Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein. (b) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change. (c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements. (d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 5 contracts
Samples: Change in Control Agreement (Abm Industries Inc /De/), Change in Control Agreement (Abm Industries Inc /De/), Change in Control Agreement (Abm Industries Inc /De/)
Severance Compensation. If the Employee's employment is terminated ---------------------- during a Protected Period, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the one year period commencing on the date of the Employee's termination of employment (the "Payment Term") the Company shall:
(i) continue to Section 3(a)(i), 3(a)(iipay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) or 3(a)(iii)hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period; -------------------------------------------------------------------------------- Page 7 --------------------------------------------------------------------------------
(ii) continue the Employee's participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”)bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at a level consistent with the employee's position, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined six (6) month period commencing on the date of termination of employment regardless of the Payment Term; and
(iv) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of -------------------------------------------------------------------------------- Page 8 -------------------------------------------------------------------------------- employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum Employee breaches any of (i) any unpaid Incentive Pay that has been earnedhis obligations under Section 9 or 10 hereof, accrued, allocated no further severance payments or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 5 contracts
Samples: Change of Control Agreement (Sealy Corp), Change of Control Agreement (Sealy Corp), Change of Control Agreement (Sealy Corp)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, determined without regard to Section 3(a)(iSubsection 1(f)(ii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(f)(ii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee’s annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee’s request, submitted in writing to the Company within five (5) business days after the date of the Employee’s termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee’s annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee’s termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee’s payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee’s Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 61 with thirteen years of service.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 3 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. If the Employee's employment is terminated, ---------------------- the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(ii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(ii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 3 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee’s employment is terminated by the Subsidiary without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall cause to be paid and provided to Employee (i) base salary at the Executivehighest monthly rate payable to Employee during the Contract Period through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the “Severance Benefits Termination Date”) and a bonus award accrued for the year in which such termination occurs determined in accordance with the Company’s bonus plan as in effect immediately prior to the Change in Control Date and at a level no less than the target amount thereunder for the year in which such termination occurs; and (ii) the following benefits for a period of twelve months following the Contract Expiration Date:
(A) coverage under the Company’s medical insurance plan, short-term disability plan, long-term disability plan, salary continuation arrangement, disability benefit arrangement, and executive life insurance benefit (provided that she became eligible to participate therein prior to the date her employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or her dependents, as so amended) and each as if Employee’s employment during had continued through the Severance Period other than Benefits Termination Date; and
(B) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which she is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee’s employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of her employment, the Company shall cause the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(B) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will pay be required to cause payment to Employee, from its general assets or those of its Subsidiary, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the Executive amount by which that particular payment under the amounts described Salaried Plan would have been increased if Employee’s total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in Annex A within five business days after these circumstances any payments become due under the Termination Date (subject Salaried Plan with respect to Employee following her death, the provisions of Section 4(d) of this Agreement) and Company will continue be obligated to provide cause similar supplemental payments with respect to Employee to be made on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting Notwithstanding the rights foregoing provisions of the Executive at law or in equityParagraph 12(a), if the Company fails shall cause any benefit to make which Employee becomes entitled pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan or the Excess Benefit Plan including, in the event Employee is not fully vested under the provisions of either, the present value of any otherwise forfeitable benefit thereunder, to be paid in a single sum to Employee as soon as practicable, but not more than thirty days following her termination of employment, with present value determination to be made based on actuarial factors for single sum payments set forth in the Salaried Pension Plan. Employee shall have no duty to mitigate the amount of any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits under Paragraph 12
(a) Employee materially and willfully breaches her agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the applicable planCompany or the Subsidiary substantial and demonstrable damage, program or agreement, after the occurrence of a Change in Control, then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under Paragraph 12(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date or, with respect to avoid accelerated taxation and/or tax penalties benefits, the Contract Expiration Date, and immediately before her death she is entitled to payments or benefits under Section 409AParagraph 12(a), amounts that would otherwise the Company will be payable relieved of its obligations under Paragraph 12(a) with respect to base salary and benefits that would otherwise be provided pursuant to this Agreement during bonus payments as of the six-first day of the month period immediately following the Executive’s termination of employment shall instead be paid on month in which Employee dies and thereafter the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit Company will cause to be provided shall be construed to Employee’s beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as a separate identified payment for purposes supplemented by item (B) of Section 409AParagraph 12(a)), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 12(c)) as if Employee’s death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Subsidiary.
Appears in 3 contracts
Samples: Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/), Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/), Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/)
Severance Compensation. If your employment is terminated either by you with Good Reason within 12 months following a Change of Control, or by the Company without Cause within 3 months preceding or within 12 months following a Change of Control, subject to your executing and delivering to the Company, and not revoking, a release of claims in a form acceptable to the Company (the “Release”) within the 30-day period following your termination of employment:
(a) Ifthe Company will pay you severance in an amount equal to 12 months of your then current annual base salary, plus a pro-rata share of your target annual cash bonus for the calendar year in which the termination occurs (based on the number of calendar days elapsed prior to the effective date of such termination), payable in equal installments over a period of 12 months (the “Severance Period”) in accordance with the Company’s payroll practices, commencing on your termination of employment;
(b) if you have been continuously employed by the Company for less than one year as of the date your employment terminates, the vesting schedule of any equity awards of the Company held by you shall automatically be amended to state that all of the options subject to such equity award(s) scheduled to vest within 12 months of the date of your termination shall immediately accelerate and become fully vested, provided that with respect to any such awards intended to constitute “qualified performance based compensation” under Section 162(m) of the Code, whether a Change of Control has occurred shall be determined without regard to clause (iv) of the definition of Change of Control below;
(c) if you have been continuously employed by the Company for at least one year as of the date your employment terminates, all of the outstanding unvested equity awards of the Company held by you shall become fully vested and, if applicable, exercisable as of the date of your termination, provided that with respect to any such awards intended to constitute “qualified performance based compensation” under Section 162(m) of the Code, whether a Change of Control has occurred shall be determined without regard to clause (iv) of the definition of Change of Control below; and
(d) If you timely elect continued group medical and dental insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse you for a portion of the applicable premiums, based on the then-current cost-sharing rates for active employees, for you and your eligible dependents during the period commencing on the date of your termination of employment and ending on the earliest to occur of (a) the final day of the Severance Period, (b) the date you and/or your eligible dependents are no longer eligible for COBRA, and (c) the date you become eligible to receive medical insurance coverage from a subsequent employer (and you agree to notify the Company of such eligibility). Notwithstanding the foregoing, if the Company determines that it cannot provide such reimbursement of premiums to you without potentially violating applicable law, the Company shall in lieu thereof provide to you a taxable monthly payment in an amount equal to a portion of the applicable premiums, based on then-current cost-sharing rates for active employees, which payment will be made regardless of whether you elect COBRA continuation coverage and will commence in the month following the month in which your termination of employment occurs and end on the earliest to occur of (x) the final day of the Severance Period, (y) the date you and/or your eligible dependents are no longer eligible for COBRA, and (z) the date you become eligible to receive medical insurance coverage from a subsequent employer (and you agree to notify the Company of such eligibility). Notwithstanding anything herein to the contrary, in the event that any compensation or benefit that constitutes “nonqualified deferred compensation” within the meaning of Section 409A (as defined below) becomes payable upon the occurrence of a Change in of Control, the Company terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) such compensation or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any benefit shall not be paid unless such termination, a “Triggering Termination”), provided that such Triggering Termination Change of Control constitutes a “separation from servicechange in control event” as defined in Section 409A, within the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions meaning of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.409A.
Appears in 2 contracts
Samples: Change of Control Severance Agreement (T2 Biosystems, Inc.), Change of Control Severance Agreement (T2 Biosystems, Inc.)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, determined without regard to Section 3(a)(iSubsection 1(f)(ii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(f)(ii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee’s annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period; and
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service with the Company or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 2 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee’s employment is terminated by the Subsidiary without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall cause to be paid and provided to Employee (i) base salary at the Executivehighest monthly rate payable to Employee during the Contract Period through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the “Severance Benefits Termination Date”) and a bonus award accrued for the year in which such termination occurs determined in accordance with the Company’s bonus plan as in effect immediately prior to the Change in Control Date and at a level no less than the target amount thereunder for the year in which such termination occurs; and (ii) the following benefits for a period of twelve months following the Contract Expiration Date:
(A) coverage under the Company’s medical insurance plan, short-term disability plan, long-term disability plan, salary continuation arrangement, disability benefit arrangement, and executive life insurance benefit (provided that he became eligible to participate therein prior to the date his employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or his dependents, as so amended) and each as if Employee’s employment during had continued through the Severance Period other than Benefits Termination Date; and
(B) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which he is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee’s employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of his employment, the Company shall cause the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(B) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will pay be required to cause payment to Employee, from its general assets or those of its Subsidiary, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the Executive amount by which that particular payment under the amounts described Salaried Plan would have been increased if Employee’s total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in Annex A within five business days after these circumstances any payments become due under the Termination Date (subject Salaried Plan with respect to Employee following his death, the provisions of Section 4(d) of this Agreement) and Company will continue be obligated to provide cause similar supplemental payments with respect to Employee to be made on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting Notwithstanding the rights foregoing provisions of the Executive at law or in equityParagraph 12(a), if the Company fails shall cause any benefit to make which Employee becomes entitled pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan or the Excess Benefit Plan including, in the event Employee is not fully vested under the provisions of either, the present value of any otherwise forfeitable benefit thereunder, to be paid in a single sum to Employee as soon as practicable, but not more than thirty days following his termination of employment, with present value determination to be made based on actuarial factors for single sum payments set forth in the Salaried Pension Plan. Employee shall have no duty to mitigate the amount of any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits under Paragraph 12(a) Employee materially and willfully breaches his agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the applicable planCompany or the Subsidiary substantial and demonstrable damage, program or agreement, after the occurrence of a Change in Control, then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under Paragraph 12(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date or, with respect to avoid accelerated taxation and/or tax penalties benefits, the Contract Expiration Date, and immediately before his death he is entitled to payments or benefits under Section 409AParagraph 12(a), amounts that would otherwise the Company will be payable relieved of its obligations under Paragraph 12(a) with respect to base salary and benefits that would otherwise be provided pursuant to this Agreement during bonus payments as of the six-first day of the month period immediately following the Executive’s termination of employment shall instead be paid on month in which Employee dies and thereafter the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit Company will cause to be provided shall be construed to Employee’s beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as a separate identified payment for purposes supplemented by item (B) of Section 409AParagraph 12(a)), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 12(c)) as if Employee’s death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Subsidiary.
Appears in 2 contracts
Samples: Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/), Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/)
Severance Compensation. If the Employee's employment is terminated, ---------------------- the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(iii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(iii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as -------------------------------------------------------------------------------- Page 7 -------------------------------------------------------------------------------- provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and -------------------------------------------------------------------------------- Page 8 --------------------------------------------------------------------------------
5(a) (ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 9 or 10 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 2 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. If the Employee's employment is terminated, ---------------------- the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(iii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(iii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as -------------------------------------------------------------------------------- Page 7 -------------------------------------------------------------------------------- provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and -------------------------------------------------------------------------------- Page 8 --------------------------------------------------------------------------------
(a) (ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 9 or 10 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 2 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee's employment is terminated by the Subsidiary without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall cause to be paid and provided to Employee (i) base salary at the Executive’s employment highest monthly rate payable to Employee during the Contract Period through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the "Severance Period other Benefits Termination Date") and a bonus award accrued for the year in which such termination occurs determined in accordance with the Company's bonus plan as in effect immediately prior to the Change in Control Date and at a level no less than the target amount thereunder for the year in which such termination occurs; and (ii) the following benefits for a period of twelve months following the Contract Expiration Date:
(A) coverage under the Company's medical insurance plan, short-term disability plan, long-term disability plan, salary continuation arrangement, disability benefit arrangement, and executive life insurance benefit (provided that [he][she] became eligible to participate therein prior to the date [his][her] employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or [his][her] dependents, as so amended) and each as if Employee's employment had continued through the Severance Benefits Termination Date; and
(B) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which [he][she] is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee's employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of [his][her] employment, the Company shall cause the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(B) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will pay be required to cause payment to Employee, from its general assets or those of its Subsidiary, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the Executive amount by which that particular payment under the amounts described Salaried Plan would have been increased if Employee's total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in Annex A within five business days after these circumstances any payments become due under the Termination Date (subject Salaried Plan with respect to Employee following [his][her] death, the provisions of Section 4(d) of this Agreement) and Company will continue be obligated to provide cause similar supplemental payments with respect to Employee to be made on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting Notwithstanding the rights foregoing provisions of the Executive at law or in equityParagraph 12(a), if the Company fails shall cause any benefit to make which Employee becomes entitled pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan or the Excess Benefit Plan including, in the event Employee is not fully vested under the provisions of either, the present value of any otherwise forfeitable benefit thereunder, to be paid in a single sum to Employee as soon as practicable, but not more than thirty days following [his][her] termination of employment, with present value determination to be made based on actuarial factors for single sum payments set forth in the Salaried Pension Plan. Employee shall have no duty to mitigate the amount of any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits under Paragraph 12
(a) Employee materially and willfully breaches [his][her] agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the applicable planCompany or the Subsidiary substantial and demonstrable damage, program or agreement, after the occurrence of a Change in Control, then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under Paragraph 12(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date or, with respect to avoid accelerated taxation and/or tax penalties benefits, the Contract Expiration Date, and immediately before [his][her] death [he][she] is entitled to payments or benefits under Section 409AParagraph 12(a), amounts that would otherwise the Company will be payable relieved of its obligations under Paragraph 12
(a) with respect to base salary and benefits that would otherwise be provided pursuant to this Agreement during bonus payments as of the six-first day of the month period immediately following the Executive’s termination of employment shall instead be paid on month in which Employee dies and thereafter the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit Company will cause to be provided shall be construed to Employee's beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as a separate identified payment for purposes supplemented by item (B) of Section 409AParagraph 12(a)), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 12(c)) as if Employee's death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Subsidiary.
Appears in 2 contracts
Samples: Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/), Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/)
Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company terminates shall terminate the Executive’s Employee's employment during the Severance Period of Employment other than pursuant to Section 3(a)(i), 3(a)(ii4(a) or 3(a)(iii)hereof, or if the Executive terminates Executive’s Employee shall terminate his employment pursuant to Section 3(b4(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Ahereof, the Company will shall pay to the Executive Employee the amounts described amount specified in Annex A Section 5(a)(i) hereof within five ten business days after the date (the Termination Date) that the Employee's employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Employee if the termination is pursuant to Section 4(b) hereof):
i) In lieu of any further payments to the Employee for periods subsequent to the Termination Date, but without affecting the rights of the Employee referred to in Section 5(b) hereof, a lump sum payment (the Severance Payment) in an amount equal to the present value (using a discount rate required to be utilized for purposes of computations under Section 280G of the Code or any successor provision thereto, or if no such rate is so required to be used, a rate equal to the then-applicable interest rate prescribed by the Pension Benefit Guarantee Corporation for benefit valuations in connection with non-multiemployer pension plan terminations assuming the immediate commencement of benefit payments (the Discount Rate) of the sum of (A) the Base Pay (at the highest rate in effect during the Term prior to the Termination Date) for one year, plus (B) the Incentive Pay for one year (based upon the greatest amount of Incentive Pay paid or payable to the Employee for any year during the three calendar years preceding the year in which the Termination Date occurs); provided, however, that in no event will the present value (as determined under Section 280G of the Code or any successor provision thereto) of the amount otherwise payable hereunder, when added to the present value (as determined under Section 280G of the Code or any successor provision thereto) of any other parachute payments (as that term is defined in Section 280G of the Code (without regard to Section 280G(b)(2)(A)(ii) thereof) or any successor provision thereto) from the Company, exceed an amount (the A299% Amount) equal to 299% of the Employee's base amount (as that term is defined in Section 280G of the Code or any successor provision thereto) and if the amount otherwise payable hereunder would exceed the 299% Amount, the Severance Payment shall be reduced to the extent necessary so that the aggregate present value determined in the previous clause does not exceed the 299% Amount.
ii) The determination of whether any amount otherwise payable under Section 5(a)(i) causes the 299% Amount to be exceeded shall be made, if requested by the Employee or the Company, by tax counsel selected by the Company and reasonably acceptable to the Employee. The costs of obtaining such determination shall be borne by the Company. The fact that the Employee shall have his right to the Severance Payment reduced as a result of the existence of the limitations contained in this Section 5(a) shall not limit or otherwise affect any rights of the Employee to any Employee Benefit, or other right arising other than pursuant to this Agreement. Without limiting the generality of the foregoing, upon the Employee's termination of employment as provided in this Section 5, the Company shall pay over to him all vested benefits to which he is entitled under and in accordance with the terms of the Company's employee savings, stock ownership, supplemental executive retirement and similar Plans in the event such payments are not otherwise made in accordance with the terms of such plans.
iii) Except to the extent that the payments or benefits pursuant to this Section 5(a)(iii) would result in a reduction of the amount of the Severance Payment because they would exceed the 299% Amount, (A) for the remainder of the Period of Employment the Company shall arrange to provide the Employee with Employee Benefits substantially similar to those which the Employee was receiving or entitled to receive immediately prior to the Termination Date (subject and if and to the provisions extent that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Company solely due to the fact that the Employee is no longer an officer or employee of the Company, then the Company shall itself pay or provide for the payment to the Employee, his dependents and beneficiaries, such Employee Benefits) and (B) without limiting the generality of the foregoing, the remainder of the Period of Employment shall be considered service with the Company for the purpose of service credits under the Company's retirement income, supplemental executive retirement and other benefit plans of the Company applicable to the Employee or his beneficiaries immediately prior to the Termination Date. Without otherwise limiting the purposes or effect of Section 4(d6 hereof, Employee Benefits payable to the Employee pursuant to this Section 5(a)(iii) by reason of any welfare benefit plan of the Company (as the term welfare benefit plan is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Employee from another employer during such period following the Employee's Termination Date until the expiration of the Period of Employment.
iv) Notwithstanding any provision of the Section 5(a) to the contrary, in the event the benefits intended to be provided to the Employee pursuant to Section 5(a)(iii) hereof are required to be reduced in whole or in part because the value of such Employee Benefits, when added to the amount of the Severance Payment under Section 5(a)(i), would exceed 299% Amount, the Employee shall have the option to elect to receive, in lieu of all or a portion of the Severance Payment provided in Section 5(a)(i) hereof, one or more Employee Benefits, provided that (A) prior to the receipt of any payment under Section 5(a)(i) hereof, the Employee notifies the Company of the Employee Benefit or Employee Benefits so elected to be received, and (B) in no event shall the aggregate present value of the payments in the nature of compensation (as that phrase is used in Section 280G of the Code) received by the Employee as a result of the receipt of such Employee Benefits, when added to the remaining portion of the Severance Payment, if any, to be received by the Employee, exceed the 299% Amount.
v) In addition to all other compensation due to the Employee, the following shall occur immediately following the occurrence of a Change in Control:
A) all Company stock options held by the Employee prior to a Change in Control shall become fully exercisable, regardless of whether or not the vesting conditions set forth in the relevant stock option agreements have been satisfied in full; and
B) all restrictions on any restricted Company stock granted to the Employee prior to a Change in Control shall be removed and the stock shall be freely transferable, regardless of whether the conditions set forth in the relevant restricted stock agreements have been satisfied in full.
b) Upon written notice given by the Employee to the Company prior to the receipt of any payment pursuant to Section 5(a) hereof, the Employee, at his sole option, without reduction to reflect the present value of such amounts as aforesaid, may elect to have all or any of the Severance Payment payable pursuant to Section 5(a)(i) hereof paid to him on a quarterly or monthly basis during the remainder of the Period of Employment.
c) There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payment to or benefit for the Employee provided for in this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(bd) Without limiting the rights of the Executive Employee at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will shall pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, then-applicable Discount Rate or, if lesslesser, the maximum highest rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changeallowed by applicable usury laws.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 2 contracts
Samples: Change in Control Agreement (Southwest Bancorp of Texas Inc), Change in Control Agreement (Southwest Bancorp of Texas Inc)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee’s employment is terminated by the Company without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall pay and provide to Employee the Executive’s employment following compensation and benefits through the last to occur of (x) the expiration of twenty-four months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the “Severance Benefits Termination Date”):
(i) Base Salary and Annual Bonus at the highest rate payable to Employee during the Contract Period, to be paid at the times provided in Paragraph 5 hereof;
(ii) in lieu of the opportunity to receive stock option grants during the period from the effective date of termination through the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Benefits Termination constitutes a “separation from service” as defined in Section 409ADate, the Company will pay to Employee an amount in cash equal to the Executive product of (A) the amounts described aggregate value of the stock options granted to Employee with Respect to the fiscal year ended immediately prior to the Change in Annex A within five business Control and (B) a fraction, the numerator of which is the number of days after from the effective date of termination through the Severance Benefits Termination Date and the denominator of which is 365; for this purpose, the value of the stock options will be determined using the Black-Scholes option price model;
(subject iii) coverage under the Company’s medical, dental, insurance, short-term disability, long-term disability plans, and other Plans, as listed on Exhibit A, Items 7 through 14 (provided that he became eligible to participate therein prior to the date his employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or his dependents, as so amended) and each as if Employee’s employment had continued through the Severance Benefits Termination Date; and
(iv) coverage and service credit under the Salaried Plan and the Excess Benefit Plans maintained in connection with the Salaried Plan under which he is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and the Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and the Excess Benefit Plans if Employee’s employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under the Company’s Plans cannot be provided through that Plan to Employee following termination of his employment, the Company shall directly provide the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried plan pursuant to (iv) above, the Company will be required to pay to Employee, from its general assets, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the amount by which that particular payment under the Salaried Plan would have been increased if Employee’s total service credit under the Salaried Plan were 18 months greater than is actually the case by reason of this Agreement. In addition, if in these circumstances any payments become due under the Salaried Plan with respect to Employee following his death, the Company will be obligated to make similar supplemental payments with respect to Employee on the dates on which payments are made with respect to Employee under the Salaried Plan. Furthermore, the provisions of Section 4(d) this Agreement shall not affect the validity or enforceability of this Agreement) any other agreement between the Company and will continue to provide to the Executive Employee, and the benefits described in Annex A for the periods described thereinprovided under this Agreement shall be additive to any other benefits promised to Employee under such other agreement. Moreover, this Agreement shall not operate to negate any other assurances provided to Employee.
(b) Without limiting the rights If Employee becomes entitled to compensation and benefits pursuant to Paragraph 12(a) he shall use reasonable efforts to seek other employment, provided, however, that he shall not be required to accept a position of the Executive at law less importance and dignity or in equity, if of substantially different character than of his position with the Company fails or a position that would require Employee to make any payment or provide any benefit engage in activity in violation of Employee’s agreement with respect to noncompetition set forth in Paragraph 14 hereof nor shall he be required to accept a position outside the greater Cleveland area. The Company’s obligations under item (i) and (ii) of Paragraph 12(a) will be made or provided hereunder offset by payments and benefits received by Employee from another employer to the following extent:
(i) The Company’s obligation to pay any particular installment of base salary following Employee’s termination will be offset, on a timely dollar for dollar basis, by any cash compensation received by Employee from another employer before the date on which the installment of base salary is payable by the Company.
(ii) To the extent that Employee is provided medical, dental, or short-term or long-term disability income protection benefits by another employer during any period, the Company will be relieved of its obligation to provide such benefits to Employee. For example, if a new employer provides Employee with a medical benefits plan that pays $500.00 for a specific claim made by Employee and the Company’s medical insurance plan would have paid $750.00 for that claim, then the Company will be obligated to pay interest on Employee $250.00 with respect to that claim. Other than as provided in this Paragraph 12(b) Employee shall have no duty to mitigate the amount of any payment or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period benefit provided for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits from the applicable plan, program or agreement, after Company under Paragraph 12(a):
(i) Employee materially and willfully breaches his agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the occurrence of a Change Company substantial and demonstrable damage; or
(ii) Employee materially and wilfully breaches his agreement with respect to noncompetition set forth in Control, Paragraph 14 hereof and such breach directly causes the Company substantial and demonstrable damage; then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under paragraph 12(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date and immediately before his death he is entitled to avoid accelerated taxation and/or tax penalties payments or benefits from the Company under Section 409AParagraph 12(a), amounts that would otherwise the Company will be payable and benefits that would otherwise be provided pursuant to this Agreement during relieved of its obligations under item (i) of Paragraph 12(a) as of the six-first day of the month period immediately following the Executivemonth in which Employee dies and thereafter the Company will provide to Employee’s termination beneficiaries and dependents salary continuation payments, benefits under the Excess Benefits Plan (as supplemented by item (iii) of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlierParagraph 12(a). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under paragraph 12(b) as if Employee’s death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Company.
Appears in 2 contracts
Samples: Employment Agreement (Nordson Corp), Employment Agreement (Nordson Corp)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, (such remaining Employment Term is hereinafter referred to Section 3(a)(i), 3(a)(iias the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a prorated bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period; and
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service with the Company or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 2 contracts
Samples: Employment Agreement (Sealy Corp), Employment Agreement (Sealy Corp)
Severance Compensation. (a) IfUpon termination of employment for any reason, following the Executive shall be entitled to: (A) all Base Salary earned through the date of termination to be paid according to Section 4; (B) any Annual Bonuses, pro-rated, to be paid in accordance with Section 5(a) above.; (C) all accrued but unused vacation time, and (d) reimbursement of all reasonable expenses as set forth in Section 8.
(b) In the event of a termination by the Company without Cause, by the Executive for Good Reason or by the Executive within one hundred eighty days (180) days of the occurrence of a Change in Control, the Company terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) of Control (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (below) and subject to the additional provisions of Section 4(d11(d)(3), then in addition to the severance compensation set forth in Section 6(a), Executive shall also be entitled to the following enhanced separation benefits (“Enhanced Separation Benefits”): (i) the greater of Executive’s continued Base Salary through the balance of the Employment Period, as renewed, or ) twelve (12) months of Executive’s then Base Salary; (ii) continued participation in Company welfare benefit plans (including health benefits) on the same terms as immediately prior to termination and to be paid in full by the Company for the period of time set forth in this AgreementSection 6(b) (not to be less than twelve months of continuation of benefits) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(biii) Without limiting the rights immediate vesting of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changeall stock options/equity awards.
(c) Unless otherwise expressly provided Upon termination of Executive’s continued benefits (either pursuant to Section 6(a) or 6(b) as the case may be), the Executive may continue coverage with respect to the Company’s group health plans as permitted by the applicable plan, program or agreement, after Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for himself and each of his “Qualified Beneficiaries” as defined by COBRA (“COBRA Coverage”). The Company shall reimburse the occurrence amount of a Change in Control, the Company will pay in cash to any COBRA premium paid for COBRA Coverage timely elected by and for the Executive a lump sum amount equal to and any Qualified Beneficiary of the sum of (i) any unpaid Incentive Pay that has been earnedExecutive, accruedand not otherwise reimbursed, allocated or awarded to during the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent ends on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier earliest of (x) the date prescribed the Executive or the Qualified Beneficiary, as the case may be, ceases to be eligible for payment pursuant to the applicable planCOBRA Coverage, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
last day of the consecutive eighteen (d18) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the date of the Executive’s termination of employment shall instead be paid on the first business day after and (z) the date that the Executive or the Qualified Beneficiary, as the case may be, is six months following covered by another group health plan. To reimburse any COBRA premium payment under this paragraph, the Executive’s termination Company must receive documentation of employment the COBRA premium payment within ninety (or upon the Executive’s death, if earlier). In addition, for purposes 90) days of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseits payment.
Appears in 1 contract
Severance Compensation. If the Employee's employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, determined without regard to Section 3(a)(i)Subsection 1(f)(ii) hereof, 3(a)(ii(such remaining Employment Term calculated without regard to Subsection 1(f)(ii) or 3(a)(iii)is hereinafter referred to as the "Payment Term") the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period; and
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service with the Company or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Severance Compensation. If the Employee's employment is ---------------------- terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(iii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(iii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as -------------------------------------------------------------------------------- Page 7 -------------------------------------------------------------------------------- provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and -------------------------------------------------------------------------------- Page 8 --------------------------------------------------------------------------------
5(a) (ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 9 or 10 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following 4.1 Severance Compensation in the occurrence Event of a Termination Upon a Change in ------------------------------------------------------------------------ Control. In the event the Executive's employment is terminated in a Termination ------- Upon a Change in Control, the Company terminates Executive shall be paid as severance compensation ("Severance Compensation") his Base Salary (at the Executive’s employment during rate payable at the Severance Period other than pursuant to Section 3(a)(itime of such termination), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, for a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights period of the Executive at law lesser of the remaining portion of the Initial Term or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth twelve (12) months from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
termination provided. Notwithstanding anything in this Section to the contrary, the Executive may in the Executive's sole discretion, by delivery of a notice to the Corporation within thirty (c30) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of days following a Termination Upon a Change in Control, the Company will pay in cash elect to the Executive receive from Compensation a lump sum amount Severance Compensation payment by bank cashier's check equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion present value of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number flow of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such cash payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided paid to the Executive pursuant to this Agreement during Section. The Executive shall also be entitled to an accelerated vesting of any awards granted to the six-month period immediately following Executive under the Corporation's Stock Option Plan to the extent provided in the stock option agreement entered into at the time of grant. The Executive shall continue to accrue retirement benefits and shall continue to enjoy any benefits under any plans of the Corporation in which the Executive is a participant to the full extent of the Executive’s termination of employment shall instead be paid on 's rights under such plans, including any prerequisites provided under this Agreement, though the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes remaining term of this Agreement; provided, each amount to however, that the benefits under any such plans of the Corporation in which the Executive is a participant, including any such prerequisites, shall cease upon re-employment by a new employer.
4.2 Severance Compensation in the Event of a Termination Other Than for ------------------------------------------------------------------------ Cause. In the event the Executive's employment is terminated in a Termination ----- Other Than for Cause, the Executive shall be paid as Severance Compensation his Base Salary (at the rate payable at the time of such termination), for a period of the lesser of the remaining portion of the Initial Term or benefit twelve (12) months from the date of such termination, on the dates specified in Section 3.1; provided, however, that if the Executive is employed by a new employer during such period, the Severance Compensation payable to the Executive during such period will be provided reduced by the amount of compensation that the Executive is receiving from the new employer. Executive is under no obligation to mitigate the amount owed by the Corporation to the Executive pursuant to this Section by seeking other employment. The Executive shall be construed as a separate identified payment for purposes entitled to an accelerated vesting of Section 409A, and any payments described awards granted to the Executive under the Corporation's Stock Option Plan to the extent provided in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwisestock option agreement entered into at the time of grant.
Appears in 1 contract
Samples: Employment Agreement (Donobi Inc)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, (such remaining Employment Term is hereinafter referred to Section 3(a)(i), 3(a)(iias the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a prorated bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period, as long as the Employee continues to make the applicable employee contributions in effect during the Payment Term based on the most senior level contribution rate; and
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service with the Company or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(ii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(ii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee’s annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee’s request, submitted in writing to the Company within five (5) business days after the date of the Employee’s termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee’s annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee’s termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee’s payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee’s Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 58.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee's employment is terminated by the Subsidiary without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall cause to be paid and provided to Employee base salary at the Executive’s employment highest monthly rate payable to Employee during the Contract Period and annual bonus awards as described in Paragraph 5, to be paid at the times provided in Paragraph 5 hereof through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the "Severance Period other than Benefits Termination Date"); and the following benefits for a period of twelve months following the Contract Expiration Date:
(i) coverage under the Company's medical insurance plan, short- term disability plan, long-term disability plan, salary continuation arrangement, disability benefit arrangement, and executive life insurance benefit (provided that [he][she] became eligible to participate therein prior to the date [his][her] employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or [his][her] dependents, as so amended) and each as if Employee's employment had continued through the Severance Benefits Termination Date; and
(ii) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which [he][she] is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee's employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of [his][her] employment, the Company shall cause the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will pay be required to cause payment to Employee, from its general assets or those of its Subsidiary, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the Executive amount by which that particular payment under the amounts described Salaried Plan would have been increased if Employee's total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in Annex A within five business days after these circumstances any payments become due under the Termination Date (subject Salaried Plan with respect to Employee following [his][her] death, the provisions of Section 4(d) of this Agreement) and Company will continue be obligated to provide cause similar supplemental payments with respect to Employee to be made on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting Notwithstanding the rights foregoing provisions of the Executive at law or in equityParagraph 15(a), if the Company fails to make any payment or provide shall cause any benefit required to which Employee becomes entitled pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan or the Excess Benefit Plan including, in the event Employee is not fully vested under the provisions of either, the present value of any otherwise forfeitable benefit thereunder, to be paid in a single sum to Employee as soon as practicable, but not more than thirty days following [his][her] termination of employment, with present value determination to be made or provided hereunder based on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as actuarial factors for single sum payments set forth from time to time during in the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changeSalaried Pension Plan.
(c) Unless otherwise expressly provided by If Employee becomes entitled to compensation and benefits pursuant to Paragraph 12(a), [he][she] shall use reasonable efforts to seek other employment, provided, however, that [he][she] shall not be required to accept a position of less importance and dignity or of substantially different character than that of [his][her] position with the applicable planSubsidiary, program or agreement, after nor shall [he][she] be required to accept a position outside the occurrence of a geographic area in which [he][she] resides on the Change in Control, Control Date. The Company's and the Company will pay in cash to the Executive a lump sum amount equal to the sum of Subsidiary's obligations under items (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) of Paragraph 12
(a) will be offset by payments and benefits received by Employee from another employer to the Pro Rata Portion following extent:
(i) The obligation to pay any particular installment of base salary following Employee's termination will be offset, on a dollar for dollar basis, by any base salary received by Employee from another employer before the Incentive Pay Target in effect for date on which the installment of base salary is payable by the Company or the Subsidiary.
(ii) To the extent that Employee is provided medical, dental, or short-term or long-term disability income protection benefits by another employer during any subsequent performance period, the Company will be relieved of its obligation to provide such benefits to Employee. For this purposeexample, “Pro Rata Portion” means (x) if a new employer provides Employee with a medical benefits plan that pays $500.00 for a specific claim made by Employee and the number of days from and including Company's medical insurance plan would have paid $750.00 for that claim, then the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments Company will be made at obligated to pay Employee $250.00 with respect to that claim. Other than as provided in this Paragraph 12(c), Employee shall have no duty to mitigate the earlier amount of (x) the date prescribed any payment or benefit provided for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsin this Agreement.
(d) To If during any period in which Employee is entitled to payments or benefits under Paragraph 12
(a) Employee materially and willfully breaches [his][her] agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the extent required in order to avoid accelerated taxation and/or tax penalties Company or the Subsidiary substantial and demonstrable damage, then the Company will be relieved of its obligations under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during Paragraph 12(a) hereof as of the six-first day of the month period immediately following the Executive’s termination date of employment shall instead such material breach.
(e) If Employee dies on or before the Severance Benefits Termination Date or, with respect to benefits, the Contract Expiration Date, and immediately before [his][her] death [he][she] is entitled to payments or benefits under Paragraph 12(a), the Company will be paid on relieved of its obligations under Paragraph 12
(a) with respect to base salary and bonus payments as of the first business day after of the date that is six months month immediately following the Executive’s termination of employment (or upon month in which Employee dies and thereafter the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit Company will cause to be provided shall be construed to Employee's beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as a separate identified payment for purposes supplemented by item (ii) of Section 409AParagraph 12(a)), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 12(c)) as if Employee's death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Subsidiary.
Appears in 1 contract
Severance Compensation. (a) IfIf this Agreement is terminated (i) as a result of the Company's failure to renew this Agreement as provided in Section 1 above, (ii) by the Company without Cause (as provided in Section 6.4 above), (iii) because of Employee's resignation with Good Reason (as defined below) or (iv) because of Employee's death or disability, (a) Employee will receive Employee's base salary and benefits under this Agreement (at the Company's expense) for two years following the occurrence date of termination and (b) to the extent EBITDA targets under Exhibit A are met during the Measuring Period in which the termination occurs, Employee will receive a Change pro rata bonus based on the number of days Employee was employed during the Measuring Period. Notwithstanding anything herein to the contrary, in Controlno event shall Employee be entitled to additional compensation for the economic value of any benefits provided by, or expenses paid by, the Company terminates the Executive’s employment during the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein, including unused vacation or sick leave.
(b) Without limiting In addition to the rights compensation described in Section 6.5(a) above, the parties agree that: (x) in the event Employee resigns his employment for Good Reason pursuant to this Section 6.5, then,
(i) no later than thirty (30) days after the date of such resignation, Employee may deliver a notice (the "Liquidity Notice") to the Company and to Holdings directing Holdings to exercise its Repurchase Option as to the number of Executive Units designated by Employee, in Employee's sole discretion, in the Liquidity Notice, but not to exceed 50% of all Executive Units (Repurchase Option and Executive Units each being as defined in the Management Unit Purchase Agreement, dated as of March 12, 1999 (the "Management Equity Agreement"), by and between Holdings and the Employee) and Holdings shall repurchase such Executive Units, for cash, within thirty (30) days of such notice from Employee and (ii) no later than thirty (30) days after the second anniversary of the Executive at law or in equitydate of such resignation, if Employee may deliver a second Liquidity Notice to the Company fails and to make any payment or provide any benefit required Holdings directing Holdings to be made or provided hereunder on exercise its Repurchase Option as to the remaining Executive Units and Holdings shall repurchase such Executive Units, for cash, within thirty (30) days of such notice from Employee; and (y) in the event the Company terminates this Agreement without Cause pursuant to Section 6.4, then, no later than thirty (30) days after the date of such termination, Employee may deliver a timely basisLiquidity Notice to the Company and to Holdings directing Holdings to exercise its Repurchase Option as to all Executive Units and Holdings shall repurchase such Executive Units, for cash, within thirty (30) days of such notice from Employee. In conjunction with its obligations under this Section 6.5(b), the Company will pay interest on shall maintain a Xxxxxxxxxx Reserve Amount (as defined below) to be used in the amount or value thereof at an annualized rate repurchase of interest equal Employee's Executive Units as provided in this Section 6.5(b). Further, the Company shall, subject to applicable withholding taxes, distribute to the “prime rate” as set forth from time to time during Employee his entire Account Balance under the relevant period in The Wall Street Journal “Money Rates” columnTeam Health, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and Inc. Equity Deferred Compensation Plan as of the date of such change.
(cEmployee's termination; provided that Holdings' and the Company's obligations under this Section 6.5(b) Unless otherwise expressly provided by are conditioned on Holdings and/or the applicable planCompany being permitted to do so in compliance with all agreements to which either or both the Company and Holdings are a party to that relate to indebtedness for borrowed money, program or agreement, after the occurrence of a Change in Controlincluding without limitation, the Company's senior credit agreement and its senior subordinated note indenture; provided further that if either Holdings or the Company will pay is not permitted to perform any of its obligations stated in cash this Section 6.5(b) by virtue of any such agreements, Holdings and/or the Company shall perform each of their respective obligations under this Section 6.5(b) to the Executive a lump sum amount equal to the sum of extent permitted, and shall thereafter perform all obligations (i) any unpaid Incentive Pay that has been earnedor such portion thereof as permitted), accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services first date that such agreements will permit performance, and Holdings and/or the Company shall use their best efforts to be permitted to so perform, including but not limited to, using efforts similar to those used by Holdings and/or the Executive) and Company in the past (ii) e.g., seeking waivers, if necessary). Notwithstanding the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeforegoing, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following at all times until the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier occur of (x) the date prescribed for payment pursuant expiration of any right of Employee to the applicable plan, program or agreement deliver any Liquidity Notice and (y) within five business days after the Termination DateCompany's full performance of its obligations under any Liquidity Notices theretofore delivered to the Company, and the Company will be payable and calculated disregarding any otherwise applicable vesting requirements.not:
(di) To declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any equity securities or any of its capital stock or any warrants, rights or options to acquire such equity securities or capital stock, now or hereafter outstanding, return any capital to its stockholders as such, make any distribution of assets, capital stock, warrants, rights, options, obligations or securities to its stockholders as such or permit any of its subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any equity securities or any capital stock of the extent required in order Company or any warrants, rights or options to avoid accelerated taxation and/or tax penalties under Section 409Aacquire such equity securities or capital stock,
(ii) enter into or amend any agreement, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during including without limitation the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment Company's senior credit agreement (or upon enter into any restatement or refinancing thereto), or
(iii) take any other action or fail to take any other action for the Executive’s death, if earlierpurpose of making it impossible for Holdings or the Company to perform its obligations stated in this Section 6.5(b). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.,
Appears in 1 contract
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b)(i) hereof (such remaining Employment Term calculated without regard to Section 3(a)(iSubsection 1(b)(ii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee’s annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the “Payment Term”) or 3(a)(iii)the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee’s request, submitted in writing to the Company within five (5) business days after the date of the Employee’s termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee’s annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee’s termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee’s payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee’s Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) IfIf the Employee’s employment is terminated by the Company other than for Cause or is terminated by the Employee for Good Reason, following then, through the occurrence remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Subsection 1(b)(ii) hereof (such remaining Employment Term calculated without regard to Subsection 1(b)(ii), and without regard to whether the Employee elects accelerated payments of a Change the Employee’s annual base salary and bonus in Controlaccordance with Subsection 5(a)(v), is hereinafter referred to as the “Payment Term”), the Company terminates shall:
(i) continue to pay the ExecutiveEmployee’s employment during annual base salary in the Severance Period other than pursuant then prevailing amount and at the times specified in Subsection 3(a) hereof;
(ii) regardless of the achievement of financial targets established annually by the Board, pay the Employee an amount equal to Section 3(a)(i)one (1) year’s full Target Bonus for the Employee, 3(a)(iisuch payment shall be made on the date that annual bonuses are normally paid by the Company to its senior executives; and
(iii) or 3(a)(iii)continue in effect any medical and dental coverage, any disability protection, any life insurance protection (including life insurance protection being paid for by the Employee) and car allowance hereunder being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section 3(btermination of employment, at the highest level in effect during such one year period;
(iv) (any pay for executive outplacement services for the Employee from Drake, Beam & Xxxxx or a similar nationally recognized executive outplacement firm selected by the Company, such termination, a “Triggering Termination”)services shall be at the level provided for chief executive officers of similar size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term;
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee’s request, submitted in writing to the Company will pay to the Executive the amounts described in Annex A within five twenty (20) business days after the Termination Date (subject to date of the provisions Employee’s termination of Section 4(d) employment, the Company shall pay the total of this Agreement) and will continue to provide to the Executive the benefits Employee’s annual base salary payments described in Annex A Subsection 5(a)(i), discounted for the periods described therein.time value of money using the then prime rate, plus the amount provided in Subsection 5(a)(ii), such payment shall be made in a single sum within forty-five (45) days following the Employee’s termination of employment; and
(b) Without limiting If the rights Employee’s employment hereunder terminates due to the Employee’s termination by the Company for Cause, due to the death or disability of the Executive at law Employee, or in equitydue to the termination by the Employee other than for Good Reason, if then no further compensation or benefits will be provided to the Employee by the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee’s employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(f) hereof, determined without regard to Section 3(a)(i)Subsection 1(f)(ii) hereof, 3(a)(ii(such remaining Employment Term calculated without regard to Subsection 1(f)(ii) or 3(a)(iii)is hereinafter referred to as the “Payment Term”) the Company shall:
(i) continue to pay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s employment pursuant to Section termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period; and
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of comparable size corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee’s employment hereunder terminates due to the Executive at law or in equityEmployee’s death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service with the Company or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee’s obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee's employment is terminated by the Company without cause or by Employee for good reason, then, except as provided in ControlParagraph 9(b), 9(c), or 9(d), the Company terminates shall pay and provide to Employee the Executive’s employment following compensation and benefits through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the "Severance Benefits Termination Date"):
(i) base salary at the highest monthly rate payable to Employee during the Contract Period, to be paid at the times provided in Paragraph 4 hereof;
(ii) coverage under the Company's medical insurance plan, short-term disability plan, long-term disability plan, Salary Continuation Arrangement, Disability Benefit Arrangement, and Executive Life Insurance Benefit (provided that he became eligible to participate therein prior to the date his employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or his dependents, as so amended) and each as if Employee's employment had continued through the Severance Period other than Benefits Termination Date; and
(iii) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which he is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee's employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of his employment, the Company shall directly provide the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(iii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will be required to pay to Employee, from its general assets, on each date on which Employee receives a payment from the Executive the amounts described in Annex A within five business days after the Termination Date (subject Salaried Plan, a supplemental payment equal to the provisions of Section 4(d) of this Agreement) and amount by which that particular payment under the Salaried Plan would have been increased if Employee's total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in these circumstances any payments become due under the Salaried Plan with respect to Employee following his death, the Company will continue be obligated to provide make similar supplemental payments with respect to Employee on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting the rights If Employee becomes entitled to compensation and benefits pursuant to Paragraph 9(a) he shall use reasonable efforts to seek other employment, provided, however, that he shall not be required to accept a position of the Executive at law less importance and dignity or in equity, if of substantially different character than that of his position with the Company fails or a position that would require Employee to make any payment or provide any benefit engage in activity in violation of Employee's agreement with respect to noncompetition set forth in Paragraph 11 hereof nor shall he be required to accept a position outside the greater Cleveland area. The Company's obligations under items (i) and (ii) of Paragraph 9(a) will be made or provided hereunder offset by payments and benefits received by Employee from another employer to the following extent:
(i) The Company's obligation to pay any particular installment of base salary following Employee's termination will be offset, on a timely dollar for dollar basis, by any cash compensation received by Employee from another employer before the date on which the installment of base salary is payable by the Company.
(ii) To the extent that Employee is provided medical, dental, or short-term or long-term disability income protection benefits by another employer during any period, the Company will be relieved of its obligation to provide such benefits to Employee. For example, if a new employer provides Employee with a medical benefits plan that pays $500.00 for a specific claim made by Employee and the Company's medical insurance plan would have paid $750.00 for that claim, then the Company will be obligated to pay interest on Employee $250.00 with respect to that claim. Other than as provided in this Paragraph 9(b) Employee shall have no duty to mitigate the amount of any payment or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period benefit provided for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits from the applicable plan, program or agreement, after Company under Paragraph 9(a):
(i) Employee materially and willfully breaches his agreement with respect to confidential information set forth in Paragraph 10 hereof and such breach directly causes the occurrence of a Change Company substantial and demonstrable damage; or
(ii) Employee materially and willfully breaches his agreement with respect to noncompetition set forth in Control, Paragraph 11 hereof and such breach directly causes the Company substantial and demonstrable damage; then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under Paragraph 9(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date and immediately before his death he is entitled to avoid accelerated taxation and/or tax penalties payments or benefits from the Company under Section 409AParagraph 9(a), amounts that would otherwise the Company will be payable and benefits that would otherwise be provided pursuant to this Agreement during relieved of its obligations under item (i) of Paragraph 9(a) as of the six-first day of the month period immediately following the Executive’s termination month in which Employee dies and thereafter the Company will provide to Employee's beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as supplemented by item (iii) of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlierParagraph 9(a). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 9(b)) as if Employee's death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Company.
Appears in 1 contract
Severance Compensation. If the Employee’s employment is terminated, the following severance provisions will apply:
(a) If, following during the occurrence term of a Change in Controlthis agreement, the Company terminates the ExecutiveEmployee’s employment during is terminated by the Severance Period Company other than pursuant for Cause or is terminated by the Employee for Good Reason, then, for a period of two (2) years after such termination (“Payment Term”) the Company shall:
(i) continue to Section 3(a)(i), 3(a)(iipay the Employee’s annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) or 3(a)(iii)hereof, or if such annual base salary has decreased during the Executive terminates Executiveone year period ending on the Employee’s termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee’s participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(A) pay the Employee a prorated bonus under the Bonus Plan for the partial year period ending on the date of the Employee’s termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee’s bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee’s termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a bonus equal to the Employee’s Target Annual Bonus Percentage, multiplied by the Employee’s annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus for the final partial year during the Payment Term shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof; and
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee’s termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee’s termination of employment, at the highest level in effect during such one year period as long as the Employee continues to make the applicable employee contributions in effect during the Payment Term based on the most senior level contribution rate.
(b) If the Employee’s employment pursuant hereunder terminates due to Section 3(b) (any the Employee’s death, disability, termination by the Company for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to the Employee by the Company under this Agreement following the date of such termination, a “Triggering Termination”), termination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company’s taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death or disability.
(c) Notwithstanding anything contained in this Agreement to the contrary, other than Section 15 hereof, if the Employee breaches any of the Employee’s obligations under Section 8 or 9 hereof, no further severance payments or other benefits will be payable to the Employee under this Section 5.
(d) If the Employee retires from the Company after July 22, 2010, the Company will pay to the Executive Employee a prorated bonus under the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A Bonus Plan for the periods described therein.
(b) Without limiting partial year period ending on the rights date of the Executive at law or in equity, Employee’s retirement from employment calculated as if the Company fails to make any payment or provide any benefit required Employee had continued to be made or provided hereunder on a timely basisemployed for the fiscal entire year, except that the Company will pay interest on Employee’s bonus percentage (calculated in accordance with the amount or value thereof at an annualized rate of interest equal to Bonus Plan in the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and manner customary as of the date of such change.
(c) Unless otherwise expressly provided by this Agreement, but disregarding the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment of the Employee) shall instead be paid applied to the portion of the Employee’s annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period commencing at the start of the fiscal year in which the Employee retires and ending on the first business day after the date that is six months following the ExecutiveEmployee’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseretirement date.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following 4.1 Severance Compensation in the occurrence Event of a Termination Upon a Change in ------------------------------------------------------------------------ Control. In the event the Executive's employment is terminated in a Termination ------- Upon a Change in Control, the Company terminates Executive shall be paid as severance compensation ("Severance Compensation") her Base Salary (at the Executive’s employment during rate payable at the Severance Period other than pursuant to Section 3(a)(itime of such termination), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, for a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights period of the Executive at law lesser of the remaining portion of the Initial Term or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth twelve (12) months from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
termination provided. Notwithstanding anything in this Section to the contrary, the Executive may in the Executive's sole discretion, by delivery of a notice to the Corporation within thirty (c30) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of days following a Termination Upon a Change in Control, the Company will pay in cash elect to the Executive receive from Compensation a lump sum amount Severance Compensation payment by bank cashier's check equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion present value of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number flow of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such cash payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided paid to the Executive pursuant to this Agreement during Section. The Executive shall also be entitled to an accelerated vesting of any awards granted to the six-month period immediately following Executive under the Corporation's Stock Option Plan to the extent provided in the stock option agreement entered into at the time of grant. The Executive shall continue to accrue retirement benefits and shall continue to enjoy any benefits under any plans of the Corporation in which the Executive is a participant to the full extent of the Executive’s termination of employment shall instead be paid on 's rights under such plans, including any prerequisites provided under this Agreement, though the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes remaining term of this Agreement; provided, each amount to however, that the benefits under any such plans of the Corporation in which the Executive is a participant, including any such prerequisites, shall cease upon re-employment by a new employer.
4.2 Severance Compensation in the Event of a Termination Other Than for ------------------------------------------------------------------------ Cause. In the event the Executive's employment is terminated in a Termination ----- Other Than for Cause, the Executive shall be paid as Severance Compensation her Base Salary (at the rate payable at the time of such termination), for a period of the lesser of the remaining portion of the Initial Term or benefit twelve (12) months from the date of such termination, on the dates specified in Section 3.1; provided, however, that if the Executive is employed by a new employer during such period, the Severance Compensation payable to the Executive during such period will be provided reduced by the amount of compensation that the Executive is receiving from the new employer. Executive is under no obligation to mitigate the amount owed by the Corporation to the Executive pursuant to this Section by seeking other employment. The Executive shall be construed as a separate identified payment for purposes entitled to an accelerated vesting of Section 409A, and any payments described awards granted to the Executive under the Corporation's Stock Option Plan to the extent provided in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwisestock option agreement entered into at the time of grant.
Appears in 1 contract
Samples: Employment Agreement (Donobi Inc)
Severance Compensation. If the Employee's employment is ---------------------- terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1 (b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(iii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(iii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(vi), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year -------------------------------------------------------------------------------- Page 8 -------------------------------------------------------------------------------- (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) continue to pay the automobile allowance and the personal financial planning allowance as provided in Subsection 3(f) hereof;
(v) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for the most senior executives, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term.
(vi) In lieu of the payments described in Section 409ASubsections 5(a)(i) and 5(a)(ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equity-------------------------------------------------------------------------------- Page 9 -------------------------------------------------------------------------------- Employee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following the Employee's termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 9 or 10 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company terminates shall terminate the Executive’s 's employment during the Severance Period of Employment other than pursuant to Section 3(a)(i), 3(a)(ii4(a) or 3(a)(iii)hereof, or if the Executive terminates Executive’s shall terminate his employment pursuant to Section 3(b4(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Ahereof, the Company will shall pay to the Executive the amounts described amount specified in Annex A Section 5(a)(i) hereof within five ten business days after the date (the "Termination Date") that the Executive's employment is terminated (the effective date of which shall be the date of termination, or such other date that may be specified by the Executive if the termination is pursuant to Section 4(b) hereof):
i) In lieu of any further payments to the Executive for periods subsequent to the Termination Date, but without affecting the rights of the Executive referred to in Section 5(b) hereof, a lump sum payment (the "Severance Payment") in an amount equal to the present value (using a discount rate required to be utilized for purposes of computations under Section 280G of the Code or any successor provision thereto, or if no such rate is so required to be used, a rate equal to the then-applicable interest rate prescribed by the Pension Benefit Guarantee Corporation for benefit valuations in connection with non-multiemployer pension plan terminations assuming the immediate commencement of benefit payments (the "Discount Rate")) of the sum of (A) the aggregate Base Pay (at the highest rate in effect during the Term prior to the Termination Date) for each remaining year or fraction of the Period of Employment which the Executive would have received had such termination or breach not occurred, plus (B) the aggregate Incentive Pay (based upon the greatest amount of Incentive Pay paid or payable to the Executive for any year during the Term but prior to the year in which the Termination Date occurs), which the Executive would have received pursuant to this Agreement during the remainder of the Period of Employment had his employment continued for the remainder of the Period of Employment; provided, however, that in no event will the "present value" (as determined under Section 280G of the Code or any successor provision thereto) of the amount otherwise payable hereunder, when added to the "present value" (as determined under Section 280G of the Code or any successor provision thereto) of any other "parachute payments" (as that term is defined in Section 280G of the Code (without regard to Section 280G(b)(2)(A)(ii) thereof) or any successor provision thereto) from the Company, exceed an amount (the "299% Amount") equal to 299% of the Executive's "base amount" (as that term is defined in Section 280G of the Code or any successor provision thereto) and if the amount otherwise payable hereunder would exceed the 299% Amount, the Severance Payment shall be reduced to the extent necessary so that the aggregate present value determined in the previous clause does not exceed the 299% Amount.
ii) The determination of whether any amount otherwise payable under Section 5(a)(i) causes the 299% Amount to be exceeded shall be made, if requested by the Executive or the Company, by tax counsel selected by the Company and reasonably acceptable to the Executive. The costs of obtaining such determination shall be borne by the Company. The fact that the Executive shall have his right to the Severance Payment reduced as a result of the existence of the limitations contained in this Section 5(a) shall not limit or otherwise affect any rights of the Executive to any Employee Benefit, or other right arising other than pursuant to this Agreement. Without limiting the generality of the foregoing, upon the Executive's termination of employment as provided in this Section 5, the Company shall pay over to him all vested benefits to which he is entitled under and in accordance with the terms of the Company's employee savings, stock ownership, supplemental executive retirement and similar Plans in the event such payments are not otherwise made in accordance with the terms of such plans.
iii) Except to the extent that the payments or benefits pursuant to this Section 5(a)(iii) would result in a reduction of the amount of the Severance Payment because they would exceed the 299% Amount, (A) for the remainder of the Period of Employment the Company shall arrange to provide the Executive with Employee Benefits substantially similar to those which the Executive was receiving or entitled to receive immediately prior to the Termination Date (subject and if and to the provisions extent that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of Section 4(d) the Company solely due to the fact that the Executive is no longer an officer or employee of this Agreementthe Company, then the Company shall itself pay or provide for the payment to the Executive, his dependents and beneficiaries, such Employee Benefits) and will continue to provide (B) without limiting the generality of the foregoing, the remainder of the Period of Employment shall be considered service with the Company for the purpose of service credits under the Company's retirement income, supplemental executive retirement and other benefit plans of the Company applicable to the Executive or his beneficiaries immediately prior to the Termination Date. Without otherwise limiting the purposes or effect of Section 6 hereof, Employee Benefits payable to the Executive pursuant to this Section 5(a)(iii) by reason of any "welfare benefit plan" of the Company (as the term "welfare benefit plan" is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) shall be reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during such period following the Executive's Termination Date until the expiration of the Period of Employment.
iv) Notwithstanding any provision of the Section 5(a) to the contrary, in the event the benefits described intended to be provided to the Executive pursuant to Section 5(a)(iii) hereof are required to be reduced in Annex A whole or in part because the value of such Employee Benefits, when added to the amount of the Severance Payment under Section 5(a)(i), would exceed 299% Amount, the Executive shall have the option to elect to receive, in lieu of all or a portion of the Severance Payment provided in Section 5(a)(i) hereof, one or more Employee Benefits, provided that (A) prior to the receipt of any payment under Section 5(a)(i) hereof, the Executive Benefit or Employee Benefits so elected to be received, and (B) in no event shall the "aggregate present value of the payments in the nature of compensation" (as that phrase is used in Section 280G of the Code) received by the Executive as a result of the receipt of such Employee Benefits, when added to the remaining portion of the Severance Payment, if any, to be received by the Executive, exceed the 299% Amount.
v) In addition to all other compensation due to the Executive, the following shall occur immediately following the occurrence of a Change in Control:
A) all Company stock options held by the Executive prior to a Change in Control shall become fully exercisable, regardless of whether or not the vesting conditions set forth in the relevant stock option agreements have been satisfied in full; and
B) all restrictions on any restricted Company stock granted to the Executive prior to a Change in Control shall be removed and the stock shall be freely transferable, regardless of whether the conditions set forth in the relevant restricted stock agreements have been satisfied in full.
b) Upon written notice given by the Executive to the Company prior to the receipt of any payment pursuant to Section 5(a) hereof, the Executive, at his sole option, without reduction to reflect the present value of such amounts as aforesaid, may elect to have all or any of the Severance Payment payable pursuant to Section 5(a)(i) hereof paid to him on a quarterly or monthly basis during the remainder of the Period of Employment.
c) There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payment to or benefit for the periods described thereinExecutive provided for in this Agreement.
(bd) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will shall pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, then-applicable Discount Rate or, if lesslesser, the maximum highest rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changeallowed by applicable usury laws.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Change in Control Agreement (Southwest Bancorp Inc /Tx/)
Severance Compensation. (a) IfUpon termination of employment for any reason, following the Executive shall be entitled to: (A) all Base Salary earned through the date of termination to be paid according to Section 4; (B) any Annual Bonuses, pro-rated, to be paid in accordance with Section 5(a) and Section 5(b) above (unless termination is for Cause, as defined below) ; (C) all accrued but unused vacation time, and (d) reimbursement of all reasonable expenses as set forth in Section 8.
(b) Upon termination of employment by Company for any reason other than for cause (“Cause”) as defined in Section 11(c), or upon termination of employment by Executive for good reason (“Good Reason”) as defined in Section 11(d)(1), Executive shall be entitled to receipt of all vested and unvested shares contemplated in the Executive Award in accord with the any vesting schedule as if no termination occurred.
(c) In the event of a termination by the Company without Cause, by the Executive for Good Reason or by the Executive within one hundred eighty days (180) days of the occurrence of a Change of Control (as defined below) and subject to the additional provisions of Section 11(d)(3), then in Controladdition to the severance compensation set forth in Section 6(a) and 6(b), Executive shall also be entitled to the following enhanced separation benefits (“Enhanced Separation Benefits”): (i) the greater of Executive’s continued Base Salary through the balance of the Employment Period, as renewed, or twenty four (24) months of Executive’s then Base Salary; (ii) continued participation in Company welfare benefit plans (including health benefits) on the same terms as immediately prior to termination and to be paid in full by the Company terminates for the period of time set forth in this Section 6(c) (not to be less than twelve (12) months of continuation of benefits) and (iii) immediate vesting of all stock options/equity awards.
(d) Upon termination of Executive’s employment during the Severance Period other than continued benefits (either pursuant to Section 3(a)(i6(a), 3(a)(ii6(b) or 3(a)(iii6(c) as the case may be), or if the Executive terminates Executivemay continue coverage with respect to the Company’s employment pursuant to Section 3(bgroup health plans as permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) (any such termination, a for himself and each of his “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from serviceQualified Beneficiaries” as defined in Section 409A, by COBRA (“COBRA Coverage”). The Company shall reimburse the Company will pay to amount of any COBRA premium paid for COBRA Coverage timely elected by and for the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights any Qualified Beneficiary of the Executive at law or in equityExecutive, if and not otherwise reimbursed, during the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest period that ends on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier earliest of (x) the date prescribed the Executive or the Qualified Beneficiary, as the case may be, ceases to be eligible for payment pursuant to the applicable planCOBRA Coverage, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
last day of the consecutive eighteen (d18) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the date of the Executive’s termination of employment shall instead be paid on the first business day after and (z) the date that the Executive or the Qualified Beneficiary, as the case may be, is six months following covered by another group health plan. To reimburse any COBRA premium payment under this paragraph, the Executive’s termination Company must receive documentation of employment the COBRA premium payment within ninety (or upon the Executive’s death, if earlier). In addition, for purposes 90) days of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseits payment.
Appears in 1 contract
Samples: Executive Employment Agreement (Red Cat Holdings, Inc.)
Severance Compensation. If the Employee's employment is ---------------------- terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(iSubsection 1(b)(iii) hereof, (such remaining Employment Term calculated without regard to Subsection 1(b)(iii), 3(a)(iiand without regard to whether the Employee elects accelerated payments of the Employee's annual base salary and bonus in accordance with Subsection 5(a)(v), is hereinafter referred to as the "Payment Term") or 3(a)(iii)the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as -------------------------------------------------------------------------------- Page 7 -------------------------------------------------------------------------------- provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice- presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined one year period commencing on the date of termination of employment regardless of the Payment Term; and
(v) In lieu of the payments described in Section 409ASubsections 5(a)(i) and -------------------------------------------------------------------------------- Page 8 --------------------------------------------------------------------------------
(a) (ii) hereof, at the Employee's request, submitted in writing to the Company within five (5) business days after the date of the Employee's termination of employment:
(A) the Company will pay to the Executive total of the amounts Employee's annual base salary payments described in Annex A Subsection 5(a)(i) in a single sum within five business thirty (30) days after following the Termination Date Employee's termination of employment; and
(subject to the provisions of Section 4(dB) of this Agreement) and will continue to provide to the Executive the benefits his Bonus Plan payments described in Annex A Subsection 5(a)(ii) shall be made at the same time as the Employee's payment under Subsection 5(a)(vi)(A) but shall be calculated using the Employee's Target Annual Bonus Percentage for the periods described thereinall calculation purposes.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 16 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 62 with ten years of service or age 65.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 16 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 9 or 10 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Samples: Employment Agreement (Sealy Corp)
Severance Compensation. (a) If, following before the occurrence of a Change Contract Expiration Date, Employee's employment is terminated by the Subsidiary without cause or by Employee for good reason, then, except as provided in ControlParagraph 12(b), 12(c), or 12(d), the Company terminates shall cause to be paid and provided to Employee (i) base salary at the Executive’s employment highest monthly rate payable to Employee during the Contract Period through the last to occur of (x) the expiration of six months after the effective date of the termination, and (y) the Contract Expiration Date (such last-to-occur date is hereinafter referred to as the "Severance Period other Benefits Termination Date") and a bonus award accrued for the year in which such termination occurs determined in accordance with the Company's bonus plan as in effect immediately prior to the Change in Control Date and at a level no less than the target amount thereunder for the year in which such termination occurs; and (ii) the following benefits for a period of twelve months following the Contract Expiration Date:
(A) coverage under the Company's medical insurance plan, short-term disability plan, long-term disability plan, salary continuation arrangement, disability benefit arrangement, and executive life insurance benefit (provided that [he][she] became eligible to participate therein prior to the date [his][her] employment is terminated), each as in effect on the Change in Control Date (or, if subsequently amended to increase benefits to Employee or [his][her] dependents, as so amended) and each as if Employee's employment had continued through the Severance Benefits Termination Date; and
(B) coverage and service credit under the Salaried Plan and any Excess Benefit Plan maintained in connection with the Salaried Plan under which [he][she] is eligible to participate so that the aggregate benefits payable to or with respect to the Employee under the Salaried Plan and any such Excess Benefit Plan will be equal to the aggregate benefits that would have been paid to or with respect to Employee under the Salaried Plan and any such Excess Benefit Plan if Employee's employment had continued through the Severance Benefits Termination Date. If any of the benefits to be provided under one or more of the plans, agreements, or arrangements specified above cannot be provided through that plan, agreement, or arrangement to Employee following termination of [his][her] employment, the Company shall cause the full equivalent of such benefits to Employee. For example, since it is not possible to provide additional service credit directly through the Salaried Plan, if Employee becomes entitled to an additional 18 months of service credit under the Salaried Plan pursuant to Section 3(a)(i), 3(a)(ii(B) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Aabove, the Company will pay be required to cause payment to Employee, from its general assets or those of its Subsidiary, on each date on which Employee receives a payment from the Salaried Plan, a supplemental payment equal to the Executive amount by which that particular payment under the amounts described Salaried Plan would have been increased if Employee's total service credit under the Salaried Plan were 18 months greater than is actually the case. In addition, if in Annex A within five business days after these circumstances any payments become due under the Termination Date (subject Salaried Plan with respect to Employee following [his][her] death, the provisions of Section 4(d) of this Agreement) and Company will continue be obligated to provide cause similar supplemental payments with respect to Employee to be made on the Executive dates on which payments are made with respect to Employee under the benefits described in Annex A for the periods described thereinSalaried Plan.
(b) Without limiting Notwithstanding the rights foregoing provisions of the Executive at law or in equityParagraph 12(a), if the Company fails shall cause any benefit to make which Employee becomes entitled pursuant to the provisions of Paragraph 8 or 12(a) under the Salaried Plan or the Excess Benefit Plan including, in the event Employee is not fully vested under the provisions of either, the present value of any otherwise forfeitable benefit thereunder, to be paid in a single sum to Employee as soon as practicable, but not more than thirty days following [his][her] termination of employment, with present value determination to be made based on actuarial factors for single sum payments set forth in the Salaried Pension Plan. Employee shall have no duty to mitigate the amount of any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period for in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changethis Agreement.
(c) Unless otherwise expressly provided by If during any period in which Employee is entitled to payments or benefits under Paragraph 12
(a) Employee materially and willfully breaches [his][her] agreement with respect to confidential information set forth in Paragraph 13 hereof and such breach directly causes the applicable planCompany or the Subsidiary substantial and demonstrable damage, program or agreement, after the occurrence of a Change in Control, then the Company will pay in cash to the Executive a lump sum amount equal to the sum be relieved of (iits obligations under Paragraph 12(a) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms hereof as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day of the month immediately following the last day date of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsmaterial breach.
(d) To If Employee dies on or before the extent required in order Severance Benefits Termination Date or, with respect to avoid accelerated taxation and/or tax penalties benefits, the Contract Expiration Date, and immediately before [his][her] death [he][she] is entitled to payments or benefits under Section 409AParagraph 12(a), amounts that would otherwise the Company will be payable relieved of its obligations under Paragraph 12(a) with respect to base salary and benefits that would otherwise be provided pursuant to this Agreement during bonus payments as of the six-first day of the month period immediately following the Executive’s termination of employment shall instead be paid on month in which Employee dies and thereafter the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit Company will cause to be provided shall be construed to Employee's beneficiaries and dependents salary continuation payments, benefits under any Excess Benefits Plan (as a separate identified payment for purposes supplemented by item (B) of Section 409AParagraph 12(a)), and any continuing medical and dental benefits to the same extent (subject to reduction for payments described or benefits from a new employer under Paragraph 12(c)) as if Employee's death had occurred while Employee was in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseactive employ of the Subsidiary.
Appears in 1 contract
Samples: Change in Control and Employment Agreement (Oglebay Norton Co /Ohio/)
Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company terminates the Executive’s If Employee's employment during the Severance Period other than is terminated pursuant to Section 3(a)(i4(b) (death) or Section 4(c) (disability), 3(a)(ii) or 3(a)(iii), or if the Executive terminates Executive’s employment pursuant to Section 3(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409A, the Company will pay to the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) Employee's Base Salary and will continue to provide to the Executive the other benefits described in Annex A for the periods described therein.
(b) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and shall cease as of the date of such change.
(c) Unless otherwise expressly provided by termination, and Employee shall be eligible for bonus compensation for the applicable plan, program or agreement, after year in which his employment is terminated as follows: With respect to the occurrence of a Change in ControlCompany Performance Goal, the Company will pay in cash bonus shall be determined as if Employee's employment had not terminated during such calendar year, except that Employee's bonus shall equal the amount which the bonus would have been with respect to such Goal multiplied by a fraction, the Executive a lump sum amount equal to numerator of which is the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance periodcalendar year during which Employee was employed by the Company and the denominator of which is the number of days in such calendar year. With respect to his Individual Performance Goals, Employee acknowledges that those are unique goals personal to Employee and that the determination of whether such Goals shall have been met shall be made as of the date of termination of employment. Such payments will determination shall be made by a Responsible Officer within 60 days following termination of Employee's employment. If it is determined that his Individual Performance Goals were achieved, in whole or in part, to the extent necessary to achieve all or a portion of the bonus for Individual Performance Goals for such year, such payment shall be made promptly following such determination.
b) If Employee's employment is terminated pursuant to Section 4(a) (by Employee following end of Employment Term) or Section 4(d) (by the Company For Cause), Employee's Base Salary and other benefits shall cease as of the date of termination, and Employee shall not be entitled to any bonus for the calendar year during which his employment shall be terminated or at any time thereafter.
c) If Employee's employment is terminated pursuant to Section 4(e) (by the Company other than For Cause) prior to the end of the Employment Term, Employee shall be: (A) entitled to continue to receive Base Salary in accordance with Section 3 of this Agreement through the end of the Employment Term, payable when and in the manner as if Employee's employment had not terminated; (B) unless otherwise prohibited by the Group Benefit Plans, entitled to receive benefits (other than vacation) under Section 3 of this Agreement until the earlier of (x) the date prescribed Employee accepts other employment or the end of the Employment Term; provided, however, that if insurance benefits do not commence for payment pursuant some grace period following commencement of Employee's new employment, the benefits under this Agreement shall continue until the earlier of the end of such grace period or 90 days from commencement of employment (and Employee agrees to promptly notify the Company of his acceptance of other employment); and (C) eligible for bonus compensation through the end of the calendar year in which his employment terminates. With respect to the applicable planCompany Performance Goal, program the bonus shall be determined as if Employee's employment had not terminated (without proration). With respect to Individual Performance Goals, Employee acknowledges that those are unique goals personal to Employee and Employee shall be eligible for a bonus with respect such Goals only for the year in which his employment shall be terminated and then based upon whether those Goals shall have been met as of the date of termination of employment. Such determination shall be made by a Responsible Officer within 60 days following termination of Employee's employment. If it is determined that such Goals are achieved, in whole or agreement and (y) within five business days after in part, to the Termination Dateextent necessary to achieve all or a portion of the bonus for the Individual Performance Goals for such year, and will such payment shall be payable and calculated disregarding any otherwise applicable vesting requirementspromptly made following such determination.
(d) To If Employee terminates his employment in breach of this Agreement prior to the extent required in order end of the Employment Term, Employee shall as of the date of termination cease to avoid accelerated taxation and/or tax penalties under Section 409Abe entitled to Base Salary, amounts that would otherwise benefits or bonuses. In addition, the Company shall be payable and benefits that would otherwise be provided entitled to seek any other available remedies pursuant to this Agreement during or otherwise for such breach, and to offset against any amounts due Employee any damages suffered as a result of such breach.
e) In the six-month period immediately following the Executive’s event of termination of Employee's employment pursuant to Section 4(d) (by the Company For Cause), and subject to applicable law and regulations, the Company shall instead be paid on entitled to offset against any payments due Employee the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s deathloss and damage, if earlierany, which shall have been suffered by the Company as a result of the acts or omissions of Employee giving rise to termination under Section 4(d). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A The foregoing shall not be treated construed to limit any cause of action, claim or other rights which the Company may have against Employee in connection with such acts or omissions.
f) Employee acknowledges that the Company has the right to terminate Employee's employment other than For Cause and that such termination shall not be a breach of this Agreement or any other express or implied agreement between the Company and Employee. Accordingly, in the event of such termination, Employee shall be entitled only to those benefits specifically provided for in this Agreement in the event of such termination, and shall not have any other rights to any compensation or damages from the Company for breach of contract.
g) If Employee's employment is terminated by the Company pursuant to Section 4(d) (by the Company For Cause) or by Employee in breach in this Agreement on or prior to April 13, 1999, Employee shall reimburse the Company for the Signing Bonus paid by the Company. Such reimbursement shall be made within 10 days following the termination of Employee's employment. The Company shall have the right to offset against any payments due from the Company to Employee all or any portion of such Signing Bonus required to be reimbursed by Employee.
h) Employee acknowledges that in the event of termination of his employment for any reason, he shall not be entitled to any severance or other compensation from the Company except as deferred compensation unless applicable law requires otherwisespecifically provided in this Section 5. Without limitation on the generality of the foregoing, this Section supersedes any plan or policy of the Company which provides for severance to its officers or employees, and Employee shall not be entitled to any benefits under any such plan or policy.
Appears in 1 contract
Severance Compensation. (a) If, following the occurrence of a Change in Control, the Company terminates Employer shall terminate the Executive’s 's employment during the Severance Period Term of this Agreement other than pursuant to Section 3(a)(i), 3(a)(ii10(a) or 3(a)(iii)hereof, or if the Executive terminates Executive’s shall terminate his employment pursuant to Section 3(b10(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Ahereof, the Company will Employer shall continue to provide the following benefits and shall further pay to the Executive the following amounts described in Annex A within five business days after the date (the "Termination Date") that the Executive's employment is terminated (the effective date of which shall be the date of termination or such other date that may be specified by the Executive if the termination is pursuant to Section 10(b) hereof):
(i) In lieu of any further payments to the Executive for periods subsequent to the Termination Date, but without affecting the rights of the Executive referred to in Section 4(b) hereof, a lump sum payment (the "Severance Payment") in an amount equal to the present value (using a discount rate required to be utilized for purposes of computations under Section 280G of the Code or any successor provision thereto, or if no such rate is so required to be used, a rate equal to the then-applicable interest rate prescribed by the Pension Benefit Guarantee Corporation for benefit valuations in connection with non-multiemployer pension plan terminations assuming the immediate commencement of benefit payments (the "Discount Rate")) of the sum of (A) the aggregate Base Compensation (at the highest rate in effect for any period prior to the Termination Date) for each remaining year or partial year of the Term of this Agreement which the Executive would have received had such termination or breach not occurred, plus (B) the aggregate Incentive Compensation (determined in accordance with the standards set forth in Section 3(b) hereof), which the Executive would have received pursuant to this Agreement or any agreement, policy, plan, program or arrangement referred to therein during the remainder of the Term of this Agreement had his employment continued for the remainder of the Term of this Agreement (in which event the Executive will no longer be entitled to Incentive Compensation under any such agreement, policy, plan, program or arrangement except for Incentive Compensation to which he was entitled for service prior to the Termination Date).
(ii) For the remainder of the Term of this Agreement, the Employer shall arrange to provide the Executive with Employee Benefits that are welfare benefits, but not stock option, stock purchase, stock appreciation, or similar compensatory benefits, substantially similar to those which the Executive was receiving or entitled to receive immediately prior to the Termination Date (subject and if and to the provisions extent that such benefits shall not or cannot be paid or provided under any policy, plan, program or arrangement of the Employer or any Subsidiary, as the case may be, then the Employer shall itself pay or provide for the payment to the Executive, his dependents and beneficiaries, such Employee Benefits). Without otherwise limiting the purposes or effect of Section 4(d) 10 hereof, Employee Benefits otherwise receivable by the Executive pursuant to the first sentence of this AgreementSection 4(a)(ii) shall be reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during such period following the Executive's Termination Date, and will continue any such benefits actually received by the Executive shall be reported by the Executive to provide the Employer. Notwithstanding the foregoing, the remainder of the Term of this Agreement shall be considered service with the Employer for the purpose of determining service credits and benefits due and payable to the Executive under the benefits described in Annex A for Employer's retirement income, supplemental executive retirement and other benefit plans of the periods described thereinEmployer applicable to the Executive or his beneficiaries immediately prior to the Termination Date.
(b) Upon written notice given by the Executive to the Employer prior to the occurrence of a Change in Control, the Executive, at his sole option, without reduction to reflect the present value of such amounts as aforesaid, may elect to have all or any of the Severance Payment payable pursuant to Section 4(a)(i) hereof paid to him on a quarterly or monthly basis during the remainder of the Term of this Agreement.
(c) Without limiting the rights of the Executive at law or in equity, if the Company Employer fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will Employer shall pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(c) Unless otherwise expressly provided by the then-applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirementsDiscount Rate.
(d) To Notwithstanding any other provision hereof, the extent required in order to avoid accelerated taxation and/or tax penalties parties' respective rights and obligations under this Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to 4 will survive any termination or expiration of this Agreement during or the six-month period immediately following termination of the Executive’s termination of 's employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwisereason whatsoever.
Appears in 1 contract
Samples: Employment Agreement (Om Group Inc)
Severance Compensation. If the Employee's employment is terminated, the following severance provisions will apply:
(a) If, following If the occurrence of a Change in Control, Employee's employment is terminated by the Company terminates the Executive’s employment during the Severance Period other than pursuant for Cause or is terminated by the Employee for Good Reason, then, through the remaining Employment Term as specified in Subsection 1(b) hereof, determined without regard to Section 3(a)(i)Subsection 1(b)(ii) hereof, 3(a)(ii(such remaining Employment Term calculated without regard to Subsection 1(b)(ii) or 3(a)(iii)is hereinafter referred to as the "Payment Term") the Company shall:
(i) continue to pay the Employee's annual base salary in the then prevailing amount and at the times specified in Subsection 3(a) hereof, or if such annual base salary has decreased during the Executive terminates Executive’s employment pursuant to Section one year period ending on the Employee's termination of employment, at the highest rate in effect during such one year period;
(ii) continue the Employee's participation in the Bonus Plan as provided in Subsection 3(b) hereof provided that the Company will:
(any such terminationA) pay the Employee a bonus under the Bonus Plan for the partial year period ending on the date of the Employee's termination of employment calculated as if the Employee had continued to be employed for the entire year except that the Employee's bonus percentage (calculated at the time and in the manner customary as of the date of this Agreement, but disregarding the termination of employment of the Employee) shall be applied to the Employee's annual base salary payable in accordance with Subsection 3(a) hereof for the partial year period ending on the Employee's termination of employment; and
(B) thereafter, during the remainder of the Payment Term, a “Triggering Termination”bonus equal to the Employee's Target Annual Bonus Percentage, multiplied by the Employee's annual base salary in the amount specified in Subsection 5(a)(i) payable during the year (or portion thereof) for which the bonus is being calculated; with such amounts being payable when bonuses under the Bonus Plan are customarily payable, except that the final bonus shall be payable with the final payment of the annual base salary under Subsection 5(a)(i) hereof;
(iii) continue in effect the medical and dental coverage, long and short-term disability protection, and any life insurance protection (including life insurance protection being paid for by the Employee), being provided to the Employee immediately prior to the Employee's termination of employment, or if any of such benefits have decreased during the one year period ending on the Employee's termination of employment, at the highest level in effect during such one year period;
(iv) pay for executive outplacement services for the Employee from a nationally recognized executive outplacement firm at the level provided for vice-presidents of major corporations, provided that such Triggering Termination constitutes outplacement services will be provided for a “separation from service” as defined in Section 409A, one year period commencing on the Company will pay to date of termination of employment regardless of the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described thereinPayment Term.
(b) Without limiting If the rights of Employee's employment hereunder terminates due to the Executive at law or in equityEmployee's death, if disability, termination by the Company fails for Cause or termination by the Employee other than for Good Reason, then no further compensation or benefits will be provided to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Employee by the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of under this Agreement following the date of such changetermination of employment other than payment of compensation earned to the date of termination of employment but not yet paid. As more fully and generally provided in Section 15 hereof, this Subsection 5(b) shall not be interpreted to deny the Employee any benefits to which he may be entitled under any plan or arrangement of the Company applicable to the Employee. Likewise, this Subsection 5(b) shall not be interpreted to entitle the Employee to a bonus under the Bonus Plan following his termination of employment except as provided in the Bonus Plan which requires employment on the last day of the Company's taxable year as a condition to receipt of a bonus thereunder for such year except in the cases of death, disability or retirement at or after either age 58.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change Notwithstanding anything contained in Control, the Company will pay in cash this Agreement to the Executive a lump sum amount equal to contrary, other than Section 15 hereof, if the sum of (i) Employee breaches any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purposeEmployee's obligations under Section 8 or 9 hereof, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such no further severance payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and other benefits will be payable and calculated disregarding any otherwise applicable vesting requirementsto the Employee under this Section 5.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In addition, for purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Appears in 1 contract
Severance Compensation. (a) IfUpon termination of employment for any reason, following the Executive shall be entitled to: (A) all Base Salary earned through the date of termination to be paid according to Section 4; (B) any Annual Bonuses, pro-rated, to be paid in accordance with Section 5(a) and Section 5(b) above (unless termination is for Cause, as defined below) ; (C) all accrued but unused vacation time, and (d) reimbursement of all reasonable expenses as set forth in Section 8.
(b) Upon termination of employment by Company for any reason other than for cause (“Cause”) as defined in Section 11(c), or upon termination of employment by Executive for good reason (“Good Reason”) as defined in Section 11(d)(1), Executive shall be entitled to receipt of all vested and unvested shares contemplated in the Executive Award in accord with the any vesting schedule as if no termination occurred.
(c) In the event of a termination by the Company without Cause, by the Executive for Good Reason or by the Executive within one hundred eighty days (180) days of the occurrence of a Change of Control (as defined below) and subject to the additional provisions of Section 11(d)(3), then in Controladdition to the severance compensation set forth in Section 6(a) and 6(b), Executive shall also be entitled to the following enhanced separation benefits (“Enhanced Separation Benefits”): (i) the greater of Executive’s continued Base Salary through the balance of the Employment Period, as renewed, or twenty-four (24) months of Executive’s then Base Salary; (ii) continued participation in Company welfare benefit plans (including health benefits) on the same terms as immediately prior to termination and to be paid in full by the Company terminates for the period of time set forth in this Section 6(c) (not to be less than twelve (12) months of continuation of benefits) and (iii) immediate vesting of all stock options/equity awards.
(d) Upon termination of Executive’s employment during the Severance Period other than continued benefits (either pursuant to Section 3(a)(i6(a), 3(a)(ii6(b) or 3(a)(iii6(c) as the case may be), or if the Executive terminates Executivemay continue coverage with respect to the Company’s employment pursuant to Section 3(bgroup health plans as permitted by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) (any such termination, a for himself and each of his “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from serviceQualified Beneficiaries” as defined in Section 409A, by COBRA (“COBRA Coverage”). The Company shall reimburse the Company will pay to amount of any COBRA premium paid for COBRA Coverage timely elected by and for the Executive the amounts described in Annex A within five business days after the Termination Date (subject to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights any Qualified Beneficiary of the Executive at law or in equityExecutive, if and not otherwise reimbursed, during the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest period that ends on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such change.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier earliest of (x) the date prescribed the Executive or the Qualified Beneficiary, as the case may be, ceases to be eligible for payment pursuant to the applicable planCOBRA Coverage, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
last day of the consecutive eighteen (d18) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the date of the Executive’s termination of employment shall instead be paid on the first business day after and (z) the date that the Executive or the Qualified Beneficiary, as the case may be, is six months following covered by another group health plan. To reimburse any COBRA premium payment under this paragraph, the Executive’s termination Company must receive documentation of employment the COBRA premium payment within ninety (or upon the Executive’s death, if earlier). In addition, for purposes 90) days of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseits payment.
Appears in 1 contract
Samples: Executive Employment Agreement (Red Cat Holdings, Inc.)
Severance Compensation. Upon termination of Executive's employment prior to expiration of the Employment Period unless the Executive's employment is terminated for Cause or Executive terminates his employment without Good Reason, the Executive shall be entitled to receive any and all reasonable expenses paid or incurred by the Executive in connection with and related to the performance of his duties and responsibilities for the Company during the period ending on the termination date, any accrued but unused vacation time through the termination date in accordance with Company policy and an amount equal to (a) If, following the occurrence of a Change in Control, the Company terminates the Executive’s employment 's Base Salary during the Severance Period other than pursuant to Section 3(a)(iprior six months and (b) Bonus and Override Bonus during, prior six months (the “Separation Period”), 3(a)(ii) or 3(a)(iii), or if as in effect as of the Executive terminates Executive’s employment pursuant to Section 3(b) date of termination (any such termination, a the “Triggering TerminationSeparation Payment”), provided that such Triggering Termination constitutes a “separation Executive executes an agreement releasing Company and its affiliates from service” any liability associated with this Agreement in form and terms satisfactory to the Company and complies with his other obligations under this Agreement as defined provided in Section 409A12 and 13 hereof, as a condition to such Separation Payment. In the Company will pay event that either party provides the other party with written notice not to renew this Agreement at least three (3) months prior to the Executive expiration of the amounts described in Annex A within five business days Employment Period pursuant to Paragraph 2 and the Company, after the Termination Date (subject such notice, terminates Executive's employment prior to the provisions of Section 4(d) of this Agreement) and will continue to provide to the Executive the benefits described in Annex A for the periods described therein.
(b) Without limiting the rights expiration of the Executive at law or in equityEmployment Period, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the “prime rate” as set forth from time to time during the relevant period in The Wall Street Journal “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date of such changetermination for purposes of this Paragraph 6 shall be construed to be the expiration of the Employment Period; the effect which shall be that Executive shall continue to receive his Base Salary, Bonuses and other perquisites and benefits specified in this Agreement through the stated Employment Period after which the Severance Compensation as specified in this Paragraph 6 shall commence. [For purposes of illustration, in the event that Executive notifies Company on September 15, 2014 of his intention not to renew this Agreement and Company, on September 16, 2014 terminates Executive's employment, Executive shall be entitled to receive his Base Salary, Bonuses and other perquisites and benefits specified in this Agreement in full through December 31, 2014 as if still employed by Company with the Severance Compensation specified in this Paragraph 6 to commence on January 1, 2015.
(c) Unless otherwise expressly provided by the applicable plan, program or agreement, after the occurrence of a Change in Control] In addition, the Company will pay in cash to the Executive a lump sum amount equal to the sum Executive's cost of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments COBRA coverage will be made at the earlier covered for a period of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination date of employment (or upon the Executive’s death, if earlier)termination. In addition, for purposes of this Agreement, each amount to The Separation Payment shall be paid or benefit to be provided shall be construed as a separate identified payment for purposes in in accordance with the customary payroll practices of Section 409A, and any payments described in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwiseCompany.
Appears in 1 contract
Samples: Executive Employment Agreement (IZEA Holdings, Inc.)
Severance Compensation. (a) If, following the occurrence of a Change in of Control, the Company terminates the Executive’s employment during the Severance Period of Employment other than pursuant to Section 3(a)(i), 3(a)(ii4(a) or 3(a)(iii)hereof, or if the Executive terminates the Executive’s employment pursuant to Section 3(b4(b) (any such termination, a “Triggering Termination”), provided that such Triggering Termination constitutes a “separation from service” as defined in Section 409Ahereof, the Company will pay to the Executive an amount equal to the amounts described greater of (on an “after-tax basis”), (1) the Severance Payment specified in Annex A within five business days after Section 5(a)(i) hereof (the Termination Date “Severance Payment”) or (2) the maximum lesser amount (the “Maximum Amount”) that would not cause the Severance Payment to be made hereunder (when considered with all other payments made to the Executive under this Agreement or otherwise as a result of the termination of the Executive’s employment that are subject to section 280G of the Code (“Parachute Payments”) to be subject to the provisions excise tax imposed by section 4999 of the Code (the “Excise Tax”). In the event that it is determined that the Maximum Amount would be the greater payment on an after-tax basis, the Severance Payment specified in Section 4(d5(a)(i) will be reduced by the amount necessary to avoid application of this Agreementthe Excise Tax. The Severance Payment described in Section 5(a)(1) or the Maximum Amount described in Section 5(a)(2), as applicable, will be paid on the date that is six (6) months and will continue to provide one (1) day after the date that the Executive’s employment is terminated (the “Termination Date”):
(i) The payment payable to the Executive pursuant to this Section 5(a)(i) will be a lump sum payment in an amount equal to one hundred fifty percent (150%) of the benefits Base Pay otherwise payable to the Executive during the remainder of the Period of Employment.
(ii) Not more than fifteen (15) days following the termination of the Executive’s employment, the Company agrees to notify the Executive in writing (A) whether the Severance Payment pursuant to Section 5(a)(i) when added to any other Parachute Payments exceeds an amount (the “299% Amount”) equal to 299% of the Executive’s “base amount” as defined in Section 280G(b)(3) of the Code, (B) the amount that is equal to the 299% Amount, (C) whether the Severance Payment described in Annex A for Section 5(a)(1) or the periods Maximum Amount pursuant to Section 5(a)(2) is greater on an after-tax basis and (C) if the Maximum Amount in Section 5(a)(2) is the greater amount, the amount that the Severance Payment must be reduced to equal such Maximum Amount.
(iii) The calculation of the 299% Amount, the determination of whether the Severance Payment described thereinin Section 5(a)(1) or the Maximum Amount pursuant to Section 5(a)(2) is greater on an after-tax basis and, if the Maximum Amount in Section 5(a)(2) is the greater amount, the determination of how much the Severance Payment must be reduced in order to avoid application of the Excise Tax will be made by the Company’s public accounting firm (the “Accounting Firm”) in accordance with Section 280G of the Code or any successor provision thereto. The costs of obtaining such determination will be borne by the Company.
(b) There will be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payment to or benefit (including Employee Benefits) of the Executive provided for in this Agreement.
(c) If, following the occurrence of a Change of Control, the Company terminates the Executive’s employment during the Period of Employment other than pursuant to Section 4(a)(i) or 4(a)(ii) hereof, or if the Executive terminates the Executive’s employment pursuant to Section 4(b) hereof, all un-expired, un-forfeited and un-exercised stock options held by the Executive immediately prior to such termination of employment will become immediately vested and exercisable pursuant to their terms, regardless of whether or not the vesting/performance conditions set forth in the relevant Stock Option Agreements shall have been satisfied in full. The rights of the Executive pursuant to the terms and conditions of this Section 5(c) will be in addition to any rights granted to the Executive pursuant to the terms and conditions of any Stock Option Agreement evidencing the grant by the Company of stock options to the Executive, whether granted before or after the execution and delivery of this Agreement.
(d) Without limiting the rights of the Executive at law or in equity, if the Company fails to make any payment or provide any benefit required to be made or provided hereunder on a timely basis, the Company will pay interest on the amount or value thereof at an annualized rate of interest equal to the then-applicable Prime Rate (as hereinafter defined) or, if lesser, the highest rate allowed by applicable usury laws. As used herein, the term “prime ratePrime Rate” as set forth means the rate of interest published from time to time during by the relevant period in The Wall Street Journal Journal, and designated as the Prime Rate in the “Money Rates” column, plus 200 basis points, compounded monthly, or, if less, the maximum rate legally allowed. Such interest will be payable as it accrues on demand. Any change in such prime rate will be effective on and as of the date section of such change.
(c) Unless otherwise expressly provided by publication. If such publication describes the applicable plan, program or agreement, after the occurrence Prime Rate as a range of a Change in Control, the Company will pay in cash to the Executive a lump sum amount equal to the sum of (i) any unpaid Incentive Pay that has been earned, accrued, allocated or awarded to the Executive for any performance period that by its terms as in effect prior to a Triggering Termination has been completed (any such period, a “Completed Performance Period”) (regardless of whether payment of such compensation would otherwise be contingent on the continuing performance of services by the Executive) and (ii) the Pro Rata Portion of the Incentive Pay Target in effect for any subsequent performance period. For this purpose, “Pro Rata Portion” means (x) the number of days from and including the first day immediately following the last day of the immediately preceding Completed Performance Period to and including the Termination Date, divided by (y) the total number of days in such subsequent performance period. Such payments will be made at the earlier of (x) the date prescribed for payment pursuant to the applicable plan, program or agreement and (y) within five business days after the Termination Date, and will be payable and calculated disregarding any otherwise applicable vesting requirements.
(d) To the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executive’s termination of employment shall instead be paid on the first business day after the date that is six months following the Executive’s termination of employment (or upon the Executive’s death, if earlier). In additionrates, for purposes of this Agreement, each amount to the Prime Rate will be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments described the highest rate designated in Annex A that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwisesuch range.
Appears in 1 contract
Samples: Change of Control/Severance Agreement (Chaparral Steel CO)