Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows: (i) upon the death of Employee; (ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days; (iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee; (iv) by Employer without Cause upon delivery of a Notice of Termination to Employee; (v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or (vi) by Employee upon delivery of a Notice of Termination to Employer. (b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate: (i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and (ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death. (c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall: (i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and (ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled. (d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly. (e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee. (f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following: (i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e); (ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and (iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee. (g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly. (h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year. (i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 2 contracts
Samples: Employment Agreement (Southern First Bancshares Inc), Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. In the event that the Employer is subject to Part 359 of the FDIC Rules and Regulations (12 C.F.R. § 359, et seq.), any severance payment to be paid pursuant to this section 13 will be made only as permitted by applicable federal regulations.
(a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the year end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the year end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first date that is six (6) months and one (1) day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through For the avoidance of doubt, in no event will the aggregate amount of such severance compensation exceed the Employee’s Base Salary at the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date that is six (6) months and one (1) day following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall provide pay Employee with the same monthly severance compensation and accrued bonus set forth in Section 13(e);
cash in an amount equal to one-twelfth (ii1/12th) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in Employee’s Base Salary at the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination. For the avoidance of doubt, Employee in no event will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share aggregate amount of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following severance compensation exceed the Employee’s Termination Base Salary at the date of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the termination. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employmentTermination of Employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of the Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employer and the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, enter into a mutually satisfactory form of release acknowledging and may not revoke such release within the revocation period stated in such release, which shall acknowledge such remaining obligations and discharging discharge both parties, as well as the Employer’s officers, directors and employees with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Employee’s employment by the Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. HoweverFurther provided that, if such severance payment is made by the Employer, and if the sixty (60-) day period spans two (2) calendar years, regardless of when such release is executed by the Employee, such severance payment will must be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (CB) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (DC) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (ED) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i13(h) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to the Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d26(e)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b26(c)) upon delivery of a Notice of Termination (as defined in subsection 26(g26(j)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by the Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of 12 months following a Change in Control (as defined in subsection 26(c26(g)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and.
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the CompanyEmployer’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section Section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the CompanyEmployer’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i13(h) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth sixth (1/12th1/6th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive Furthermore, the noncompetition covenants contained in sections 10, 11 and Section 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, Reason following a Change in addition to other rights and remedies available in law or equityControl, Employee shall be entitled to the following:
(i) Subject to the conditions set forth in Section 13(e) (a release and possibility of a six-month delay described below in Section 29(a)), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the CompanyEmployer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the CompanyEmployer’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the CompanyEmployer’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the restrictive covenants noncompetition covenant contained in sections 10, 11 and Section 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee prior to a Change in Control for any reason and following a Change in Control without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release agreeable to Employer and provided to Employee at or following the date of termination, acknowledging such Employee’s remaining obligations obligations, and discharging both partiesreleasing Employer, as well as Employer’s and their officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
Termination and Severance Payments. (a) EmployeeIf the Company terminates Executive’s employment under this Agreement may for Cause, or if Executive terminates his employment voluntarily and without Good Reason, Executive shall receive any and all earned but unpaid wages within seven (7) business days or the Company’s next regular payday, whichever comes first, and Executive shall be terminated prior promptly paid for any incurred but unpaid reimbursable business expenses (collectively, the “Termination Payments”). Executive shall not be entitled to any further compensation from the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to EmployerCompany.
(b) If Employeethe Company terminates Executive’s employment is terminated because (which includes the Company’s termination of Executive’s employment by its non-renewal of this Agreement as provided in Section 6(b)(iii)) without Cause or if the Employee’s deathExecutive terminates his employment for Good Reason, Employer Executive shall pay Employee’s estate:
receive (i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurredTermination Payments, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
and (ii) provided Executive executes and does not revoke a general release of claims against the Company in the form attached hereto (the “Release”), severance pay equal to twelve (12) months of the Base Salary (the “Severance Payments”). The Severance Payments shall be paid to Executive as a salary continuation beginning on the Company’s first regular payday following the sixtieth (60th) day after the date Executive incurs a separation from service (as defined in Code Section 409A); provided, any bonus earned or accrued through payments that would have been made during such sixty (60)-day period if Executive’s Base Salary had continued uninterrupted after the date of death. Any bonus for previous years which was not yet paid his separation from service will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid a lump-sum on the earlier ofdate his Severance Payments commence; provided that: (i) seventy if the sixty (70) days after 60)-day period following the end separation from service crosses calendar years, if necessary to comply with Section 409A of the year in which Code payment shall not commence until the Employee died or second calendar year; and (ii) with if the first payroll cycle following Release has not been fully executed by Executive or the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-basedseven (7)-day revocation period has not passed, the amount of the bonus any payments due before those two events will be calculated by taking into account the performance of the Employer for the entire year forfeited and prorating this through the date of Employee’s deathshall not be paid.
(c) During The Company agrees to reimburse you for the costs of COBRA coverage for you and your dependents for the twelve (12)-month Severance Payments period, less the amount paid for such coverage by active employees of the Company. COBRA payments will cease following the twelve (12)-month Severance Payments period of any Disability leading up or should Executive secure alternative medical coverage elsewhere. Executive shall provide timely notification to the termination of Employee’s employment as a result of Company if Executive secures alternate medical coverage during the Disability, Employer shall:
twelve (i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee 12)-month Severance Payments period. Such reimbursements shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
made within thirty (ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (7030) days after the end Executive pays those COBRA premiums and submits copies of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject relevant invoices to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month Company for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be expenses paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated directly by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant Executive to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employeethird party.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (JOINT Corp)
Termination and Severance Payments. (a) Employee’s employment under this Agreement may be terminated prior to the end of the Term only as follows:
(i) upon the death of Employee;
(ii) by Employer upon the Disability (as defined in subsection 26(d)) of Employee for a period of one hundred and eighty (180) days;
(iii) by Employer for Cause (as defined in subsection 26(b)) upon delivery of a Notice of Termination (as defined in subsection 26(g)) to Employee;
(iv) by Employer without Cause upon delivery of a Notice of Termination to Employee;
(v) by Employee for Good Reason (as defined in subsection 26(e)) upon delivery of a Notice of Termination to the Employer within a ninety (90) day period beginning on the thirtieth (30th) day after the occurrence of a Change in Control (as defined in subsection 26(c)) or within a ninety (90) day period beginning on the one (1) year anniversary of the occurrence of a Change in Control; or
(vi) by Employee upon delivery of a Notice of Termination to Employer.
(b) If Employee’s employment is terminated because of the Employee’s death, Employer shall pay Employee’s estate:
(i) any sums due Employee as Base Salary and/or reimbursement of expenses through the end of the month during which death occurred, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly; and
(ii) any bonus earned or accrued through the date of death. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of death will be paid on the earlier of: (i) seventy (70) days after the end of the year in which the Employee died or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee died. To the extent that the bonus is performance-based, the amount of the bonus will be calculated by taking into account the performance of the Employer for the entire year and prorating this through the date of Employee’s death.
(c) During the period of any Disability leading up to the termination of Employee’s employment as a result of the Disability, Employer shall:
(i) continue to pay the Employee’s full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly, until Employee becomes eligible for benefits under any long-term disability plan or insurance program maintained by Employer; provided that the amount of any such payments to Employee shall be reduced by the sum of the amounts, if any, payable to Employee for the same period under any disability benefit or pension plan covering the Employee; and
(ii) pay Employee any bonus earned or accrued through the date of Disability. Any bonus for previous years which was not yet paid will be paid pursuant to the terms as set forth in section 4(a). Any bonus that is earned in the year of Disability will be paid on the earlier of: (i) seventy (70) days after the end of the year in which Employee became Disabled or (ii) with the first payroll cycle following the Company’s press release announcing its financial performance for the year in which the Employee became Disabled.
(d) If Employee’s employment is terminated for Cause, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(e) If Employee’s employment is terminated by Employer without Cause, conditioned upon the effectiveness of the release described in Section 13(i) below and subject to the possibility of a six-month delay described below in Section 29(a), beginning on the first day of the month following the date of the Employee’s termination, and continuing on the first day of the month for the next eleven (11) months, the Employer shall pay to the Employee monthly severance compensation in cash in an amount equal to one-twelfth (1/12th) of the Employee’s annual rate of Base Salary at the date of termination. Employer shall also pay Employee any bonus earned or accrued through the date of termination. Any bonus for previous years, which was not yet paid, will be paid as stated in Section 4(a) of this Agreement. The restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(f) If Employee’s employment is terminated by Employee for Good Reason, in addition to other rights and remedies available in law or equity, Employee shall be entitled to the following:
(i) Subject to the possibility of a six-month delay described below in Section 29(a), beginning on the date following the date of the Employee’s termination, the Employer shall provide Employee with the same severance compensation and accrued bonus set forth in Section 13(e);.
(ii) Employee may continue participation, in accordance with the terms of the applicable benefits plans, in the Company’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). In accordance with COBRA, assuming Employee is covered under the Company’s group health plan as of his date of termination, Employee will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”). If Employee elects COBRA coverage for group health coverage, he will be obligated to pay the portion of the full COBRA cost of the coverage equal to an active employee’s share of premiums for coverage for the respective plan year and the Company’s share of such premiums shall be treated as taxable income to Employee. Notwithstanding the above, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) shall be limited to the extent that if Employee obtains any coverage pursuant to a subsequent employer’s benefit plans which duplicates the Employer’s coverage, the duplicative coverage may be terminated by Employer. This subsection (ii) shall not be interpreted so as to limit any benefits to which Employee or his dependents or beneficiaries may be entitled under any of Employer’s employee benefit plans, programs, or practices following the Employee’s Termination of Employment, including, without limitation, retiree medical and life insurance benefits; and;
(iii) the restrictive covenants contained in sections 10, 11 and 12 shall not apply to Employee.
(g) If Employee’s employment is terminated by Employee without Good Reason, Employee shall receive only any sums due Employee as Base Salary and/or reimbursement of expenses through the date of termination, paid in accordance with Employer’s standard payroll procedures, but in any case, no less frequently than monthly.
(h) With the exceptions of the provisions of this section Section 13, and the express terms of any benefit plan under which Employee is a participant, it is agreed that, upon termination of Employee’s employment, Employer shall have no obligation to Employee for, and Employee waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). Unless otherwise stated in this section Section 13, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units, or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives. Within sixty (60) days of termination of Employee’s employment, and as a condition to the Employer’s obligation to pay any severance hereunder, the Employee shall execute, and not timely revoke during any revocation period provided pursuant to such release, a mutually satisfactory form of release acknowledging such remaining obligations and discharging both parties, as well as Employer’s officers, directors and employees with respect to their actions for or on behalf of Employer, from any other claims or obligations arising out of or in connection with Employee’s employment by Employer, including the circumstances of such termination. In most instances, payment will be made, or in the case of installment payments, will begin as soon as practicable after such release is effective. However, if the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year.
(i) The parties intend that the severance payments and other compensation provided for herein are reasonable compensation for Employee’s services to Employer and shall not constitute “excess parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations thereunder. If the Employer’s independent accountants acting as auditors for the Employer determine that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Employee (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise), (a “Payment”) would constitute an excess parachute payment and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Employee as a result of such reduction will exceed the net after-tax benefit that would have been received by the Employee if no such reduction were made. The Payment shall be reduced, if applicable, by the Employer in the following order of priority: (A) reduction of any cash payments otherwise payable to the Employee pursuant to a supplemental executive retirement plan including, without limitation, any salary continuation agreement between the Employee and the Employer; (B) reduction of any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code; (C) reduction of any other cash payments or benefits otherwise payable to the Employee that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (D) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (E) reduction of any other payments or benefits otherwise payable to the Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code. If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Employee and the Employee shall be responsible for payment of any Excise Taxes relating to the Payment.
Appears in 1 contract
Samples: Employment Agreement (Southern First Bancshares Inc)
