, the Association shall provide, at the BankAssociation’s expense, for the remaining unexpired term of the Agreement, nontaxable medical and dental coverage and life insurance coverage and non-taxable medical and dental insurance coveragesubstantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Association for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Association employees (the “Insurance Coverage”). Notwithstanding the foregoing, howeverif the Insurance Coverage is not permitted by applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees) or to the extent such medical coverage will result in an excise tax or additional tax to the Company, Association or Executive (other than ordinary income tax), the Association shall cease upon pay the earlier of Executive a lump sum payment equal to the monthly premiums payable by the Executive to obtain similar benefits, with such payment made within ten (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (3010) days of the Executive’s Separation from Service in connection with an Service, to the extent that such payment does not violate the Insurance Coverage restrictions (other than ordinary income tax).
(e) For purposes of this Agreement, a “Separation from Service” shall have occurred if the Association and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Oconee Federal Financial Corp.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 7(b) below, or Retirement, as defined in Section 7(a) below, or (B) Termination for Cause Cause, as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for Good Reason. Good Reason shall mean any of the following events:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
(DB) a material diminution change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the budget over which Executive retains authorityposition and attributes thereof described in Section 1, above;
(EC) a change liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive;
(D) material reduction in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s Base Salary or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to remedy any event set forth in clauses (ii)(A) through (E) above; provided, however, that the Bank shall be entitled to waive such period and make an immediate payment hereunder. If the Bank remedies the event within such thirty (30) day cure period, then no Good Reason shall be deemed to exist with respect to such condition and provided that event. If the Bank does not remedy the event within such thirty (30) day cure period, then Executive actually terminates employment may deliver a Notice of Termination, as defined in Section 9(a) below, for Good Reason at any time within two years after sixty (60) days following the initial occurrence expiration of such eventcure period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) E), above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum within thirty (230) yearsdays after the Date of Termination; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent if Executive is a “Specified Employee,” as defined in Code Section 409ATreasury Regulation 1.409A-1(i), and such earlier payment would trigger then, solely to the extent required to avoid penalties under Code Section 409A, then such payment shall be made on delayed until the first day of the seventh month following the Executive’s Separation from ServiceDate of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, continued life insurance coverage and non-taxable medical medical, dental, and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of Bank’s expense for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under this Section (30the “Termination Benefits”) days would be deemed to include an “excess parachute payment” under Section 280G of Executive’s the Code or any successor thereto, then the cash severance payable under this Section 6 shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Bank under Section 6 being non-deductible pursuant to Code Section 280G and subject to excise tax imposed under Code Section 4999.
(e) For purposes of Section 6, “Event of Termination” as used herein shall mean “Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified EmployeeService” as defined in Code Section 409A409A and the regulations promulgated thereunder, such that the Bank and such earlier payment Executive reasonably anticipate that the level of bona fide services Executive would trigger penalties under Code Section 409A, then such payment shall be made on the first day perform after termination would permanently decrease to a level that is less than 50% of the seventh average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyperiod.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution in Executive’s base compensationduties or responsibilities, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer), provided, however, that a change in the Executive’s line of reporting that does not result in a material diminution in Executive’s duties or responsibilities will not constitute an Event of Termination;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Employer);
(C) a requirement that Executive must report to a corporate officer liquidation or employee instead dissolution of reporting directly to the President and Chief Executive Officer;Employer; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive’s employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her Executive’s subsequent death, his/her Executive’s beneficiary or beneficiaries, or his/her Executive’s estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid one (1) times Base Salary and benefitsSalary, plus (ii) two one (21) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such amount shall be made payable as salary continuation that will be paid over twelve (12) months commencing on the first 10th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of Executive’s claims against the Employer, and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall not begin before the date Executive has signed (and not revoked) the Release and the Release has become irrevocable under the time period set forth under applicable law. The Release must be executed and become irrevocable by the 60th day following the date of the Event of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Code Section 409A, the payments and benefits described in this Section 4(b) will be paid, or commence, in the second calendar year.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide for twelve (12) months, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision, and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Employer’s employees. Notwithstanding the foregoing, howeverif applicable law (including, such medical coverage shall cease upon but not limited to, laws prohibiting discriminating in favor of highly- compensated employees), or, if participation by the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage not permitted under the terms of the applicable health plans, or coverage for herself and a spouseif providing such benefits would subject the Employer to penalties, then the Executive’s family or spouse Employer shall continue pay the Executive a cash lump sum payment reasonably estimated to be covered equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Event of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessforegoing reasons.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything In the event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 5(b) below) and such transaction results in an Event of Termination for the Executive within eighteen (18) months following the effective date of the transaction:
(i) the payment to the contrary hereinExecutive described in Section 4(b), Executive’s resignation for any reason other than those as severance pay or liquidated damages, or both, shall be increased to an amount equal to the sum of two (2) times Base Salary, plus two (2) times the average of the annual incentive compensation paid to Executive during each of the three years immediately prior to the year in which the Event of Termination occurs, payable in accordance with Section 4(b); and
(ii) the Employer shall provide the benefits set forth in clauses 6(a)(ii)(ASection 4(c) for eighteen (18) months, (instead of twelve (12) months), (Band such benefits shall otherwise be provided in accordance with Section 4(c), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or DisabilityTermination for Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
or (ii) Executive’s voluntary 's resignation from the Bank’s Holding Company's employ, upon
upon any of (A) a material diminution in Executive’s base compensation;
notice to Executive by the Holding Company of non-renewal of the term of this Agreement, (B) a material diminution in Executive’s authority duties failure to appoint or responsibilities;
reappoint Executive as an executive vice president and Chief Commercial Banking Officer of the Holding Company, or failure to appoint or reappoint Executive as an executive vice president and Chief Commercial Banking Officer of the Bank, unless Executive consents to any such event, (C) a requirement that Executive must report material change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above (and any such material change shall be deemed a corporate officer or employee instead continuing breach of reporting directly to the President and Chief Executive Officer;
this Agreement), (D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is relocation of Executive's principal place of employment by more than twenty-five fifty (2550) miles from its location at the location of Executive’s principal workplace on the effective date of this Agreement; or
, or a material reduction in the benefits and perquisites available to Executive to which Executive does not consent, (E) liquidation or dissolution of the Bank or the Holding Company, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementHolding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon not less than sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days exceed, except in case of a continuing breach, four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (American Financial Holdings Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Xxxxx Savings Entities may terminate the Executive’s employment at any time during the Term with or without Cause. Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s term 's Initial Term of employment under this AgreementAgreement or any renewal term thereof, the provisions of this Section 4 shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Xxxxx Savings Entities of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination termination for Cause (as defined in Section 8 hereof), (B) upon Retirement (as defined in Section 7 hereof), (C) Executive’s Disability (as set forth in Section 6 hereof) or death; or
(ii) Executive’s voluntary 's resignation from the Bank’s employ, upon
employment following (A) a material diminution change imposed by the Xxxxx Savings Entities or either of them in Executive’s base compensation;
's functions, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement), (B) a relocation by the Xxxxx Savings Entities or either of them of Executive's principal place of employment to a location more than 30 miles outside the City of Wooster, or a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to the Executive from those being provided as of the effective date of this Agreement (except for any reduction that is part of a Company-wide reduction in employee pay or responsibilities;
benefits), (C) a requirement that Executive must report to a corporate officer liquidation or employee instead dissolution of reporting directly to the President and Chief Executive Officer;
Bank or the Company, or (D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank Xxxxx Savings Entities or either of this Agreementthem; and (iii) the event specified in Section 4(b) hereof. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), D) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect; provided, however that the Bank which termination by Executive shall have at least thirty (30) days be an Event of Termination. No payments or benefits shall be due to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement upon the termination of Executive's employment except as provided in Xxxxxxxx 0, 0, 0 xx 0 xxxxxx.
(x) As used in this Agreement, an Event of Termination shall also mean and this Section 6 by virtue include involuntary termination of the fact that Executive has submitted his/her resignation but has remained in by the employment Xxxxx Savings Entities or either of them without Cause, or, based upon the occurrence of one or more of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described events specified in clauses (ii) (A), (B), (C), (D), (E) or (FD) above.
(iii) (A) Executive’s involuntary termination of Section 4(a), voluntary resignation by the Bank (other than Termination for Cause) Executive on the effective date of, or at any time followingwithin 12 months after, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in the ownership of the Company or the Bank, a change in the effective control of the Company or the Bank, or a nature that: (i) would be required to be reported change in response to Item 5.01 the ownership of a substantial portion of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) assets of the Securities Exchange Act Company or the Bank, in each case as provided under Section 409A of 1934 (the “Exchange Act”); or Code and the regulations thereunder. The Executive’s voluntary resignation under this Section 4(b) shall not constitute an Event of Termination unless, within 90 days after the initial existence of the condition specified in clauses (ii) results in a (A), (B), (C) or (D) of Section 4(a), the Executive gives notice of the existence of the condition or conditions to the Xxxxx Savings Entities, and unless the Xxxxx Savings Entities fail to remedy the condition or conditions within 30 days after receiving such notice from the Executive. If the 90-day notice period begins within 12 months after the Change in Control of but, together with the Bank or the Company within the meaning of the Home Owners’ Loan Act30-day cure period, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of extends past 12 months after the Change in Control; or (iii) without limitation such a Change in Control , the voluntary resignation shall nevertheless be deemed to have occurred at such time as (a) considered any “person” (as the term is used in Sections 13(d) and 14(d) Event of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, Termination for purposes of this clause (bSection 4(b), considered as though he or she were a member of the Incumbent Board; or .
(c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence termination of Executive’s employment constituting a separation from service, as defined in Code Section 409A, and resulting from an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b4(a) or 4(b), provided that Executive has signed and delivered to the Bank Xxxxx Savings Entities a release agreement in form and substance acceptable to the Xxxxx Savings Entities (“Release Agreement”) on or before the deadline set forth in the Release Agreement, which deadline shall not be later than 60 days after the date of Executive’s termination, and further provided that Executive has not revoked the Release Agreement within the deadline for revocation established by the Release Agreement, the Xxxxx Savings Entities, in accordance with the time line set forth below, shall pay Executive, Executive or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or damages (but not both), a lump sum cash amount (“Termination Payment”) equal to to, in the case of an Event of Termination as defined in Section 4(a), one (i1) times the Executive’s earned but unpaid Base Salary and benefitssum of, plus (ii) or, in the case of an Event of Termination as defined in Section 4(b), two (2) times the sum of:
(i) The highest annual rate of Base Salary paid to Executive at any time under this Agreement,
(ii) The greater of (A) Base Salary and (Bx) the highest rate of average annual cash bonus awarded paid to Executive during with respect to the two completed fiscal years prior two to the Event of Termination, or (2y) yearsthe cash bonus paid to Executive with respect to the fiscal year ended prior to the Event of Termination, and
(iii) The value of the employer matching contributions made on Executive’s behalf in the Xxxxx Savings 401(k) Retirement Plan, or any successor thereto, and the value of the employer contribution or allocation made on Executive’s behalf in the Xxxxx Savings Community Bank Restated Employee Stock Ownership Plan, or any successor thereto, in the calendar year preceding the year in which the Event of Termination occurs. If Executive is not a specified employee as defined in Section 409A of the Internal Revenue Code and the rules promulgated thereunder (“Specified Employee”), the Termination Payment shall be made no later than ninety (90) days following the termination of Executive’s employment; provided, however, that such Event if the 90-day period following the date of the termination of Executive’s Employment ends in the year after the year in which the termination of employment occurs, the Termination must qualify as a “Separation from Service” as defined Payment shall be made on the 90th day and shall not be made in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderyear in which the termination of employment occurs. Notwithstanding Executive will not be permitted to specify the foregoing, to year in which the extent Termination Payment will be made. If Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment the Termination Payment shall be made on the first day of the seventh month following the termination of Executive’s Separation from Serviceemployment. Such payment The Termination Payment shall not be reduced in the event Executive obtains other employment following Separation termination of employment. Despite anything to the contrary in this Agreement, the Executive shall not be entitled to any severance benefits under Section 4 of this Agreement on account of employment termination unless the Executive's employment termination constitutes a separation from Serviceservice, as that term is defined in Code Section 409A and the rules, regulations, and guidance of general application issued thereunder by the Department of the Treasury.
(cd) Upon the occurrence termination of Executive’s employment constituting a separation from service, as defined in Code Section 409A, and resulting from an Event of TerminationTermination as defined in Section 4(a) or 4(b), if Executive elects continuation coverage pursuant to section 4980B(f) of the Bank will cause Internal Revenue Code (“COBRA”), and, additionally, if, subsequent to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance expiration of COBRA coverage, if any, Executive purchases an individual policy with coverage substantially identical comparable to the coverage maintained by the Bank for all employees (hereinafter, individually or collectively, “Continuation Coverage”), provided that Executive prior has timely signed and delivered the Release Agreement to his/her terminationthe Company as specified in Section 4(c) above, providedand has not thereafter revoked the Release Agreement, howeverand further provided that neither the Bank nor any of its affiliates will incur any penalty or additional tax for failing to comply with any applicable law, Executive shall be reimbursed in an amount equal to the monthly premium paid by Executive for such medical coverage shall cease upon Continuation Coverage, less any applicable tax withholdings (“Continuation Coverage Reimbursement Payments”) for a period not to exceed twelve (12) months following the earlier termination of (i) Executive’s employment in the case of an Event of Termination as defined in Section 4(a), or twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination as defined in Section 4(b) . If Executive is not a Specified Employee (as defined in Section 4(c) above), the monthly Continuation Coverage Reimbursement Payments shall commence no later than ninety (90) days following the termination of Executive’s employment; provided, however, thatif the 90-day period following the termination of Executive’s employment ends in the year after the year in which Executive’s employment termination occurs, the monthly Continuation Coverage Reimbursement Payments shall commence on the 90th day and shall not be made in the year in which employment termination occurs. Executive will not be permitted to specify the extent year in which the monthly Continuation Coverage Reimbursement Payments will commence. If Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment the Bank shall be made commence the monthly Continuation Coverage Reimbursement Payments on the first day of the seventh month following the termination of Executive’s Separation from Service)employment. Regardless of when the monthly Continuation Coverage Reimbursement Payments commence, the Bank first such payment shall pay include the amount that the Executive would have received to the date of such commencement if the Continuation Coverage Reimbursement Payments had commenced immediately following the termination of Executive’s employment. Notwithstanding the foregoing, if the reimbursement of Executive’s Continuation Coverage payments hereunder would trigger the 20% tax and interest penalties under Section 409A of the Code, then the Continuation Coverage Reimbursement Payments shall not be provided, and in lieu thereof, Executive shall be paid a lump sum cash amount equal to the present value cost if the monthly Continuation Coverage Reimbursement Payments were made, provided that doing so will not cause the Xxxxx Savings Entities or any of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and their affiliates to incur any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working penalty or additional tax for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are failure to be determined using a discount rate equal to the short-term Internal Revenue Service’s “comply with any applicable federal rate” for the month before the date of the Separation from Service, compounded annuallylaw.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Wayne Savings Bancshares Inc /De/)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon in all respects be subject to the terms and conditions stated in Sections 7 and 15.
(a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include included any one or more of the following:
: (i) the involuntary termination by the Bank or the Holding Company of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination for Cause as defined in Section 8 7 hereof; or
or (ii) Executive’s voluntary 's resignation from the Bank’s 's employ, upon
upon any (A) a material diminution in Executive’s base compensation;
failure to elect or reelect or to appoint or reappoint Senior Vice President and Secretary, (B) a material diminution change in Executive’s authority duties 's function, duties, or responsibilities;
, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above (and any such material change shall be deemed a continuing breach of this Agreement), (C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic Executive's principal place of employment by more than 30 miles from its location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
(F) any other action , or inaction that constitutes a material breach by reduction m the Bank benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement, (D) liquidation or dissolution of the Bank or Holding Company, or (E) breach of this Agreement by the Bank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed proscribed time frame of an initial event occurrence specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of and the Bank and is are engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), ) and (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (ATermination for Cause) Retirement, Death or Disability, as defined in termination governed by Section 6 (Termination for Disability or death) or termination governed by Section 7 below, or (B) Termination for Cause as defined in Section 8 hereofUpon Retirement); or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for any of the following reasons:
(A) a material diminution in Executive’s base compensationthe failure to appoint or reappoint Executive to the position set forth under Section 1;
(B) a material diminution change in Executive’s authority duties functions, duties, or responsibilitiesresponsibilities with the Bank, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than forty-five (45) miles from its location at the President and Chief Executive OfficerEffective Date of this Agreement;
(D) a material diminution reduction in the budget over which benefits and perquisites to Executive retains authorityfrom those being provided as of the later of the Effective Date or any subsequent Anniversary Date of this Agreement, other than an employee-wide reduction in pay or benefits;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this AgreementBank; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice Notice of Termination, as defined in Section 9(a), given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 solely by virtue of the fact that Executive has submitted his/her resignation but his resignation, provided Executive has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeor any successor thereto) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from the employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A4(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a “Change in Control of the Bank or the Company Control” shall mean a change in control of the Bank or, its holding company as of the date hereof (the “Holding Company”) of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) ), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Holding Company or Bank representing 25% or more of the combined voting power of the Holding Company’s or Bank’s outstanding securities, securities except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board of Directors of the Bank or the Holding Company on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters a majority of the directors comprising of the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Holding Company or similar transaction in which the Bank or Holding Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in necessary to comply with Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment “Change in Control” shall be made on instead have the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those meaning set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) Code Section 409A and the regulations and other guidance published thereunder; and provided further that a Change in Control shall not entitle Executive be deemed to any payments under Section 6 have occurred solely as a result of this agreementthe conversion of the Holding Company’s mutual holding company parent to stock form or a reorganization used to effect such a conversion.
Appears in 1 contract
Samples: Employment Agreement (Ben Franklin Financial, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company or its subsidiaries of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination for Cause Cause, as defined in Section 8 hereof, retirement in accordance with Bank's pension plan or Disability as defined in Section 7; or
(ii) Executive’s voluntary 's resignation from the Bank’s Holding Company's employ, upon
in the manner set forth below, upon any (A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that appoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
Officer of the Holding Company unless consented to by the Executive, (DB) a material diminution changes in Executive's functions, duties or responsibilities, which would cause Executive's position to become one of lesser responsibility, importance or scope from the budget over which Executive retains authority;
position and attributes described in Section 1, above, unless consented to by the Executive, (EC) a change in the geographic relocation of Executive's principal place of employment by more than 50 miles from its location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
, unless consented to by the Executive, (D) material reduction in the benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement, unless consented to by the Executive, (E) liquidation or dissolution of the Holding Company or its subsidiaries or in the event of any governmental confiscation of the net worth of the Holding Company or its subsidiaries, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementHolding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (3060) days prior written notice given within six full calendar months after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal giving rise to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded said right to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceelect.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good Reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination , other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one ( 1 ) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition , the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death Disability or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Code Section 409A and the Final Regulations; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President and Director - Financial Reporting, material diminution change in Executive’s base compensation;function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(B) a material diminution in liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), C) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FC) above.
(iii) (A) Executive’s involuntary termination by the Company or the Bank (other than Termination for Cause) or voluntary resignation from the Bank’s employ on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLABHCA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to one and one-half (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (21½ ) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company and/or its subsidiaries will cause to be continued, at the BankCompany’s sole expense, life insurance, and nontaxable medical, dental and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for eighteen (i) twenty-four (2418) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay the Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executivethe benefits to which he would be entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for an eighteen (18) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank’s defined benefit pension plan ( and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of “Separation from Service” shall be interpreted consistent with Final Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible taking into consideration Final Regulation Section 1.409A-1(b)(9)(iii)) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) : the involuntary termination by the Bank Company of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death Disability (as defined in Section 7) or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Cause (as defined in Section 8 hereofbelow), provided that such termination of employment constitutes a "Separation from Service" as defined in Section 6(e) herein; or
(ii) or Executive’s voluntary 's resignation from the Bank’s employCompany, upon
(A) upon any failure to elect or re-elect or to appoint or re-appoint Executive as a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties senior executive officer of the Company, liquidation or responsibilities;
(C) a requirement dissolution of the Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead of reporting directly to are caused by reorganizations that do not affect the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location status of Executive’s principal workplace on the date , or material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), or (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Company may elect to waive such eventthirty (30) day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), or (C), (D), (E) or (F) above.
(iii) (A) . The termination of Executive’s involuntary termination 's employment by the Bank (other than Termination for Cause) on the effective date ofCompany, or the Executive's voluntary resignation from the Company's employ, at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result during the term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) the Company has received a proxy statement soliciting proxies from stockholders Nomination Solicitation Notice, as that term is defined in Article II, Section 10 of the Company's Bylaws, by someone other than the current management of the Company which Nomination Solicitation Notice is distributed, seeking stockholder approval of determined to have been filed in a plan of reorganization, merger or consolidation of the Company or similar transaction timely manner and in compliance with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) 's Bylaws. Upon the occurrence of an Event of Termination within thirty (30described in Section 6(a)(i) days after or Section 6(a)(ii), on the Date of Termination, as defined in Section 9(b), the Bank Company shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum amount equal to the greater of (i) the Executive’s earned but unpaid one year of Base Salary and benefits, plus Salary; or (ii) two (2) times the sum of (A) Base Salary and (B) for the highest rate remaining term of bonus awarded to Executive during the prior two (2) years; provided, however, that such Agreement. Upon the occurrence of an Event of Termination must qualify as described in Section 6(a)(iii) (i.e., a “Separation from Service” termination of employment in connection with a change in control) which occurs on or before December 1, 2012, on the Date of Termination, as defined in Internal Revenue Code (“Code”) Section 409A and 9(b), the regulations thereunder. Notwithstanding the foregoingCompany shall pay Executive, to the extent Executive is a “Specified Employee” as defined in Code Section 409Aor, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum amount equal to two years of Base Salary. Upon the occurrence of an Event of Termination, the Bank Company will cause to be continued, at the Bank’s expense, Company's sole expense life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank Company for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 7 and 14.
(a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank Association or the Company of Executive’s 's full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 5 below, or (B) Termination for Cause as defined in Section 8 6 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s Association's employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as President and Chief Executive Officer,
(B) a material diminution change in Executive’s authority duties 's function, duties, or responsibilities;, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive's principal place of employment by more than 30 miles from its location at the President and Chief Executive Officer;effective date of this Agreement.
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Association or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementAssociation. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), C)or (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankAssociation, the Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 4 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Association and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), or (E) or (F) above.
(iii) (A) Executive’s involuntary termination by 's voluntary resignation from the Bank (other than Termination for Cause) Association's employ on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Association or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank Association or the Company within the meaning of the Home Owners’ Owners Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectivelythereunder, the “HOLA”) as in effect at the time of the Change in ControlControl (collectively, the "HOLA"); or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, securities except for any securities purchased by the Bank’s Association's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank Association or the Company or similar transaction in which the Bank Association or Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations or financial institutions, and as a result such proxy solicitation a plan of which reorganization, merger consolidation or similar transaction involving the outstanding shares Company is approved by the requisite vote of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company's stockholders; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b)7, the Bank Association shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) 299% of the Executive’s earned but unpaid Base Salary and benefits's "base amount" of compensation, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Section 280G(b)(3) of the Internal Revenue Code (“"Code”) Section 409A and "). At the regulations thereunder. Notwithstanding election of the foregoingExecutive, which election is to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on an annual basis during the first day month of January, and which election is irrevocable for the seventh month following Executive’s Separation from Service. Such payment shall not be reduced year in the event Executive obtains other employment following Separation from Service.
(c) Upon which made and upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment any payments shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive in a lump sum equal or paid monthly during the remaining term of this Agreement following the Executive's termination. In the event that no election is made, payment to the present value of the Bank’s contributions that would have been Executive will be made on his/her behalf under each a monthly basis during the remaining term of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.this
Appears in 1 contract
Samples: Employment Agreement (First Federal of Olathe Bancorp Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death Disability or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a "Separation from Service" within the meaning of Code Section 409A and the Treasury Regulations thereunder; or
(ii) Executive’s voluntary 's resignation from the Bank’s 's employ, uponupon any
(A) failure to elect or reelect or to appoint or reappoint Executive as Executive Vice President of Retail Banking, or a material diminution change in Executive’s base compensation;'s function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(B) a material diminution in liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), C) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FC) above.
(iii) (A) Executive’s 's involuntary termination by the Company or the Bank (other than Termination for Cause) or voluntary resignation from the Bank's employ on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “"Exchange Act”"); or ox (iixx) results xxsults in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”"BHCA") as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s 's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company's mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive's Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company and/or its subsidiaries will cause to be continued, at the Bank’s Company's sole expense, life insurance, and nontaxable medical, dental and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay the Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executive’s the benefits to which he would be entitled under the Company and/or the Bank's defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for a thirty-six (36) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank's defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a "Separation from Service in connection with an Service" shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of "Separation from Service" shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible taking into consideration Treasury Regulation Section 1.409A-1(b)(9)(iii)) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s 's Separation from Service).
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the "Termination Benefits") would be deemed to include an "excess parachute payment" under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount, the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) a termination due to “Disability” or death, as set forth in Section 6; or a termination upon “Retirement, Death or Disability, ,” as defined in Section 7 below, or (B) Termination a termination for Cause “Cause,” as defined in Section 8 hereof8; orand
(ii) Executive’s voluntary resignation from within two years after any of the Bank’s employfollowing, uponunless consented to by Executive (where any vote by Executive in performance of his duties as a member of the Board in favor of such action shall constitute express consent of Executive to such action):
(A) a material diminution in relocation of Executive’s base compensationprincipal place of employment to a location that is more than 50 miles from Jacksonville, Florida;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees of the Bank) or;
(C) a requirement material breach of this Agreement by the Employer; provided, however, that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action title or inaction that constitutes duties will not be considered a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses clause (ii) above (A“Good Reason”), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation within two years after the initial occurrence of such condition upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however however, that the Bank shall have be given at least thirty (30) days to cure such remedy the condition and provided that before the Executive actually terminates employment within two years after the initial occurrence of such eventemployment. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement Such voluntary termination for Good Reason by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) an Event of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorTermination.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum in cash equal to one times (i) the Executive’s earned but unpaid highest annual rate of Base Salary paid to Executive at any time under this Agreement and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate annual bonus and non-equity incentive compensation paid to the Executive for the most recent calendar year prior to the Event of bonus awarded to Executive during the prior two (2) yearsTermination; provided, provided however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingthat, to the extent Executive is a “Specified Employee” required by regulations or interpretations of the Office of Thrift Supervision, all severance payments under the Agreement shall be reduced not to exceed three (3) times Executive’s average annual compensation (as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on regulations or interpretations) over the first day of the seventh month following Executive’s Separation from Servicemost recent five (5) taxable years. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicethe Event of Termination. Notwithstanding the foregoing, in the event Executive is a “Specified Employee” (as defined in the Internal Revenue Code (the “Code”) Section 409A and the regulations thereunder) to the extent required under Code Section 409A, no payment shall be made to Executive prior to the first day of the seventh month following the Event of Termination.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, shall provide at the Bank’s expense, life and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, coverage substantially identical comparable to the coverage maintained by the Bank for Executive and his family prior to his/her terminationthe Event of Termination, provided, however, except to the extent such medical coverage may be changed in its application to all Bank employees. Such coverage at the Bank’s expense shall cease upon the earlier of (i) twenty-four twelve (2412) months from following the Date Event of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare obtaining substantially similar coverage or obtains healthcare coverage elsewhere, whichever period is lessfrom a new employer.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death Disability or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Code Section 409A and the Final Regulations; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President and Director – Financial Reporting, material diminution change in Executive’s base compensation;function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(B) a material diminution in liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), C) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FC) above.
(iii) (A) Executive’s involuntary termination by the Company or the Bank (other than Termination for Cause) or voluntary resignation from the Bank’s employ on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLABHCA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to one and one-half (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (21 1⁄2 ) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank Company and/or its subsidiaries will cause to be continued, at the BankCompany’s sole expense, life insurance, and nontaxable medical, dental and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for eighteen (i) twenty-four (2418) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay the Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executivethe benefits to which he would be entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for an eighteen (18) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 4(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank’s defined benefit pension plan ( and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of “Separation from Service” shall be interpreted consistent with Final Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under subparagraph (b) or (d) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible taking into consideration Final Regulation Section 1.409A-1(b)(9)(iii)) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as defined herein definedbelow) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank of Executive’s full-time employment hereunder under this Agreement by the Employers for any reason other than (A) Retirement, Death or Disability, as defined in a termination governed by Section 7 below, of this Agreement; or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from his employment with the Bank’s employEmployers for Good Reason, upon
which shall mean any of the following: (A) failure to re-appoint Executive to his positions set forth in Section 1 of this Agreement, unless Executive consents to such event, or a termination without cause of Executive’s employment as set forth in Section l(c) of this Agreement, (B) material diminution change in Executive’s base compensation;
(B) a material diminution in functions, duties, or responsibilities with the Employers or their subsidiaries, which change would cause Executive’s authority duties position(s) to become one of lesser responsibility, importance, or responsibilities;
scope, unless Executive consents to such event, (C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is Executive’s principal place of employment by more than twenty-five (25) miles from its location at the location of Executive’s principal workplace on Effective Date, unless Executive consents to such event, (D) material reduction (except to the date extent provided for in Section 3(g) of this Agreement; or
) in the annual compensation, unless Executive consents to such event, or (FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), ) or (E) or above, Executive shall have the right to terminate his employment, provided, however, that prior to any termination of employment for Good Reason, the Executive must first provide written notice to the Employers within ninety (F90) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control days of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 initial existence of the current report on Form 8-Kcondition, as in effect on describing the existence of such condition, and the Employers shall thereafter have the right to remedy the condition within thirty (30) days of the date hereofthe Employer received the written notice from the Executive, pursuant to Section 13 or 15(dprovided that the cure period may be waived. If the Employers remedies the condition within such thirty (30) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Actday cure period, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control then no Good Reason shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction exist with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant respect to such tender offer and such tendered shares have been accepted by the tender offerorcondition.
(b) Upon the occurrence Executive’s termination from employment in accordance with paragraph (a) of an Event of Termination within thirty (30) days after this Section 4, on the Date of Termination, as defined in Section 9(b)8 of the Agreement, the Bank Employers shall be obligated to pay Executive, or, in the event of his/her subsequent deathhis death following the Date of Termination, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid Base Salary and benefits, incentive compensation that would have been paid to Executive for the remaining term of this Agreement had the Event of Termination not occurred (based on Executive’s then current Base Salary and most recently paid or accrued bonus at the time of the Event of Termination); plus (ii) two the value, as calculated by a recognized firm customarily performing such valuation, of any stock options which as of the Date of Termination, have been granted to Executive but are not exercisable by Executive and the value of any restricted stock awards which have been granted to Executive, but in which Executive does not have a nonforfeitable or fully-vested interest as of the Date of Termination; plus (2iii) times the sum value of all employee benefits (Aother than those set forth in Section 3 (c) Base Salary and (Bd) the highest rate of bonus awarded hereof) that would have been provided to Executive during for the prior two remaining term of this Agreement had an Event of Termination not occurred, based on the most recent level of contribution, accrual or other participation by or on behalf of Executive. All cash severance amounts payable to the Executive hereunder shall be paid in a lump sum within thirty (230) yearsdays following the Date of Termination; provided, however, if the Executive is a “Specified Employee,” as defined in Treasury Regulation 1.409A-1(i), then, solely to the extent required to avoid penalties under Section 409A of the Code, such payment shall be delayed until the first day of the seventh month following the Executive’s Date of Termination.
(c) In addition to the payments provided for in paragraph (b) of this Section 4, upon Executive’s termination of employment in accordance with the provisions of paragraph (a) of this Section 4, to the extent that the Employers continue to offer any life insurance or non-taxable medical and dental insurance in which Executive participates in on the last day of his employment (each being a “Welfare Plan”), Executive and his covered dependents shall continue participating in such Welfare Plans, subject to the same premium contributions on the part of Executive as were required immediately prior to the Event of Termination must qualify until the earlier of (i) his death (ii) his employment by another employer other than one of which he is the majority owner or (iii) the end of the remaining term of this Agreement. If the Employers (or their successors) do not offer the Welfare Plans at any time after the Event of Termination, then the Employers shall provide Executive with a lump sum payment equal to the premiums for such benefits (determined as of the date of termination of such Welfare Plan(s)) as if paid for the remaining term of this Agreement.
(d) For purposes of this Agreement, a “termination of employment” shall mean a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A of the Code and the regulations promulgated thereunder. Notwithstanding , such that the foregoing, Bank and the Executive reasonably anticipate that the level of bona fide services the Executive would perform after a termination of employment would permanently decrease to the extent Executive a level that is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day less than 50% of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in average level of bona fide services performed (whether as an employee or as an independent contractor) over the event Executive obtains other employment following Separation from Service.
immediately preceding thirty-six (c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (2436) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessperiod.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25fifty ( 50 ) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section 4 shall in all respects be subject to the terms and conditions stated in Sections 8, 9 and 14.
(a) The provisions of this Section 6 4 shall apply upon the occurrence of an Event of Termination (as herein defineddefined herein) during the Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirementfollowing a Change in Control, Death as defined in Section 5(a) hereof, (B) voluntary resignation or Disability, as defined in Section 7 below6 hereof, or the death of Executive, or (BC) Termination for Cause as defined in Section 8 7 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, upon
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, all Base Salary through the date of termination as severance pay or liquidated damages, or both, well as a lump sum amount equal to (i) two times the Executive’s earned but unpaid Base Salary and benefits, plus (iias defined in Section 3(a) two (2above) times at the sum rate in effect on his Date of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) yearsTermination; provided, provided however, that if the Bank is not in compliance with its minimum capital requirements or if such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and payments would cause the regulations thereunder. Notwithstanding the foregoingBank’s capital to be reduced below its minimum capital requirements, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment payments shall be made on deferred until such time as the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced Bank is in the event Executive obtains other employment following Separation from Servicecapital compliance.
(cii) Upon the occurrence of an Event of Termination, subject to compliance with the Bank will cause to requirements of Section 9(c), all payments shall be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from made in a lump sum within 60 days after the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverageTermination, provided further, that however if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employeespecified employee,” as defined in Code Section 409Athen, and such earlier payment would trigger if required to avoid penalties under Code Section 409A, then such payment shall be delayed as described in Section 20 hereof. Such payment(s) shall not be reduced in the event the Executive obtains other employment following termination of employment. Notwithstanding anything herein to the contrary, in the event of an Event of Termination within one year following a Change in Control, as defined in Section 5 hereof, any payments to the Executive under this Agreement shall be made on the first day solely in accordance with Section 5 hereof.
(c) For purposes of the seventh month following Executive’s this Agreement, “Event of Termination” or “termination of employment” shall be construed to require a “Separation from Service)” in accordance with Code Section 409A and the Treasury Regulations promulgated thereunder, such that the Bank shall pay and the Executive reasonably anticipate that the level of bona fide services the Executive would perform after termination would permanently decrease to a lump sum equal to the present value level that is less than 50% of the Bank’s contributions that would have been made on his/her behalf under each average level of bona fide services performed (whether as an employee or an independent contractor) over the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twentyimmediately preceding 36-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyperiod.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:, as set forth in Section 4(a)(i), (ii) or (iii):
(i) the involuntary termination by the Bank Employer of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 below, or (B) a Termination for Cause as defined in Section 8 hereofor a termination for Disability; orand
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following (which shall be treated as termination of employment for “Good Reason”), uponunless consented to by Executive:
(A) prior to a material diminution Change in Executive’s base compensation;Control, failure to appoint or re-appoint Executive to the level of Senior Executive Vice President
(B) on or after a Change in Control, failure to appoint or re-appoint Executive to the title and position that the Executive held immediately prior to a Change in Control, or a material diminution change in Executive’s authority function, duties, or responsibilities as compared to the Executive’s function, duties or responsibilitiesresponsibilities immediately prior to a Change in Control, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement);
(C) a requirement that Executive must report relocation of Executive’s principal place of employment to a corporate officer or employee instead location that is more than 50 miles from the location of reporting directly to the President and Chief Executive OfficerEmployer’s principal executive offices as of the date of this Agreement;
(D) on or after a material diminution Change in Control, a reduction in Base Salary as compared to the budget over which Executive retains authorityExecutive’s Base Salary immediately prior to a Change in Control;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties Bank or the Company other than liquidations or dissolutions that is more than twenty-five (25) miles from are caused by reorganizations that do not affect the location status of the Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) 30 days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the remedy any event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described set forth in clauses (A), (B), (C), (D), (Eii)(A) or through (F) above; provided, however, that the Employer shall be entitled to waive such period and make an immediate payment hereunder. If the Employer remedies the event within such 30 day cure period, then no Good Reason shall be deemed to exist with respect to such event. If the Employer does not remedy the event within such 30 days cure period, then the Executive may deliver a Notice of Termination for Good Reason at any time within 60 days following the expiration of such cure period.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) Within 24 months following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange ActSection 5 below), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of CompanyExecutive’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank employment is involuntarily terminated without Cause or the Company Executive voluntarily resigns for Good Reason. No payments or similar transaction benefits shall be due to Executive under this Agreement upon the termination of Executive’s employment except as provided in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorthis Section 4.
(b) Upon Within 30 days following the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in under Section 9(b4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount equal to three times the sum of (i) the Executive’s earned but unpaid highest annual rate of Base Salary and benefitspaid to Executive at any time under the Agreement or the Prior Agreement, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded paid to Executive during with respect to the three completed fiscal years prior two (2) years; provided, however, that such to the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from ServiceTermination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Within 30 days following the occurrence of an Event of Termination under Section 4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Employer shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum equal to the excess, if any, of the present value of the benefit that Executive would have been entitled to under the Employer’s defined benefit pension plan if Executive had continued working for the Employer for 36 months after the effective date of such Event of Termination, over the present value of the benefits to which Executive was actually entitled as of the effective date of such Event of Termination provided that the Executive is a participant in the defined benefit pension plan.
(d) Upon the occurrence of an Event of TerminationTermination under Section 4(a)(i), Section 4(a)(ii) or 4(a)(iii) of this Agreement, the Bank Employer will cause to be continued, provide at the BankEmployer’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coveragevision coverage substantially comparable, if anyas reasonably or customarily available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Employer employees. Such coverage shall cease upon 36 months following the earlier Event of (i) twenty-four (24) months from Termination. If the Date Bank cannot provide one or more of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if benefits set forth in this paragraph because Executive is covered by family coverage no longer an employee, and applicable rules and regulations (including, but not limited to the Affordable Care Act) prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Bank to penalties, then the Bank shall pay Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination. Such cash payment shall be made in a lump sum within 30 days after the later of Executive’s family date of termination or spouse shall continue to be covered for the remainder effective date of the twenty-four rules or regulations prohibiting such benefits or subjecting the Bank to penalties.
(24e) month period orNotwithstanding the foregoing, in the case of event the spouseExecutive is a Specified Employee (as defined herein), until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, solely to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger necessary to avoid penalties under Code Section 409A, then such payment to the Executive’s benefit pursuant to Sections 4(b), 4(c) and 4(d), if applicable, shall be made to the Executive on the first day of the seventh month following the Executive’s Separation from ServiceEvent of Termination. “Specified Employee” shall be interpreted to comply with Code Section 409A and shall mean a key employee within the meaning of Code Section 416(i) (without regard to paragraph 5 thereof), but an individual shall be a “Specified Employee” only if the Company or the Bank shall pay Executive or any affiliate is a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallypublicly traded company.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilityfollowing a Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination termination for Cause Cause, as defined in Section 8 hereof, or upon Retirement as defined in Section 7 hereof, or for Disability as set forth in Section 6 hereof; orand
(ii) Executive’s voluntary resignation from the Bank’s employ, upon
upon any (A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
Officer of the Bank, unless consented to by Executive, (DB) a material diminution change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the budget over position and attributes thereof described in Section 1 above, to which Executive retains authority;
has not agreed in writing (Eand any such material change shall be deemed a continuing breach of this Agreement), (C) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location relocation of Executive’s principal workplace on place of employment by more than 30 miles from its location at the effective date of the Agreement, or a material reduction in the benefits and perquisites to Executive from those being provided as of the effective date of this Agreement; or
Agreement (Funless such reduction is part of a reduction in benefits to all employees of the Bank in connection with a bank-wide benefit plan), or (D) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), or (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90exceed90 days) days after the initial event giving rise to said right to elect, which termination by Executive shall be an Event of Termination; provided, however however, that the Bank shall have at least thirty (30) 30 days following its receipt of such written notice to cure such condition and provided that the situation identified by Executive actually terminates employment within two years after as the initial occurrence basis for the Event of such eventTermination. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), or (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum cash amount equal to the greater of the payments due for the remaining term of the Agreement, or three (3) times the sum of: (i) the Executive’s earned but unpaid highest annual rate of Base Salary paid to Executive at any time under this Agreement, and benefits, plus (ii) two (2) times the sum greater of (A) Base Salary and (Bx) the highest rate of average annual cash bonus awarded paid to Executive during with respect to the three (3) completed fiscal years prior two to the Event of Termination, or (2y) yearsthe cash bonus paid to Executive with respect to the fiscal year ended prior to the Event of Termination; provided, provided however, that if the Bank is not in compliance with its minimum capital requirements or if such Event payments would cause the Bank’s capital to be reduced below its minimum capital requirements, such payments shall be deferred until such time as the Bank is in capital compliance; and provided further, that in no event shall total severance compensation from all sources exceed three (3) times Executive’s average annual compensation over the five (5) fiscal years preceding the fiscal year in which the termination of Termination must qualify as employment occurs (for purposes of this provision and only for purposes of this provision, compensation shall mean any payment of money or provision of any other thing of value in consideration of employment, including, without limitation, base salary, commissions, bonuses, pension and profit sharing plans, severance payments, retirement, director or committee fees, fringe benefits, and the payment of expense items without accountability or business purpose or that do not meet the Internal Revenue Service (“IRS”) requirement for deductibility by the Bank). The present value of the payment required hereunder shall be made in a lump sum within thirty (30) days following Executive’s “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee,” as defined in Code Section 409A, and such earlier payment would trigger provided, however, if Executive is a “Specified Employee,” as defined in Code Section 409A, then, solely to the extent required to avoid penalties under Code Section 409A, then such payment shall be made on delayed until the first day of the seventh full month following Executive’s Separation from Service. For these purposes, present value shall be determined using the applicable federal rate under Code Section 1274(d). Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, continued at the Bank’s expense, life life, insurance coverage and non-taxable medical and dental insurance coverage, if any, that is substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Bank employees. Such coverage shall cease upon the earlier of thirty-six (i) twenty-four (2436) months from following the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyTermination.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her his duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she Executive had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/her Separation from Service a Change in Control) following his Date of Termination earning his/her his actual final rate of Base Salary as of the Date of Termination and as if she Executive had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of material lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer);
(B) on or after a material diminution Change in Control, as defined in Section 5(b), Executive’s authority duties or responsibilitiesprincipal place of employment is relocated to a location that is more than 100 miles from the location of the Employer’s principal executive offices as determined immediately prior to the date of a Change in Control;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerEmployer);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Employer; or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid two (2) times Base Salary and benefitsSalary, plus (ii) two (2) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during each of the three years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such amount shall be made payable as salary continuation that will be paid over eighteen (18) months commencing on the first 60th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of his claims against the Employer, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall begin on the 60th day following the date of the Event of Termination, provided that before that date, Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, provided, however, except to the extent such medical coverage shall cease upon the earlier of may be changed in its application to all Employer’s employees for eighteen (i18) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessmonths.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon 4.1. Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term ), the provisions of employment under this Agreementsection shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Termination for Cause, as defined in Section 7 belowhereof, or (B) Termination a termination for Cause Disability as defined set forth in Section 8 6 hereof; orand
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following events (which shall be treated as termination of employment for “Good Reason”), uponunless consented to by Executive:
(A) a material diminution in relocation of Executive’s base compensationprincipal place of employment to a location that is more than thirty-five (35) miles from the location of the Employer’s principal executive offices as of the date of this Agreement;
(B) a material diminution reduction in Executive’s authority duties the benefits and perquisites, including Base Salary, to Executive from those being provided in the Agreement as of the Effective Date (except for any reduction that is part of a reduction in pay or responsibilitiesbenefits that is generally applicable to officers or employees);
(C) a requirement liquidation or dissolution of the Bank or the Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementEmployer. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) 90 days after the initial event giving rise to said right to elect, which termination by Executive shall be an Event of Termination. The Employer shall have 30 days to remedy any event set forth in clauses (ii)(A) through (D) above; provided, however however, that the Bank Employer shall have at least thirty (30) days be entitled to cure waive such condition period and provided that Executive actually terminates employment within two years after make an immediate payment hereunder. If the initial occurrence of such event. Notwithstanding the preceding sentence, in Employer remedies the event of a continuing breach of this Agreement by the Bankwithin such 30-day cure period, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control then no Good Reason shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction exist with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant respect to such tender offer and event. If the Employer does not remedy the event within such tendered shares have been accepted by 30-day cure period, then the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date Executive may deliver a Notice of Termination, as defined in Section 9(b9(c) hereof, for Good Reason at any time within 60 days following the expiration of such cure period.
(iii) The involuntary termination of Executive’s employment by the Employer without cause or the voluntary resignation by Executive from the Employer’s employ for Good Reason within one (1) year following a Change in Control (as defined in Section 5 below).
4.2. Within 30 days following the occurrence of an Event of Termination, the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus that would have been paid during the remaining term of this Agreement (ii) two (2) times based on the sum of (A) Base Salary and (B) in effect upon the highest rate Event of bonus awarded to Executive during the prior two (2) yearsTermination); provided, however, that such Event of Termination must qualify as payment is conditioned upon the Executive signing a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, general release acceptable to the extent Executive is a “Specified Employee” Employer, in substantially the form set forth as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from ServiceAppendix A to this Agreement. Such payment shall not be reduced in the event Executive obtains other employment following Separation termination of employment. Upon an Event of Termination, the Executive shall have such rights as specified in any other employee benefit plans or programs maintained by the Employer, as may be in effect from Servicetime to time.
(c) 4.3. Upon the occurrence of an Event of Termination, the Bank Employer will cause continue to be continuedprovide, at under the Bank’s expensesame cost-sharing arrangement as is in effect upon the Event of Termination, life insurance coverage and non-taxable medical and dental health insurance coveragecoverage substantially comparable, if anyas reasonably or customarily available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her his termination, provided, however, except to the extent such medical coverage may be changed in its application to all Employer employees. Such coverage shall cease upon continue until December 31, 2012.
4.4. Notwithstanding the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period orforegoing, in the case of event the spouseExecutive is a Specified Employee (as defined herein), until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, solely to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger necessary to avoid penalties under Code Section 409A, then such payment to the Executive’s benefit pursuant to Sections 4(b) and 4(c), if applicable, shall be made to the Executive on the first day of the seventh month following the Executive’s Separation from Service)Event of Termination; provided, however, that the Bank six-month delay for such payment shall not apply in the event that the separation pay Executive a lump sum equal is due to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her upon an involuntary Separation from Service earning his/her actual final or a Good Reason Separation from Service and the amount of the separation pay does not exceed two times the lesser of (i) the Executive’s annualized compensation based upon his annual rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” pay for the month before taxable year preceding the date of year in which the Separation from Service, compounded annually.
Service occurs; or (eii) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those limit set forth in clauses 6(a)(ii)(ASection 401(a)(17) of the Internal Revenue Code for the year in which the Separation from Service occurs (i.e. for 2009, $245,000), as provided in Treasury Regulation Section 1.409A-1(b)(9)(iii) (Bwhich separation pay, if in excess of the limit, shall be made as provided herein up to the amount of the limit). “Specified Employee” shall be interpreted to comply with Code Section 409A and shall mean a key employee within the meaning of Code Section 416(i) (without regard to paragraph 5 thereof), (C), (D),(E) but an individual shall be a “Specified Employee” only if the Company or (F) shall not entitle Executive to the Bank or any payments under Section 6 of this agreementaffiliate is a publicly traded company.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs either six (6) months preceding or within eighteen (18) months following a Change in Control (as defined in Section 5 hereof), Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder by the Employer for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Code; or
(ii) Executive’s voluntary resignation from the BankEmployer’s employemploy upon any of the following, uponunless consented to by Executive:
(A) a material diminution in Executive’s base compensationduties or responsibilities to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Employer);
(B) a material diminution reduction in Executive’s authority duties Base Salary or responsibilitiesannual incentive opportunity (bonus and long-term) to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in Base Salary or annual bonus opportunity that is generally applicable to officers of the Company or as a result of any change in applicable law or regulatory guidance);
(C) a requirement that Executive must report to a corporate officer or employee instead geographical relocation of reporting directly to the President and Chief Executive Officer;Executive’s principal office by more than fifty (50) miles; or
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank Employer (including the failure to grant the Sign-On Grant as contemplated by Section 3(c)) or notice by the Board of non-renewal of this AgreementAgreement pursuant to Section 2(a). Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after Executive has actual knowledge of the initial event giving rise to said the right to elect; provided, however that the Bank which termination by Executive shall be an Event of Termination. The Employer shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent the Employer may elect to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause waive said thirty (b), considered as though he or she were a member of the Incumbent Board; or (c30) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank Employer shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of: (i) the Executive’s earned but unpaid two (2) times Base Salary and benefitsSalary, plus (ii) two (2) times the sum average of (A) Base Salary and (B) the highest rate of bonus awarded annual incentive compensation paid to Executive during the three completed full years immediately prior two (2) years; provided, however, that such to the year in which the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code occurs (“Code”which, for the avoidance of doubt, shall not include any annual incentive compensation paid with respect to 2024) Section 409A and the regulations thereunder. Notwithstanding the foregoing, if there have been fewer than three completed years of annual incentive compensation prior to the extent Executive is a “Specified Employee” as defined year in Code Section 409Awhich the Event of Termination occurs, and such earlier payment would trigger penalties under Code Section 409Ait will be the average of the completed years prior to the year in which the Event of Termination occurs (which, then such payment for the avoidance of doubt, shall not include any annual incentive compensation paid with respect to 2024). Such amount shall be made payable as salary continuation that will be paid over twelve (12) months commencing on the first 10th day of the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following Separation the Event of Termination. Payments of this salary continuation will be paid in equal installments at the times and in the manner consistent with the Employer’s payroll practices for executive employees, and each installment payment shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. In addition, upon the occurrence of an Event of Termination, any unvested portion of the Sign-On Grant shall vest (or, in the case of PRSUs, be eligible to vest) pro rata based on the portion of a three (3)-year service period, commencing on the Start Date, that Executive actually provided service to the Company (but not over 100 percent) (with the number of PRSUs eligible to vest based on the achievement of the applicable performance goals to be determined based on the same method of proration), subject in the case of PRSUs to actual performance during the remainder of the scheduled term of such award. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release (the “Release”) of any claims he has or may have against the Employer and its affiliates, and their officers, directors, successors and assigns, releasing said persons from Serviceany and all claims, rights, demands, causes of action, suits, arbitrations, or grievances arising from or relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law, claims for indemnification, advancement or under applicable directors and officers insurance policies or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement, and (ii) the payments and benefits shall not begin before the date Executive has signed (and not revoked) the Release and the Release has become irrevocable under the time period set forth under applicable law. The Release must be executed and become irrevocable by the 60th day following the date of the Event of Termination, provided that if the 60-day period spans two (2) calendar years, then, to the extent necessary to comply with Code Section 409A, the payments and benefits described in this Section 4(b) will be paid, or commence, in the second calendar year.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedEmployer shall provide for twenty-four (24) months, at the BankEmployer’s expense, life insurance coverage and non-taxable nontaxable medical (including any employer contributions to a health savings account), health, vision, and dental insurance coveragecoverage substantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank Employer for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Employer’s employees. Notwithstanding the foregoing, howeverif applicable law (including, such medical coverage shall cease upon the earlier but not limited to, laws prohibiting discriminating in favor of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coveragehighly- compensated employees), provided furtheror, that if participation by Executive is covered by family coverage not permitted under the terms of the applicable health plans, or coverage for herself and a spouseif providing such benefits would subject the Employer to penalties, then the Executive’s family or spouse Employer shall continue pay Executive a cash lump sum payment reasonably estimated to be covered equal to the premiums for such nontaxable medical, health, vision and dental coverage, with such payment to be made by lump sum within thirty (30) business days of the Event of Termination, or if later, the date on which the Employer determines that such insurance coverage (or the remainder of such insurance coverage) cannot be provided for the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessforegoing reasons.
(d) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Employer and Executive reasonably anticipate that either no further services will be performed by Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the twelve (12) months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted in a manner consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything In the event that the Company acquires an entity in a transaction that does not constitute a Change in Control (as defined in Section 5(b) below) and such transaction results in an Event of Termination for the Executive within eighteen (18) months following the effective date of the transaction:
(i) the payment to the contrary hereinExecutive described in Section 4(b), Executive’s resignation as severance pay or liquidated damages, or both, shall be increased to an amount equal to the sum of two and a half (2.5) times Base Salary, plus two and a half (2.5) times the average of the annual incentive compensation paid to Executive during the three completed full years immediately prior to the year in which the Event of Termination occurs (which, for the avoidance of doubt, shall not include any reason other annual incentive compensation paid with respect to 2024) and if there have been fewer than those three completed years of annual incentive compensation prior to the year in which the Event of Termination occurs, it will be the average of the completed years prior to the year in which the Event of Termination occurs (which, for the avoidance of doubt, shall not include any annual incentive compensation paid with respect to 2024), payable in accordance with Section 4(b);
(ii) any unvested portion of the Sign-On Grant shall vest in full, in the case of PRSUs based on target performance; and
(iii) the Employer shall provide the benefits set forth in clauses 6(a)(ii)(ASection 4(c) for thirty (30) months, and such benefits shall otherwise be provided in accordance with Section 4(c), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (First Interstate Bancsystem Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;,
(B) material change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (Aa) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such . Upon the occurrence of an Event of Termination must qualify as followed by Executive’s termination of employment hereunder, the payments required by this Section 6(b) shall be made in a “Separation from Service” as defined in lump sum within thirty (30) days (or if Section 409A of the Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingapplies, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Servicetermination of employment). Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twentythirty-four six (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself self and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twentythirty-four (24) six month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service termination of employment in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in or if Code Section 409A409A applies, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Servicetermination of employment), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she he had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service his termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or any successor thereto.
(f) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(ED) or (F) E), whether prior to or following a Change in Control, shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (United Financial Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disability, as defined in Section 7 7(b) below, or Retirement, as defined in Section 7(a) below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for Good Reason. Good Reason shall mean any of the following events:
(A) a material diminution in Executive’s base compensationfailure to elect or reelect or to appoint or reappoint Executive as Executive Vice President and Operations Officer;
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive OfficerExecutive;
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s Base Salary or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to remedy any event set forth in clauses (ii)(A) through (E) above; provided, however, that the Bank shall be entitled to waive such period and make an immediate payment hereunder. If the Bank remedies the event within such thirty (30) day cure period, then no Good Reason shall be deemed to exist with respect to such condition and provided that event. If the Bank does not remedy the event within such thirty (30) days cure period, then Executive actually terminates employment may deliver a Notice of Termination, as defined in Section 9(a) below, for Good Reason at any time within two years after thirty (30) days following the initial occurrence expiration of such eventcure period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), ) ,(D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum, within thirty (230) yearsdays after the Date of Termination; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent if Executive is a “Specified Employee,” as defined in Code Section 409ATreasury Regulation 1.409A-1(i), and such earlier payment would trigger then, solely to the extent required to avoid penalties under Code Section 409A, then such payment shall be made on delayed until the first day of the seventh month following the Executive’s Separation from ServiceDate of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, continued life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of (i) Bank’s expense for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under this Section (30the “Termination Benefits”) days would be deemed to include an “excess parachute payment” under Section 280G of Executive’s the Code or any successor thereto, then the cash severance payable under this Section 6 shall be reduced by the minimum amount necessary to result in no portion of the payments and benefits payable by the Bank under Section 6 being non-deductible pursuant to Code Section 280G and subject to excise tax imposed under Code Section 4999.
(e) For purposes of Section 6, “Event of Termination” as used herein shall mean “Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified EmployeeService” as defined in Code Section 409A409A and the regulations promulgated thereunder, such that the Bank and such earlier payment Executive reasonably anticipate that the level of bona fide services Executive would trigger penalties under Code Section 409A, then such payment shall be made on the first day perform after termination would permanently decrease to a level that is less than 50% of the seventh average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyperiod.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than a termination due to death (A) see Section 6), a termination upon “Retirement, Death or Disability, ,” as defined in Section 7 below, or (B) Termination a termination for Cause “Cause,” as defined in Section 8 hereof; or8, and
(ii) Executive’s voluntary resignation from the Bank’s employ, upon
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes employ within 90 days after a material breach of this Agreement by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, provided that Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) gives not less than 30 days prior written notice given to the Bank within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to electsuch breach; provided, however and provided that the Bank shall have has at least thirty (30) 30 days to cure such condition and provided that Executive actually terminates employment within two years after remedy the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorcondition.
(b) An “Event of Termination” shall not include the assignment of different duties, functions or responsibilities with the Bank by the Chief Executive Officer that would change the scope of the position and attributes thereof described in Section 1.
(c) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum in cash equal to the sum of: (i) the Executive’s his earned but unpaid Base Salary and benefits, plus salary as of the date of his termination of employment with the Bank; (ii) two the benefits, if any, to which he is entitled to as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank or Company’s officers and employees; (2) times the sum of (A) Base Salary and (Bii) the highest rate of bonus awarded to remaining payments that Executive during would have earned, in accordance with Sections 3(a) and 3(b), if he had continued his employment with the prior two Bank for twelve (212) years; provided, however, that full months following such Event of Termination must qualify Termination, and had earned the maximum bonus or incentive award in each calendar year that ends during such term; and (iv) the annual contributions or payments that would have been made on Executive’s behalf to any employee benefit plans of the Bank as if Executive had continued his employment with the Bank for twelve (12) full months following such Event of Termination, based on contributions or payments made (on an annualized basis) as of the date of the Event of Termination. Any payments hereunder shall be made in a “Separation from Service” as defined in Internal Revenue Code lump sum within thirty (“Code”30) Section 409A and days after the regulations thereunderdate of such Event of Termination. Notwithstanding the foregoing, to in the extent event Executive is a “Specified Employee” (as defined in Code Section 409A409A and the regulations thereunder), and such earlier payment would trigger penalties to the extent required under Code Section 409A, then such no payment shall be made on to Executive prior to the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from ServiceEvent of Termination.
(cd) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, continued life insurance coverage and non-taxable medical and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive and his family prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (providedfor the remaining unexpired term of this Agreement. Thereafter, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment COBRA group health care continuation coverage shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal available to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan Executive and Employee Stock Ownership Plan (his spouse and any other defined contribution plan maintained by the Bank dependents in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “accordance with applicable federal rate” for the month before the date of the Separation from Service, compounded annuallylaw.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Atlantic Coast Financial CORP)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Institution of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or DisabilityTermination for Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
or (ii) Executive’s voluntary 's resignation from the Bank’s Institution's employ, upon
upon any of (A) a material diminution in Executive’s base compensation;
notice to Executive by the Institution of non-renewal of the term of this Agreement, (B) failure to appoint or reappoint Executive as a material diminution in Executive’s authority duties senior executive vice president and Chief Banking Officer of the Bank or responsibilities;
the Holding Company, unless Executive consents to any such event, (C) material change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above (and any such material change shall be deemed a requirement that Executive must report to a corporate officer or employee instead continuing breach of reporting directly to the President and Chief Executive Officer;
this Agreement), (D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is relocation of Executive's principal place of employment by more than twenty-five fifty (2550) miles from its location at the location of Executive’s principal workplace on the effective date of this Agreement; or
, or a material reduction in the benefits and perquisites available to Executive to which Executive does not consent, (E) liquidation or dissolution of the Institution or the Holding Company, (F) any other action or inaction that constitutes a material breach of this Agreement by the Institution, (G) Executive's voluntary termination of employment prior to January 31, 2003, or (H) Executive's voluntary termination of employment following his appointment by the Boards of Directors of the Bank and the Holding Company as President and Chief Operating Officer of the Bank and the Holding Company (if such appointment occurs) if thereafter during the term of this AgreementAgreement but prior to January 31, 2005, the Boards of Directors of the Bank and the Holding Company notify the Executive that he is ineligible for promotion as Chief Executive Officer under the Bank's and the Holding Company's executive succession plan or there occurs a change in Executive's reporting responsibilities. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E), (F), (G) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(AH), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (B)60) days prior written notice given within a reasonable period of time not to exceed, (C), (D), (E) or (F) above. For these purposes, a Change except in Control of the Bank or the Company shall mean a change in control case of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-Kcontinuing breach, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days four calendar months after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal giving rise to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded said right to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceelect.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (American Financial Holdings Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceoccurs.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this section shall apply; provided, however, that benefits shall be provided either under Section 4 or Section 5 (related to a Change in Control), but not both, such that to the extent the Executive has received payments under one of those Sections, the Executive shall not receive payments under the other Section. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5 hereof, or (B) Termination a termination for Cause Cause, as defined in Section 8 hereof, or a termination upon Retirement as defined in Section 7 hereof, or a termination for disability as set forth in Section 6 hereof; orand
(ii) Executive’s voluntary resignation from the Bank’s employemploy upon any of the following (which shall be treated as termination of employment for “Good Reason”), uponunless consented to by Executive:
(A) failure to appoint Executive to the Executive Position set forth in Section 1 above, or a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1 above, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement);
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 50 miles from the location of the Bank’s principal executive offices as of the date of this Agreement;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the effective date of this Agreement (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead of reporting directly to the President and Chief Executive Officeremployees);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authorityBank or the Company;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this Agreement. Bank; or Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) not less than 30 days prior written notice given within a reasonable period of time (not to exceed ninety (90exceed, except in case of a continuing breach, 90 days) days after the initial event giving rise to said right to elect; provided, however that the Bank which termination by Executive shall have at least thirty (30) days be an Event of Termination. No payments or benefits shall be due to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue upon the termination of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control except as a result of any event described provided in Section 6(a)(ii)(A), (B), (C), (D), (E) 4 or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date 5 hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum cash amount equal to three times the sum of (i) the Executive’s earned but unpaid highest annual rate of Base Salary and benefitspaid to Executive at any time under the Agreement, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded paid to Executive during with respect to the three completed fiscal years prior two (2) years; provided, however, that such to the Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from ServiceTermination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon termination of employment. Notwithstanding the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period orforegoing, in the case of event the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” Employee (as defined in Code Section 409Aherein), and such earlier payment would trigger penalties under Code Section 409A, then such no payment shall be made on to the Executive prior to the first day of the seventh month following Executive’s Separation from Service), such Event of Termination. “Specified Employee” shall be interpreted to comply with Code section 409A and shall mean a key employee within the meaning of Code Section 416(i) (without regard to paragraph 5 thereof) but an individual shall be a “Specified Employee” only if the Bank shall pay Executive or Company is a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallypublicly traded company.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination, other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of her subsequent death, her beneficiary or beneficiaries, or her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.. Notwithstanding the foregoing, nothing herein shall be construed to curtail Executive’s rights to continued health care coverage, at Executive’s expense, for the requisite period under any federal or state health care continuation laws
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/a Change in Control) following her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5(a) hereof, death, retirement (Aas defined in the Institution’s employee handbook) Retirement, Death or Disabilityfor Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the BankHolding Company’s employ, upon
, any (A) a material diminution in failure to elect or reelect or to appoint or reappoint Executive as [ ],unless consented to by the Executive’s base compensation;
, (B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;
responsibilities with the Holding Company or its Subsidiaries, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above, unless consented to by the Executive, (C) a requirement that Executive must report relocation of Executive’s principal place of employment by more than 25 miles from its location at the effective date of this Agreement, unless consented to a corporate officer or employee instead of reporting directly to by the President and Chief Executive Officer;
Executive, (D) a material diminution reduction in the budget over which benefits and perquisites to the Executive retains authority;
(E) a change in from those being provided as of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
(F) any other action or inaction that constitutes a material breach , unless consented to by the Bank Executive, or (E) breach of this AgreementAgreement by the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(AE), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (B)60) days prior written notice given within six full calendar months after the event giving rise to said right to elect; provided, (C)however, (D), (E) or (F) above. For these purposes, a Change in Control an Event of the Bank or the Company Termination shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall not be deemed to have occurred at such time as if, during the sixty (a60) any “person” (as day notice period, the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent circumstances giving grounds to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after are cured in a manner determined by the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoinghis discretion, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicesatisfactory.
(cb) Upon the occurrence of an Event of Termination, on the Bank Date of Termination, as defined in Section 8, the Holding Company shall be obligated to pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a sum equal to the sum of: (i) the amount of the remaining payments that the Executive would have earned if he had continued working for the Holding Company and/or Institution during the remaining unexpired term of this Agreement at the Executive’s Base Salary at the Date of Termination; (ii) the amount equal to the annual value of the additional employer-derived contributions that would have been credited directly to the Executive’s accounts under the tax-qualified 401(k) plan, employee stock ownership plan and all nonqualified benefit plans that Executive would have earned if he had continued working for the Holding Company and/or Institution during the remaining unexpired term of this Agreement, where such amounts are calculated by multiplying the last annual amount credited to the Executive’s account under each of these plans by the remaining unexpired term of this Agreement; (iii) the portion, if any, of the compensation earned by the Executive through the date of the termination of his employment with the Holding Company and/or Institution which remains unpaid as of such date, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in no event later than thirty (30) days after the Executive’s termination of employment; and (iv) the benefits, if any, to which he is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained by the Holding Company and the Institution for their officers and employees. At the election of the Executive, which election is to be made prior to an Event of Termination, such payments shall be made in a lump sum within thirty (30) days following the Date of Termination. In the event that no election is made, payment to the Executive will be made on a monthly basis in approximately equal installments during the remaining term of the Agreement with no present value applied. Such payments shall not be reduced in the event the Executive obtains other employment following termination of employment.
c) Upon the occurrence of an Event of Termination followed by an actual termination of employment, the Holding Company will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical equivalent to the coverage maintained by the Bank Holding Company or its Subsidiaries for Executive prior to his/her terminationhis termination at no premium cost to the Executive, provided, however, except to the extent such medical coverage may be changed in its application to all Holding Company or Institution employees. Such coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder expiration of the twenty-four (24) month period or, in remaining term of this Agreement. The Holding Company and Executive hereby stipulate that the case damages which may be incurred by Executive following any such termination of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days employment are not capable of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary accurate measurement as of the Date date first above written and that the payments and benefits contemplated by Sections 4(b) and (c) constitute reasonable damages under the circumstances and shall be payable without any requirement of Termination proof of actual damage and as if she had made the maximum amount of employee contributions permittedwithout regard to Executive’s efforts, if any, to mitigate damages. The Holding Company and Executive further agree that the Holding Company may condition the payments and benefits (if any) due under such plan or plans. Such present values are to be determined using a discount rate equal to Sections 4(b)(i), 4(b)(ii), and 4(c) on the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date receipt of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for from any reason other than those set forth and all positions which he holds as an officer, director or committee member with respect to the Holding Company, the Institution or any subsidiary or affiliate of either of them and the execution of an effective release of claims against the Holding Company and its Subsidiaries in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive a form to any payments under Section 6 of this agreementbe prescribed by the Holding Company.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an any Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreementagreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as President and CEO,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) E), above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum within thirty (230) years; provideddays after the Date of Termination, however, that such Event or in the event Section 409A of Termination must qualify as a “Separation from Service” as defined in the Internal Revenue Code (the “Code”) applies, (see Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on 23) no later than the first day of the seventh month following Executive’s Separation from Servicethe Date of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for the Executive prior to his/her his termination, providedsubject to any insurance carrier imposed limitations. In such event of carrier imposed limitations, however, such medical the Bank shall make a “best efforts” attempt to substitute similar individual coverage. Such coverage shall cease upon the earlier of continue for twelve (i) twenty-four (2412) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period orand, in the case event of a Change in Control as defined in Section 6(iii), such coverage shall continue for thirty six (36) months from the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessDate of Termination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A6(iii), and such earlier payment would trigger penalties under Code on the Date of Termination, as defined in Section 409A9(b), then such payment all stock options granted to Employee by the Company shall be made on the first day of the seventh month following Executive’s Separation from Service)exercisable in full, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary effective as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Servicetermination and all restricted stock awards then outstanding shall be fully vested, compounded annuallybe deemed earned and non-forfeitable and be free of restrictions.
(e) Notwithstanding anything the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (6. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any total amount of payments permissible under Section 6 280G of this agreementthe Code or any successor thereto.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company or its subsidiaries of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination for Cause Cause, as defined in Section 8 hereof, retirement in accordance with the Bank's pension plan or Disability as defined in Section 7; or
(ii) Executive’s voluntary 's resignation from the Bank’s Holding Company's employ, upon
in the manner set forth below, upon any (A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that appoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
Officer of the Holding Company unless consented to by the Executive, (DB) a material diminution changes in Executive's functions, duties or responsibilities, which would cause Executive's position to become one of lesser responsibility, importance or scope from the budget over which Executive retains authority;
position and attributes described in Section 1, above, unless consented to by the Executive, (EC) a change in the geographic relocation of Executive's principal place of employment by more than 50 miles from its location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
, unless consented to by the Executive, (D) material reduction in the benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement, unless consented to by the Executive, (E) liquidation or dissolution of the Holding Company or its subsidiaries or in the event of any governmental confiscation of the net worth of the Holding Company or its subsidiaries, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementHolding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (3060) days prior written notice given within six full calendar months after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal giving rise to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded said right to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceelect.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company of Executive’s full-time employment hereunder for any reason other than (Atermination governed by Section 5(a) Retirementhereof, Death or Disabilityfor Cause, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the BankHolding Company’s employ, upon
, any (A) a material diminution in failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President, unless consented to by Executive’s base compensation;
, (B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;
responsibilities with the Holding Company or its Subsidiaries, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above, unless consented to by Executive, (C) a requirement that Executive must report relocation of Executive’s principal place of employment by more than 30 miles from its location at the effective date of this Agreement, unless consented to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
by Executive, (D) a material diminution reduction in the budget over which benefits and perquisites to Executive retains authority;
from those being provided as of the effective date of this Agreement, unless consented to by Executive, (E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from Holding Company or the location of Executive’s principal workplace on the date of this Agreement; or
Institution, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementHolding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon not less than sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days six full calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b)8, the Bank Holding Company shall be obligated to pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum an amount equal to the sum of:
(i) the Executive’s earned but unpaid Base Salary and benefitsbonuses, plus in accordance with Sections 3(a) and 3(b), respectively, that would have been paid to Executive for the remaining term of this Agreement had the Event of Termination not occurred; plus
(ii) two (2) times the sum value, as calculated by a recognized firm customarily performing such valuation, of (A) Base Salary and (B) any stock options which as of the highest rate Date of bonus awarded Termination, have been granted to Executive during but are not exercisable by Executive and the value of any restricted stock awards which have been granted to Executive, but in which Executive does not have a non-forfeitable or fully-vested interest as of the Date of Termination; At the election of Executive, which election is to be made prior two (2) years; provided, however, that such to an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoingTermination, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment payments shall be made in a lump sum. In the event that no election is made, payment to Executive will be made on a monthly basis in approximately equal installments during the first day remaining term of the seventh month following Executive’s Separation from ServiceAgreement. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank Holding Company will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical equivalent to the coverage maintained by the Bank Holding Company or its Subsidiaries for Executive prior to his/her termination, provided, however, such medical his termination at no premium cost to Executive. Such coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder expiration of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-remaining term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs within eighteen (18) months following a Change in Control (as defined in Section 5 hereof) or within six (6) months before a Change in Control in contemplation of such Change in Control and with the purpose of avoiding the effective of this Agreement had such Event of Termination occurred after such Change in Control, then Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination of Executive’s employment hereunder by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the Bank’s employemploy upon any of the following, uponunless consented to by Executive:
(A) failure to appoint Executive to the position set forth in Section 1, or a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Bank);
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 25 miles from the location of the Bank’s principal executive offices as of the date of this Agreement;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerBank);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Bank; or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the which termination by Executive shall be an Event of Termination. The Bank shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or may elect to waive said thirty (d30) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal the Base Salary and bonuses that Executive would be entitled to for the eighteen (18) month period commencing on the day after the Termination Date. For purposes of determining the bonus(es) payable hereunder, the bonus(es) will be deemed to be (i) equal to the Executive’s earned but unpaid Base Salary highest bonus paid at any time during the prior three years, and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of otherwise paid at such time as such bonus awarded to Executive during the prior two (2) years; provided, however, that such would have been paid absent an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such payments shall be made paid in a lump sum on the first 30th day of following the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release of his claims against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement (the “Release”), and (ii) the payments and benefits shall begin on the 30th day following the date of the Executive’s Separation from Service, provided that before that date, the Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.
(c) Upon the occurrence of an Event of Termination, the Bank will cause shall pay Executive, or in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, a lump sum cash payment reasonably estimated to be continuedequal to the present value of the contributions that would have been made on the Executive’s behalf under the Bank’s defined contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan maintained by the Bank), as if Executive had continued working for the Bank for an eighteen (18) month period following such Event of Termination, earning the salary that would have been achieved during such period. Such payments shall be paid in a lump sum within thirty (30) days of the Executive’s Separation from Service and shall not be reduced in the event Executive obtains other employment following the Event of Termination.
(d) Upon the occurrence of an Event of Termination, the Bank shall provide, at the Bank’s expense, for an eighteen (18) month period following the Event of Termination, nontaxable medical and dental coverage and life insurance coverage and non-taxable medical and dental insurance coveragesubstantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank for Executive prior to his/her terminationthe Event of Termination, providedexcept to the extent such coverage may be changed in its application to all Bank employees. Notwithstanding the foregoing, howeverif applicable law (including, but not limited to, laws prohibiting discriminating in favor of highly compensated employees), or, if participation by the Executive is not permitted under the terms of the applicable health plans, or if providing such benefits would subject the Bank to penalties, then the Bank shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the value of such non-taxable medical coverage shall cease upon the earlier and dental benefits, with such payment to be made by lump sum within ) business days of (i) twenty-four (24) months from the Date of Termination Termination, or (ii) if later, the date Executive becomes eligible for Medicare coverage, provided further, on which the Bank determines that if Executive is covered by family such insurance coverage (or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of such insurance coverage) cannot be provided for the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessforegoing reasons.
(de) Within thirty (30) days For purposes of Executive’s this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that either no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 12 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of Separation from Service shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under sub-paragraph (b) or (c) of this Section 4 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon in all respects be subject to the terms and conditions stated in Sections 7 and 15.
(a) Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s ' s term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include included any one or more of the following:
: (i) the involuntary termination by the Bank or the Holding Company of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination for Cause as defined in Section 8 7 hereof; or
or (ii) Executive’s voluntary 's resignation from the Bank’s 's employ, upon
upon any (A) a material diminution in Executive’s base compensation;
failure to elect or reelect or to appoint or reappoint Executive Vice President and Treasurer, (B) a material diminution change in Executive’s authority duties 's function duties, or responsibilities;
, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section I, above (and any such material change shall be deemed a continuing breach of this Agreement), (C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic Executive's principal place of employment by more than 30 miles from its location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
(F) any other action , or inaction that constitutes a material breach by reduction in the Bank benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement, (D) liquidation or dissolution of the Bank or Holding Company, or (E) breach of this Agreement by the Bank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed proscribed time frame of an initial event occurrence specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of and the Bank and is are engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), ) and (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good Reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive OfficerBoard;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two three (23) times the sum of (A) annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the three (3) years immediately prior two (2) years; provided, however, that such Event to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceoccurs.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twentythirty-four six (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twentythirty-four six (2436) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twentythirty-four six (2436) month period following his/her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date Date of the Separation from ServiceTermination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during the Executive’s 's term of employment under this Agreement, the provisions of this Section shall apply. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
: (i) the involuntary termination by the Bank Holding Company or its subsidiaries of Executive’s 's full-time employment hereunder for any reason other than (A) Retirement, Death or Disabilitya Change in Control, as defined in Section 7 below5(a) hereof, or (B) Termination for Cause Cause, as defined in Section 8 hereof, retirement in accordance with the Bank's pension plan or Disability as defined in Section 7; or
(ii) Executive’s voluntary 's resignation from the Bank’s Holding Company's employ, upon
in the manner set forth below, upon any (A) a material diminution in failure to elect or appoint Executive as _________ and _____________ of the Holding Company unless consented to by the Executive’s base compensation;
, (B) a material diminution changes in Executive’s authority 's functions, duties or responsibilities;
, which would cause Executive's position to become one of lesser responsibility, importance or scope from the position and attributes described in Section 1, above, unless consented to by the Executive, (C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic Executive's principal place of employment by more than 50 miles from its location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the effective date of this Agreement; or
, unless consented to by the Executive, (D) material reduction in the benefits and perquisites to the Executive from those being provided as of the effective date of this Agreement, unless consented to by the Executive, (E) liquidation or dissolution of the Holding Company or its subsidiaries or in the event of any governmental confiscation of the net worth of the Holding Company or its subsidiaries, or (F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementHolding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), above, Executive shall have the right to elect to terminate his employment under this Agreement by resignation upon not less than sixty (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (3060) days prior written notice given within six full calendar months after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal giving rise to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded said right to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceelect.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Section 6(e) hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President and Chief Lending Officer,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the . The Bank shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (Ai) Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expense, life insurance coverage and non-taxable medical medical, dental and dental insurance coverage, if any, disability coverage substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon the earlier of (i) continue for twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, howeveron the Date of Termination, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service9(b), the Bank shall pay Executive a lump sum payment in an amount equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s (i) 401(k) Plan Plan, (ii) money purchase pension plan, and Employee Stock Ownership Plan (iii) employee stock ownership plan (and any other defined contribution plan maintained by the Bank in which Executive participatesBank) as if she Executive had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service his termination earning his/her actual final rate of the Base Salary as that would have been achieved during the remaining unexpired term of this Agreement (assuming, if a Change in Control has occurred, that the Date annual Base Salary increases under Section 3(a) would apply and, additionally, that such payment would continue for the remaining unexpired term of Termination this Agreement) and as if she had made making the maximum amount of employee contributions permitted, if any, under such plan or plans. Such , where such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually6%.
(e) Notwithstanding anything For purposes of this Agreement, a “Separation from Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (whether as an employee or as an independent contractor) or the level of further services performed will not exceed 49% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, the definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a Specified Employee, as defined in Code Section 409A and any payment to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), be made under subparagraph (B), (C), (D),(Eb) or (Fd) of this Section 6 shall be determined to be subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible) shall not entitle be delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”) would be deemed to any payments include an “excess parachute payment” under Section 6 280G of this agreementthe Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or any successor thereto.
Appears in 1 contract
Samples: Employment Agreement (Brooklyn Federal Bancorp, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s the term of employment under this Agreement, the provisions of this Section 4 shall apply; provided, however, that in the event such Event of Termination occurs within eighteen (18) months following a Change in Control (as defined in Section 5 hereof) or within six (6) months before a Change in Control in contemplation of such Change in Control and with the purpose of avoiding the effective of this Agreement had such Event of Termination occurred after such Change in Control, then Section 5 shall apply instead. As used in this Agreement, an “Event of Termination” ’’ shall mean and include any one or more of the following:
(i) the involuntary termination of Executive’s employment hereunder by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (A) Retirementin connection with or following a Change in Control), Death Section 6 (due to Disability or Disabilitydeath), as defined in Section 7 below(due to Retirement), or (B) Termination for Cause as defined in Section 8 hereof(for Cause), provided that such termination constitutes a “Separation from Service” within the meaning of Section 409A of the Internal Revenue Code (“Code”); or
(ii) Executive’s voluntary resignation from the Bank’s employemploy upon any of the following, uponunless consented to by Executive:
(A) failure to appoint Executive to the position set forth in Section 1, or a material diminution change in Executive’s base compensationfunction, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Bank);
(B) a material diminution in relocation of Executive’s authority duties or responsibilitiesprincipal place of employment to a location that is more than 25 miles from the location of the Bank’s principal executive offices as of the date of this Agreement;
(C) a requirement material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that Executive must report is part of a reduction in pay or benefits that is generally applicable to a corporate officer officers or employee instead employees of reporting directly to the President and Chief Executive OfficerBank);
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Bank; or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses clause (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her Executive's employment under this Agreement by resignation for “Good Reason” upon sixty not less than thirty (6030) days prior written notice given within a reasonable period of time (not to exceed ninety (90) days days) after the initial event giving rise to said the right to elect; provided, however that the which termination by Executive shall be an Event of Termination. The Bank shall have at least thirty (30) days to cure such the condition and provided that Executive actually terminates employment within two years after giving rise to the initial occurrence Event of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereofTermination, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or may elect to waive said thirty (d30) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offerorday period.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her Executive's subsequent death, his/her Executive's beneficiary or beneficiaries, or his/her Executive's estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal the Base Salary and bonuses that Executive would be entitled to for the eighteen (18) month period commencing on the day after the Termination Date. For purposes of determining the bonus(es) payable hereunder, the bonus(es) will be deemed to be (i) equal to the Executive’s earned but unpaid Base Salary highest bonus paid at any time during the prior three years, and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of otherwise paid at such time as such bonus awarded to Executive during the prior two (2) years; provided, however, that such would have been paid absent an Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderTermination. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment Such payments shall be made paid in a lump sum on the first 30th day of following the seventh month following Executive’s Separation from Service. Such payment Service (within the meaning of Section 409A of the Code) and shall not be reduced in the event Executive obtains other employment following the Event of Termination. Notwithstanding the foregoing, Executive shall not be entitled to any payments or benefits under this Section 4 unless and until (i) Executive executes a release of Executive's claims against the Bank, the Company and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the employment relationship, including claims under the Age Discrimination in Employment Act, but not including claims for benefits under tax-qualified plans or other benefit plans in which Executive is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the termination of this Agreement (the “Release”), and (ii) the payments and benefits shall begin on the 30th day following the date of the Executive’s Separation from Service, provided that before that date, the Executive has signed (and not revoked) the Release and the Release is irrevocable under the time period set forth under applicable law.
(c) Upon the occurrence of an Event of Termination, the Bank will cause shall pay Executive, or in the event of Executive's subsequent death, Executive's beneficiary or beneficiaries, or Executive's estate, as the case may be, a lump sum cash payment reasonably estimated to be continuedequal to the present value of the contributions that would have been made on the Executive’s behalf under the Bank’s defined contribution plans (e.g., 401(k) Plan, ESOP, and any other defined contribution plan maintained by the Bank), as if Executive had continued working for the Bank for an eighteen (18) month period following such Event of Termination, earning the salary that would have been achieved during such period. Such payments shall be paid in a lump sum within thirty (30) days of the Executive’s Separation from Service and shall not be reduced in the event Executive obtains other employment following the Event of Termination.
(d) Upon the occurrence of an Event of Termination, the Bank shall provide, at the Bank’s expense, for an eighteen (18) month period following the Event of Termination, nontaxable medical and dental coverage and life insurance coverage and non-taxable medical and dental insurance coveragesubstantially comparable, if anyas reasonably available, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, however, that, except to the extent Executive is a “Specified Employee” as defined such coverage may be changed in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal its application to the present value of the all Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. The provisions of this Section shall in all respects be subject to the terms and conditions stated in Sections 7 and 13.
(a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s 's full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 5 below, or (B) Termination for Cause as defined in Section 8 6 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s 's employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Senior Vice President of the Bank,
(B) a material diminution change in Executive’s authority duties 's function, duties, or responsibilities;, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1 above,
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive's principal place of employment by more than 30 miles from its location at the President and Chief Executive Officer;effective date of this Agreement,
(D) a material diminution in liquidation or dissolution of the budget over which Executive retains authority;Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive, or
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date material breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), ) or (E) or (F), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety four (904) days calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FE) above.
(iii) (A) Executive’s 's involuntary termination by the Bank (other than Termination for Cause) or voluntary resignation from the Bank's employ on the effective date of, or at any time following, a Change in ControlControl during the term of this Agreement, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) aboveincluding extensions thereof. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 1(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ ' Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “"HOLA”") as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 2535% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s any employee stock ownership benefit plan or trusttrust maintained by the Bank or the Company; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided PROVIDED that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall bebe considered, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the then current management Board of Directors of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class common stock of securities then subject to the plan Company are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 2535% or more of the voting securities of the Company and the shareholders owning beneficially or of record 2535% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 4(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b)7(b) or, if different, within the time frame set forth in any sub-paragraph below, the Bank shall pay Executivepay, provide or credit to Executive (or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, ):
(i) his earned but unpaid salary as of the date of termination of employment with the Bank;
(ii) as severance pay or liquidated damages, or both, a lump sum equal to (i) the Executive’s earned but unpaid Base Salary and benefitsgreater of the payments due for the remaining term of the Agreement, plus (ii) or two (2) times the sum highest annual rate of (A) Base Salary and (B) the highest rate of bonus awarded paid to Executive during the prior two at any time under this Agreement within sixty (260) years; provided, however, that such Event days of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day termination of the seventh month following Executive’s Separation from Serviceemployment. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon Notwithstanding the occurrence preceding paragraphs of an Event of Terminationthis Section, in the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of event that:
(i) twenty-four the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (24the "Termination Benefits") months from would be deemed to include an "excess parachute payment" under Section 280G of the Date of Termination Code or any successor thereto, and
(ii) if such Termination Benefits were reduced to an amount (the date Executive becomes eligible for Medicare coverage"Non-Triggering Amount"), provided further, that if Executive the value of which is covered by family coverage one dollar ($1.00) less than an amount equal to the total amount of payments permissible under Section 280G of the Code or coverage for herself and a spouseany successor thereto, then the Executive’s family or spouse shall continue Termination Benefits to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, paid to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) so reduced so as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the shortNon-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallyTriggering Amount.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (First Federal Banc of the Southwest Inc)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponupon any
(A) a material diminution in Executive’s base compensation;failure to elect or reelect or to appoint or reappoint Executive as Executive Vice President,
(B) a material diminution change in Executive’s authority duties function, duties, or responsibilities;, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(C) a requirement liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that Executive must report to a corporate officer or employee instead are caused by reorganizations that do not affect the status of reporting directly to the President and Chief Executive Officer;Executive,
(D) a material diminution reduction in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location Executive’s annual compensation or benefits or relocation of Executive’s principal workplace on place of employment by more than 25 miles from its location as of the date of this Agreement; , or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days four calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) E), above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank’s or the Company’s (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A6(a)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company’s mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum within thirty (230) years; provideddays after the Date of Termination, however, that such Event or in the event Section 409A of Termination must qualify as a “Separation from Service” as defined in the Internal Revenue Code (the “Code”) applies, (see Section 409A and the regulations thereunder. Notwithstanding the foregoing23) , to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on no later than the first day of the seventh month following Executive’s Separation from Servicethe Date of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for the Executive prior to his/her his termination, providedsubject to any insurance carrier imposed limitations. In such event of carrier imposed limitations, however, such medical the Bank shall make a “best efforts” attempt to substitute similar individual coverage. Such coverage shall cease upon the earlier of continue for twelve (i) twenty-four (2412) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period orand, in the case event of a Change in Control as defined in Section 6(a)(iii), such coverage shall continue for thirty six (36) months from the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessDate of Termination.
(d) Within thirty (30) days Upon the occurrence of Executive’s Separation from Service in connection with an Event of Termination (providedTermination, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A6(iii), and such earlier payment would trigger penalties under Code on the Date of Termination, as defined in Section 409A9(b), then such payment all stock options granted to Employee by the Company shall be made on the first day of the seventh month following Executive’s Separation from Service)exercisable in full, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary effective as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Servicetermination and all restricted stock awards then outstanding shall be fully vested, compounded annuallybe deemed earned and non-forfeitable and be free of restrictions.
(e) Notwithstanding anything the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (6. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar ($1.00) less than an amount equal to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any total amount of payments permissible under Section 6 280G of this agreementthe Code or any successor thereto.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s 's term of employment under this Agreement. As used in this Agreement, an “"Event of Termination” " shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank or the Company of Executive’s 's full-time employment hereunder for any reason other than (A) Disability or Retirement, Death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or
(ii) Executive’s voluntary 's resignation from the Bank’s 's employ, uponupon any:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties failure to elect or responsibilities;
(C) a requirement that reelect or to appoint or reappoint Executive must report to a corporate officer or employee instead of reporting directly to the as President and Chief Executive Officer;
(DB) a material diminution change in Executive's function, duties, or responsibilities, which change would cause Executive's position to become one of lesser responsibility, importance, or scope from the budget over which Executive retains authorityposition and attributes thereof described in Section 1, above;
(EC) a change liquidation or dissolution of the Bank or Company other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive;
(D) reduction in the geographic location at which Executive must perform his/her duties that is Executive's annual compensation or benefits or relocation of Executive's principal place of employment by more than twenty-five (25) 25 miles from the its location as of Executive’s principal workplace on the date of this Agreement; or
(FE) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this AgreementBank. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (FE), above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety four (904) days calendar months after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) E), above.
(iii) (A) Executive’s 's involuntary termination by the Bank (other than Termination for Cause) or the Company on the effective date of, or at any time following, a Change in Control, or (B) Executive’s 's resignation from employment with the Bank or the Company following a Change in Control as a result of the Bank's (or any successor thereto) failure to renew or extend this Agreement, or (C) Executive's resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (FE) above. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0000 (the “Exchange Act”xxx "Xxxxxxxx Xxx"); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “"person” " (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “"beneficial owner” " (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s 's outstanding securities, except for any securities purchased by the Bank’s 's employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “"Incumbent Board”") cease for any reason to constitute at least a majority thereof, provided PROVIDED that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s 's stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred upon the conversion of the Company's mutual holding company parent to stock form, or in connection with any reorganization used to effect such a conversion.
(b) Upon the occurrence of an Event of Termination within thirty Termination, as defined in Section 6(a)(i), (30ii) days after or (iii), on the Date of Termination, as defined in Section 9(b), ) the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, his earned but unpaid salary as of the Date of Termination of employment with the Bank and a sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive's Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two three years. Any payments hereunder shall be made in a lump sum within thirty (230) years; provideddays after the Date of Termination, however, that such Event or in the event Section 409A of Termination must qualify as a “Separation from Service” as defined in the Internal Revenue Code (“the "Code”") Section 409A and the regulations thereunder. Notwithstanding the foregoingapplies, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on no later than the first day of the seventh month following Executive’s Separation from Servicethe Date of Termination. Such payment payments shall not be reduced in the event Executive obtains other employment following Separation from Servicetermination of employment.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continuedcontinued life, at the Bank’s expensemedical, life insurance dental and disability coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage shall cease upon continue at the earlier of Bank's expense for thirty-six (i) twenty-four (2436) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is lessTermination.
(d) Within thirty Notwithstanding the preceding paragraphs of this Section 6 in the event that the aggregate payments or benefits to be made or afforded to Executive under this Section, (30the "Termination Benefits") days would be deemed to include an "excess parachute payment" under Section 280G of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409Aor any successor thereto, then such payment shall Termination Benefits will be made on reduced to an amount (the first day of the seventh month following Executive’s Separation from Service"Non-Triggering Amount"), the Bank shall pay Executive a lump sum value of which is one dollar ($1.00) less than an amount equal to the present value total amount of payments permissible under Section 280G of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and Code or any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annuallysuccessor thereto.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Company or the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death Disability or Disability, Retirement (as defined in Section 7 below), or (B) Termination termination for Just Cause as defined in Section 8 hereof, provided that such termination of employment constitutes a “Separation from Service” within the meaning of Code Section 409A and the Treasury Regulations thereunder; or
(ii) Executive’s voluntary resignation from the Company’s or Bank’s employ, uponupon any
(A) failure to elect or reelect or to appoint or reappoint Executive as the Chief Financial Officer (CFO), or a material diminution change in Executive’s base compensation;function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above,
(B) a material diminution in liquidation or dissolution of the Company or the Bank other than liquidations or dissolutions that are caused by reorganizations that do not affect the status of Executive’s authority duties or responsibilities;, or
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date breach of this Agreement; or
(F) any other action or inaction that constitutes a material breach Agreement by the Bank of this AgreementCompany. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), C) above, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty thirty (6030) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank . The Company shall have at least thirty (30) days to cure such condition and the conditions giving rise to the Event of Termination, provided that Executive actually terminates employment within two years after the initial occurrence of Bank may elect to waive such event30 day period. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the BankCompany, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank Company and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (FC) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeof employment pursuant to Section 6(a)(i) on the effective date of, or Section 6(a)(ii) of this Agreement at any time following, a Change in Control, or (B) Executive’s resignation from employment with Control during the Bank or the Company (or any successor thereto) following a Change in Control as a result term of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovethis Agreement. For these purposes, a Change in Control of the Bank Company or the Company Bank shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Bank Holding Company Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLABHCA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effectedimplemented; or (d) a proxy statement soliciting proxies from stockholders of the CompanyCompany is distributed, by someone other than the current management of the Company is distributedCompany, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after Termination, on the Date of Termination, as defined in Section 9(b), the Bank Company and/or its subsidiaries shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, within sixty (60) days a lump sum equal to three (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (23) times the sum of (Ai) Executive’s Base Salary and (Bii) the highest rate of bonus awarded to Executive during the prior two (2) three years; provided, howeveror if the event of termination occurs on or before January 31, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and 2016, the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Servicetarget bonus award opportunity for 2015.
(c) Upon the occurrence of an Event of Termination, the Bank Company and/or its subsidiaries will cause to be continued, at the BankCompany’s sole expense, life insurance, and nontaxable medical, dental and disability insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Company and/or the Bank for Executive prior to his/her his termination, provided, however, such medical . Such coverage or payment shall cease upon the earlier of continue for thirty-six (i) twenty-four (2436) months from the Date of Termination Termination. If the Company or (iiits subsidiaries cannot provide one or more of the benefits set forth in this Section 6(c) the date Executive becomes eligible for Medicare coverage, provided further, that if because Executive is covered by family coverage no longer an employee, applicable rules and regulations prohibit such benefits or coverage for herself and a spousethe payment of such benefits in the manner contemplated, or it would subject the Company or its subsidiaries to penalties, then the Company shall pay the Executive a cash lump sum payment reasonably estimated to be equal to the value of such benefits or the value of the remaining benefits at the time of such determination. Such cash payment shall be made in a lump sum within sixty (60) days after the later of the Executive’s family Date of Termination or spouse shall continue to be covered for the remainder effective date of the twenty-four (24) month period or, in rules or regulations prohibiting such benefits or subjecting the case of the spouse, until the spouse becomes eligible for Medicare coverage Company or obtains healthcare coverage elsewhere, whichever period is lessits subsidiaries to penalties.
(d) Within thirty Upon the occurrence of any Event of Termination, the Company and/or its subsidiaries shall pay the Executive within sixty (3060) days a lump sum payment in an amount equal to the excess, if any, of: (A) the present value of Executivethe benefits to which he would be entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) if he had the additional years of service that he would have had if he had continued working for the Company for a thirty-six (36) month period following his termination earning the salary that would have been paid during the remaining unexpired term of this Agreement (assuming, if a Change in Control as defined in Section 6(a)(iii) has occurred, that the annual Base Salary under Section 3(a) continues for the remaining unexpired term of this Agreement), determined as if each such plan had continued in effect without change in accordance with its terms as of the day prior to his actual date of his termination and as if such benefits were payable beginning on the first day of the month coincident with or next following his actual date of his termination, over (B) the present value of the benefits to which he is actually entitled under the Company and/or the Bank’s defined benefit pension plan (and any other defined benefit plan maintained by the Company and/or the Bank) as of the date of his termination, where such present values are to be determined using a discount rate of 6% and the mortality tables prescribed under Code Section 72.
(e) For purposes of this Agreement, a “Separation from Service in connection with an Service” shall have occurred if the Bank and Executive reasonably anticipate that no further services will be performed by the Executive after the date of the Event of Termination (providedwhether as an employee or as an independent contractor) or the level of further services performed is less than 50% of the average level of bona fide services in the 36 months immediately preceding the Event of Termination. For all purposes hereunder, however, that, to the extent definition of “Separation from Service” shall be interpreted consistent with Treasury Regulation Section 1.409A-1(h)(ii). If Executive is a “Specified Employee” , as defined in Code Section 409A, 409A and such earlier any payment would trigger penalties to be made under this Section 6 is subject to Code Section 409A, then if required by Code Section 409A, such payment or a portion of such payment (to the minimum extent possible taking into consideration Treasury Regulation Section 1.409A-1(b)(9)(iii)) shall be made delayed and shall be paid on the first day of the seventh month following Executive’s Separation from Service.
(f) Notwithstanding the preceding paragraphs of this Section, in the event that the aggregate payments or benefits to be made or afforded to Executive under said paragraphs (the “Termination Benefits”), either as a stand-alone benefit or when aggregated with other payments to, or for the benefit of, Executive (collectively referred as of the Change in Control Benefits”) would be deemed to include an “excess parachute payment” under Section 280G of the Code or any successor thereto, then such Termination Benefits shall be reduced by the minimum amount necessary so that the Change in Control Benefits that are payable to Executive are not subject to penalties under Code Sections 280G and 4999.
(g) Executive shall not be entitled to any payments or benefits under this Section 6 unless and until the Executive executes a release of his claims against the Company, the Bank shall pay Executive a lump sum equal and any affiliate, and their officers, directors, successors and assigns, releasing said persons from any and all claims, rights, demands, causes of action, suits, arbitrations or grievances relating to the present value of employment relationship, including claims under the Bank’s contributions that would have been made on his/her behalf Age Discrimination in Employment Act (“ADEA”), but not including claims for benefits under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any tax-qualified plans or other defined contribution plan maintained by the Bank benefit plans in which Executive participates) as if she had continued working is vested, claims for benefits required by applicable law or claims with respect to obligations set forth in this Agreement that survive the Bank for a twenty-four (24) month period following his/her termination of this Agreement. In order to comply with the requirements of Code Section 409A and the ADEA, the release shall be provided to Executive no later than the date of his Separation from Service earning his/her actual final rate of Base Salary as and Executive shall have no fewer than twenty-one (21) days to consider the release, and following Executive’s execution of the Date of Termination and as if she had made release, Executive shall have seven (7) days to revoke said release. Notwithstanding the maximum amount of employee contributions permittedforegoing, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (Fthis Section 6(g) shall not entitle Executive apply in the event of the Executive’s Event of Termination pursuant to any payments under Section 6 of this agreement6(a)(iii) hereof.
Appears in 1 contract
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement, the provisions of this Section 4 shall apply. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than termination governed by Section 5 (ATermination for Cause) Retirement, Death or Disability, as defined in termination governed by Section 6 (Termination for Disability or death) or termination governed by Section 7 below, or (B) Termination for Cause as defined in Section 8 hereofUpon Retirement); or
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for any of the following reasons:
(A) a material diminution in Executive’s base compensationthe failure to appoint or reappoint Executive to the position set forth under Section 1;
(B) a material diminution change in Executive’s authority duties functions, duties, or responsibilitiesresponsibilities with the Bank, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and attributes thereof described in Section 1, above;
(C) a requirement that Executive must report to a corporate officer or employee instead relocation of reporting directly to Executive’s principal place of employment by more than forty-five (45) miles from its location at the President and Chief Executive OfficerEffective Date of this Agreement;
(D) a material diminution reduction in the budget over which benefits and perquisites to Executive retains authorityfrom those being provided as of the later of the Effective Date or any subsequent Anniversary Date of this Agreement, other than an employee-wide reduction in pay or benefits;
(E) a change in liquidation or dissolution of the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this AgreementBank; or
(F) any other action or inaction that constitutes a material breach of this Agreement by the Bank of this Agreementor the Holding Company. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty not less than thirty (6030) days prior written notice Notice of Termination, as defined in Section 9(a), given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 solely by virtue of the fact that Executive has submitted his/her resignation but resignation, provided Executive has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) above.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Causeor any successor thereto) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from the employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A4(a)(ii)(A), (B), (C), (D), (E) or (F) above. For these purposes, a “Change in Control of the Bank or the Company Control” shall mean a change in control of the Bank or, its holding company as of the date hereof (the “Holding Company”) of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) ), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Holding Company or Bank representing 25% or more of the combined voting power of the Holding Company’s or Bank’s outstanding securities, securities except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board of Directors of the Bank or the Holding Company on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters a majority of the directors comprising of the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Holding Company or similar transaction in which the Bank or Holding Company is not the surviving institution occurs or is effectedoccurs; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in necessary to comply with Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment “Change in Control” shall be made on instead have the first day of the seventh month following Executive’s Separation from Service), the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from Service, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s resignation for any reason other than those meaning set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) Code Section 409A and the regulations and other guidance published thereunder; and provided further that a Change in Control shall not entitle Executive be deemed to any payments under Section 6 have occurred solely as a result of this agreementthe conversion of the Holding Company’s mutual holding company parent to stock form or a reorganization used to effect such a conversion.
Appears in 1 contract
Samples: Employment Agreement (Ben Franklin Financial, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her duties that is more than twenty-five (25) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her subsequent death, his/her beneficiary or beneficiaries, or his/her estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunder. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Serviceoccurs.
(c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she had continued working for the Bank for a twenty-four (24) month period following his/her Separation from Service Date of Termination earning his/her actual final rate of Base Salary as of the Date of Termination and as if she had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION. (a) The provisions of this Section 6 shall apply upon the occurrence of an Event of Termination (as herein defined) during Executive’s term of employment under this Agreement. As used in this Agreement, an “Event of Termination” shall mean and include any one or more of the following:
(i) the involuntary termination by the Bank of Executive’s full-time employment hereunder for any reason other than (A) Retirement, Death death or Disability, as defined in Section 7 below, or (B) Termination for Cause as defined in Section 8 hereof; or.
(ii) Executive’s voluntary resignation from the Bank’s employ, uponemploy for “Good Reason.” Good reason shall mean:
(A) a material diminution in Executive’s base compensation;
(B) a material diminution in Executive’s authority duties or responsibilities;
(C) a requirement that Executive must report to a corporate officer or employee instead of reporting directly to the President and Chief Executive Officer;
(D) a material diminution in the budget over which Executive retains authority;
(E) a change in the geographic location at which Executive must perform his/her his duties that is more than twenty-five fifty (2550) miles from the location of Executive’s principal workplace on the date of this Agreement; or
(F) any other action or inaction that constitutes a material breach by the Bank of this Agreement. Upon the occurrence of any event described in clauses (ii) (A), (B), (C), (D), (E) or (F), aboveabove that constitutes Good Reason, Executive shall have the right to elect to terminate his/her his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial following an event giving rise to said right to elect; constituting Good Reason, provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that Executive actually terminates employment within two years after the initial occurrence of such eventcondition. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, Executive, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his/her his rights solely under this Agreement and this Section 6 by virtue of the fact that Executive has submitted his/her his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in clauses (A), (B), (C), (D), (E) or (F) aboveconstituting Good Reason.
(iii) (A) Executive’s involuntary termination by the Bank (other than Termination for Cause) on the effective date of, or at any time following, a Change in Control, or (B) Executive’s resignation from employment with the Bank or the Company (or any successor thereto) following a Change in Control as a result of any event described in Section 6(a)(ii)(A), (B), (C), (D), (E) or (F) abovefor Good Reason. For these purposes, a Change in Control of the Bank or the Company shall mean a change in control of a nature that: (i) would be required to be reported in response to Item 5.01 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder (collectively, the “HOLA”) as in effect at the time of the Change in Control; or (iii) without limitation such a Change in Control shall be deemed to have occurred at such time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of Company’s outstanding securities, except for any securities purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he or she were a member of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of all or substantially all the assets of the Bank or the Company or similar transaction in which the Bank or Company is not the surviving institution occurs or is effected; or (d) a proxy statement soliciting proxies from stockholders of the Company, by someone other than the current management of the Company is distributed, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Company or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are exchanged for or converted into cash or property or securities not issued by the Company; or (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially or of record 25% or more of the outstanding securities of the Company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.
(b) Upon the occurrence of an Event of Termination , other than an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his/her his subsequent death, his/her his beneficiary or beneficiaries, or his/her his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) one (1) times the Executive’s annualized Base Salary. In addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twelve (12) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twelve (12) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(c) Upon the occurrence of an Event of Termination under Section 6(a)(iii) following a Change in Control, within thirty (30) days after the Date of Termination, as defined in Section 9(b), the Bank shall pay Executive, or, in the event of his subsequent death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or liquidated damages, or both, a sum equal to (i) the Executive’s earned but unpaid Base Salary and benefits, plus (ii) two (2) times the sum of (A) Executive’s annualized Base Salary and (B) the highest rate of bonus awarded to Executive during the prior two (2) years; provided, however, that such Event years immediately prior to the year in which the Executive’s Date of Termination must qualify as a “Separation from Service” as defined in Internal Revenue Code (“Code”) Section 409A and the regulations thereunderoccurs. Notwithstanding the foregoing, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service. Such payment shall not be reduced in the event Executive obtains other employment following Separation from Service.
(c) Upon the occurrence of an Event of TerminationIn addition, the Bank will cause to be continued, at the Bank’s expense, life insurance coverage and non-taxable medical and dental insurance coverage, if any, substantially identical to the coverage maintained by the Bank for Executive prior to his/her his termination, provided, however, such medical coverage shall cease upon the earlier of (i) twenty-four (24) months from the Date of Termination or (ii) the date Executive becomes eligible for Medicare coverage, provided further, that if Executive is covered by family coverage or coverage for herself and a spouse, then the Executive’s family or spouse shall continue to be covered for the remainder of the twenty-four (24) month period or, in the case of the spouse, until the spouse becomes eligible for Medicare coverage or obtains healthcare coverage elsewhere, whichever period is less. Notwithstanding anything herein to the contrary, if as the result of any change in, or interpretation of, the laws applicable to the continued welfare benefits hereunder, such benefits are deemed illegal or subject to penalties, then the Bank shall, to the extent permitted under such laws, pay to the Executive a cash lump sum payment reasonably estimated to be equal to the amount of welfare benefits (or the remainder of such amount) that the Executive is no longer permitted to receive in-kind. Such lump sum payment shall be required to be made no later than two and one-half months following the Executive’s Date of Termination, or if later, within two and one-half months following a determination that such payment would be illegal or subject to penalties.
(d) Within thirty (30) days of Executive’s Separation from Service Date of Termination in connection with an Event of Termination (provided, however, that, to the extent Executive is a “Specified Employee” as defined in Code Section 409A, and such earlier payment would trigger penalties under Code Section 409A, then such payment shall be made on the first day of the seventh month following Executive’s Separation from Service)Termination, the Bank shall pay Executive a lump sum equal to the present value of the Bank’s contributions that would have been made on his/her his behalf under each of the Bank’s 401(k) Plan and Employee Stock Ownership Plan (and any other tax-qualified defined contribution plan maintained by the Bank in which Executive participates) as if she Executive had continued working for the Bank for a twelve (12) month period (or a twenty-four (24) month period in the event of such termination following his/her Separation from Service a Change in Control) following his Date of Termination earning his/her his actual final rate of Base Salary as of the Date of Termination and as if she Executive had made the maximum amount of employee contributions permitted, if any, under such plan or plans. Such present values are to be determined using a discount rate equal to the short-term Internal Revenue Service’s “applicable federal rate” for the month before the date of the Separation from ServiceDate of Termination, compounded annually.
(e) Notwithstanding anything to the contrary herein, Executive’s voluntary resignation for any reason other than those set forth in clauses 6(a)(ii)(A), (B), (C), (D),(E) or (F) for Good Reason shall not entitle Executive to any payments under Section 6 of this agreementAgreement.
Appears in 1 contract
Samples: Employment Agreement (Kaiser Federal Financial Group, Inc.)
