Termination of the Term. (a) Executive’s employment may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 30 days advance written notice of any resignation of Executive’s employment hereunder. Notwithstanding the foregoing, Executive’s employment shall automatically terminate upon Executive’s death. (b) Following any termination of Executive’s employment, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall cease, except as otherwise provided herein, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of any accrued but unpaid Base Salary and vacation time and for payment of any accrued obligations and unreimbursed expenses under Section 4(d) accrued or incurred through the date of termination of employment, (ii) for the non-deferred cash portion of any Annual Bonus earned in respect of the fiscal year prior to the fiscal year in which termination of employment occurs but unpaid as of the date of termination of employment (paid when such non-deferred cash portion of the Annual Bonus would otherwise be payable), (iii) for the COBRA Payments (as defined below), (iv) as set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies and (v) as otherwise expressly required by applicable statute. For the avoidance of doubt, the date of termination shall mean the last date of actual and active employment, whether such day is selected by mutual agreement with Executive or unilaterally by the Company and whether with or without advance notice. Notwithstanding the above, if Executive’s employment is terminated for Cause or if he resigns his employment without Good Reason, Executive shall not be entitled to receive any previously unpaid portion of the current or prior year’s Annual Bonus or COBRA Payments. (i) If, prior to the expiration of the then current Renewal Term, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason (defined below), then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d)) to: (A) Severance pay equal to Executive’s then monthly Base Salary for a period equal to twelve (12) months, payable during the period immediately following such termination in substantially equal monthly installments consistent with the Company’s payroll practices; (B) Vesting of the Initial Equity Grant as provided in Section 4(f); (C) Vesting on the date the Release Condition is satisfied of 100% of the unpaid deferred cash portion of Annual Bonuses awarded for fiscal years prior to the fiscal year in which termination occurs and payment thereof on their scheduled payment dates, i.e., no acceleration of payment except to the extent Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may require acceleration of up to 50% of amounts deferred before September 30, 2013), and vesting of 100% of the unvested equity portion of such Annual Bonuses, such that 100% of Executive’s unvested Options and Restricted Stock shall vest and the restrictions on 100% of Executive’s Restricted Stock shall lapse, on the date such unvested Options and Restricted Stock would otherwise vest (and the restrictions on such Restricted Stock would lapse) had Executive remained an employee of the Company on such dates, provided that the Release Condition (defined below) is satisfied (and any unvested Options and Restricted Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be forfeited before satisfaction of the Release Condition but shall expire or be forfeited promptly if and when the Release Condition is not satisfied), and provided further that Executive will be responsible for satisfying any tax withholding obligations that may arise at the time they arise (which may include, for Restricted Stock, taxation when employment ends) but may elect to cause the Company to withhold or repurchase shares (to the statutory minimum tax withholding levels and subject to the Debt Limitations). With respect to any Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six (6) months after the date of the vesting of such Options within which to exercise such Options, but in no event shall such exercise period be longer than the 10th anniversary of the date of grant of such Option (or such earlier date as provided under Sections 12 or 13 of the 2011 Equity Plan or comparable provisions in a subsequent governing equity compensation plan). For the avoidance of doubt, any deferred cash shall remain subject to any reduction provisions applicable to members of senior management with respect to their deferred amounts from such prior years; provided that such deferral period shall not be longer than four fiscal years after the date such deferred cash was first granted; (D) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed, with payment of each installment to be made in cash and/or vested shares of Company common stock in the same proportions as annual bonuses are paid for such year to other executives in the form of cash and equity awards. One-half of such amount shall be paid to Executive in a lump sum payment within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment); and (E) If Executive elects health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then the Company will reimburse Executive for the cost of COBRA premiums in excess of the cost of such benefits that active employees of the Company are required to pay for a period of twelve (12) months or until Executive obtains individual or family coverage through another employer, whichever comes first (the “COBRA Period”), subject to the conditions that: (I) Executive is responsible for immediately notifying the Company if Executive obtains alternative insurance coverage, (II) Executive will be responsible for the entire COBRA premium amount, if any, with respect to periods after the end of the COBRA Period; and (III) if Executive declines COBRA coverage or the Company is unable to make the payments consistent with applicable nondiscrimination rules, then the Company will not make any alternative payment to Executive in lieu of paying for COBRA premiums (such COBRA reimbursement payments, the “COBRA Payments”). (ii) Notwithstanding any provision of Section 4(f) or Section 5(c)(i), if, in the period that begins sixty (60) days prior to the occurrence of a Change in Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing of a definitive agreement to enter into a Change in Control that actually results in a Change in Control) and ends upon the first anniversary of such Change in Control, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason, then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to: (A) Severance pay equal to two times the sum of (a) Executive’s then annual Base Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable Compensation (as defined in the Bonus Plan) in respect of the fiscal year in which the termination of employment occurs, the sum of which shall be paid in substantially equal monthly installments over a period of twenty four (24) months after such termination consistent with the Company’s payroll practices; (B) Vesting of the Initial Equity Grant as provided in Section 4(f); (C) Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for fiscal years prior to the year in which termination occurs, such that all unvested Options and Restricted Stock shall vest and the restrictions on all Restricted Stock shall lapse on the date the Release Condition is satisfied (and any such unvested Options and Restricted Stock that vest as a result of this Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the Release Condition (and any pre-closing period related to a Change in Control) but shall expire or be forfeited promptly if and when the Release Condition is not satisfied or the Change in Control does not occur); (D) 100% of the unpaid deferred cash portion of Annual Bonuses awarded for fiscal years prior to the fiscal year in which the termination occurs shall be paid within seventy-four (74) days following the later of the Change in Control or the effective date of cessation of employment (except to the extent Section 409A requires payment on the original timing); (E) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed. One-half of such amount shall be paid to Executive in a lump sum payment (in cash) within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment (in cash) in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment); (F) Outplacement services in accordance with Company policies in effect as of Executive’s last day of employment, provided, however, if Executive declines such services, then the Company will not make any alternative payment to Executive in lieu of paying for such services; and (G) COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18) months rather than twelve (12) months. Notwithstanding the foregoing, where required to avoid additional taxation under Section 409A, the Change in Control that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treas. Reg. § 1.409A-3(i)(5). In addition, any increase in compensation or benefits under this Section 5(c)(ii) in respect of a termination without Cause or resignation for Good Reason during the period in advance of a Change in Control provided above shall not occur unless and until the closing of the Change in Control. (iii) Any severance payments or benefits under Section 5(b)(iii) and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s having provided an irrevocable waiver and general release of claims in favor of the Company and its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing (collectively, the “Released Parties”), in the Company’s customary form (subject to modification by the Company to comply with changes in applicable laws) that has become effective and irrevocable in accordance with its terms within fifty-five (55) days after such termination of employment (the “Release Condition”) and (B) subject to Executive’s continued compliance with the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this Agreement. Payments and benefits which do not constitute nonqualified deferred compensation and are not subject to Section 409A (as defined below) shall commence five (5) days after the Release Condition is satisfied and payments and benefits which are subject to Section 409A shall commence on the sixtieth (60th) day after termination of employment (subject to further delay, if required pursuant to Section 20(d) below) provided that the Release Condition is satisfied. (iv) For purposes of this Agreement, “Cause” means: (A) Executive’s willful misconduct in the performance of his duties for the Company which causes material injury to the Company, (B) Executive’s willfully engaging in illegal conduct which is injurious to the Company, (C) Executive’s material breach of this Agreement, (D) Executive’s willful violation of the Company’s written policies in a manner that is detrimental to the best interests of the Company; (E) Executive’s fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company; (F) Executive’s act of personal dishonesty which results in personal profit in connection with Executive’s employment with the Company; (G) Executive’s breach of fiduciary duty owed to the Company; or (H) Executive’s negligent actions which result in the loss of a material amount of capital of the Company or its Affiliates (the Company shall make the determination of materiality and shall promptly communicate such determination to Executive); provided, however, that Executive shall be provided a ten (10) day period to cure any of the events or occurrences described in the immediately preceding clauses (C) or (D) hereof, to the extent curable. For purposes hereof, no act, or failure to act, on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Company. An act, or failure to act, based on specific authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of outside counsel for the Company shall be presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.
Appears in 3 contracts
Samples: Employment Agreement (Harbinger Group Inc.), Employment Agreement (Harbinger Group Inc.), Employment Agreement (Harbinger Group Inc.)
Termination of the Term. (a) Executive’s 's employment and this Agreement may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 30 days advance written notice of any resignation of Executive’s 's employment hereunder. Notwithstanding the foregoing, Executive’s 's employment shall automatically terminate upon Executive’s 's death.
(b) Following any termination of Executive’s employment's employment during the Term, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall cease, except as otherwise provided herein, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of any accrued but unpaid Base Salary and vacation time and for payment of any accrued obligations and unreimbursed expenses under Section 4(d) accrued or incurred through the date of termination of employment, (ii) for payment of the non-deferred cash portion of any Annual Bonus earned in respect of the fiscal year prior to the fiscal year in which termination of employment occurs but unpaid as of the date of termination of employment (paid when such non-deferred cash portion of the Annual Bonus would otherwise be payable), (iii) for the COBRA Payments (as defined below), (iv) as set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies policies, and (v) as otherwise expressly required by applicable statute. For the avoidance of doubt, the date of termination or termination date shall mean the last date of actual and active employment, whether such day is selected by mutual agreement with Executive or unilaterally by the Company and whether with or without advance notice. Notwithstanding the above, if the Executive’s 's employment is terminated for Cause or if he resigns his employment without Good Reason, the Executive shall not be entitled to receive any previously unpaid portion of the current or prior year’s 's Annual Bonus or COBRA Payments. If the Term of this Agreement is not extended (or further extended), but the Executive's employment with the Company continues after the expiration of such Term, then such continued employment shall be on an “at will” basis upon such terms as the Company may prescribe; and if such “at will” employment is terminated by the Company, the Executive's right to severance shall be determined and be payable in accordance with that Company's policy in effect at such time, if any.
(c) (i) If, prior to the expiration of the then current scheduled Initial Term or Renewal Term, Executive’s 's employment is terminated by the Company without Cause (and not other than due to death or Disability) or by Executive for Good Reason (defined below), then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(dSection 5(c)(ii)) to:
to (A) Severance severance pay equal to Executive’s 's then monthly Base Salary for a period equal to twelve (12) months, payable during the period immediately following such termination in substantially equal monthly installments consistent with the Company’s 's payroll practices;
, (B) Vesting vesting of the Initial Equity Grant as provided in Section 4(f);
, (C) Vesting on the date the Release Condition is satisfied payment of 10050% of the unpaid deferred cash portion portion, and vesting of 50% of the unvested equity portion, of Annual Bonuses awarded for fiscal years prior to the fiscal year in which termination occurs and payment thereof on their scheduled payment datesoccurs, i.e., no acceleration of payment except to the extent Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may require acceleration of up to such that 50% of amounts deferred before September 30, 2013), and vesting of 100% of the Executive's unvested equity portion of such Annual Bonuses, such that 100% of Executive’s unvested Options and Restricted Stock options shall vest and the restrictions on 10050% of Executive’s Restricted Stock ' s unvested options shall lapse, on the date such unvested Options and Restricted Stock would otherwise vest (and the restrictions on such Restricted Stock would 50% of Executive's restricted stock shall lapse) had Executive remained an employee , as of the Company on such datestermination date, provided that the Release Condition (defined below) is satisfied (and any unvested Options and Restricted Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be forfeited before satisfaction of the Release Condition but shall expire or be forfeited promptly if and when the Release Condition is not satisfied), and provided further that Executive will be responsible for satisfying any tax withholding obligations that may arise at the time they arise (which may include, for Restricted Stock, taxation when employment ends) but may elect to cause the Company to withhold or repurchase shares (to the statutory minimum tax withholding levels and subject to the Debt Limitations). With respect to any Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six (6) months after the date of the vesting of such Options within which to exercise such Options, but in no event shall such exercise period be longer than the 10th anniversary of the date of grant of such Option (or such earlier date as provided under Sections 12 or 13 of the 2011 Equity Plan or comparable provisions in a subsequent governing equity compensation plan). For the avoidance of doubt, any deferred cash shall remain subject to any reduction provisions applicable to members of senior management with respect to their deferred amounts from such prior years; provided that such deferral period shall not be longer than four fiscal years after the date such deferred cash was first granted;
(D) An eligibility for an Annual Bonus pursuant to Appendix A for the fiscal year in which such termination occurs, which, assuming performance is achieved, which shall be determined paid (for the cash portion of any bonus) or granted (for the equity portion of any bonus) on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion executives, except that (i) Executive shall only be entitled to 50% of any deferred cash component of the fiscal year for Annual Bonus, if any, which Executive was employed, with payment of each installment to be made in cash and/or vested shares of Company common stock in the same proportions as annual bonuses are paid for such year to other executives in the form of cash and equity awards. One-half of such amount shall be paid to Executive in as a lump sum payment made within seventy-four (74) days following of the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii5(c)(ii) providing for earlier payment); and
, (ii) only 50% of the equity grant (RSUs and options) otherwise calculated pursuant to Appendix A will be awarded, and (iii) such equity grant shall be granted, and will be vested, as of the date the Annual Bonus is awarded, and (E) If if Executive elects health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then the Company will reimburse Executive for the cost of COBRA premiums in excess of the cost of such benefits that active employees of the Company are required to pay for a period of twelve (12) months or until Executive obtains individual or family coverage through another employer, whichever comes first (the “COBRA Period”), subject to the conditions that: (I) Executive is responsible for immediately notifying the Company if Executive obtains alternative insurance coverage, (II) Executive will be responsible for the entire COBRA premium amount, if any, with respect to periods amount after the end of the COBRA Period; and (III) if Executive declines COBRA coverage or the Company is unable to make the payments consistent with applicable nondiscrimination rulescoverage, then the Company will not make any alternative payment to Executive in lieu of paying for COBRA premiums premiums, and (IV) such COBRA reimbursement payments shall be paid on an after tax basis as additional taxable compensation to the Executive (such COBRA reimbursement payments, the “COBRA Payments”). All of Executive's unvested restricted stock and options that do not vest pursuant to this Section 5(c)(i) shall be forfeited on the termination date.
(ii) Notwithstanding any provision of Section 4(f) or Section 5(c)(i), if, in the period that begins sixty (60) days prior to the occurrence of a Change in Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing of a definitive agreement to enter into a Change in Control that actually results in a Change in Control) and ends upon the first anniversary of such Change in Control, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason, then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to:
(A) Severance pay equal to two times the sum of (a) Executive’s then annual Base Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable Compensation (as defined in the Bonus Plan) in respect of the fiscal year in which the termination of employment occurs, the sum of which shall be paid in substantially equal monthly installments over a period of twenty four (24) months after such termination consistent with the Company’s payroll practices;
(B) Vesting of the Initial Equity Grant as provided in Section 4(f);
(C) Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for fiscal years prior to the year in which termination occurs, such that all unvested Options and Restricted Stock shall vest and the restrictions on all Restricted Stock shall lapse on the date the Release Condition is satisfied (and any such unvested Options and Restricted Stock that vest as a result of this Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the Release Condition (and any pre-closing period related to a Change in Control) but shall expire or be forfeited promptly if and when the Release Condition is not satisfied or the Change in Control does not occur);
(D) 100% of the unpaid deferred cash portion of Annual Bonuses awarded for fiscal years prior to the fiscal year in which the termination occurs shall be paid within seventy-four (74) days following the later of the Change in Control or the effective date of cessation of employment (except to the extent Section 409A requires payment on the original timing);
(E) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed. One-half of such amount shall be paid to Executive in a lump sum payment (in cash) within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment (in cash) in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment);
(F) Outplacement services in accordance with Company policies in effect as of Executive’s last day of employment, provided, however, if Executive declines such services, then the Company will not make any alternative payment to Executive in lieu of paying for such services; and
(G) COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18) months rather than twelve (12) months. Notwithstanding the foregoing, where required to avoid additional taxation under Section 409A, the Change in Control that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treas. Reg. § 1.409A-3(i)(5). In addition, any increase in compensation or benefits under this Section 5(c)(ii) in respect of a termination without Cause or resignation for Good Reason during the period in advance of a Change in Control provided above shall not occur unless and until the closing of the Change in Control.
(iiii) Any severance payments or benefits under Section 5(b)(iii) and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s Executive having provided an irrevocable waiver and general release of claims in favor of the Company and its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing (collectively, the “Released Parties”), in the Company’s 's customary form (subject to modification by the Company to comply with changes in applicable laws) that has become effective and irrevocable in accordance with its terms within fifty-fifty five (55) days after such termination of employment (the “Release Condition”) and (B) subject to Executive’s 's continued compliance with the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this Agreement. Payments and benefits of amounts which do not constitute nonqualified deferred compensation and are not subject to Section 409A (as defined below) shall commence five (5) days after the Release Condition is satisfied and payments and benefits which are subject to Section 409A shall commence on the sixtieth (60th) 60th day after termination of employment (subject to further delay, if required pursuant to Section 20(d) below) provided that the Release Condition is satisfied.
(ivii) For purposes of this Agreement, “Cause” means: (A) Executive’s 's willful misconduct in the performance of his duties for the Company which causes material injury to the Company, (B) Executive’s willfully engaging 's conviction of, or plea of guilty or nolo contendere to a felony (or the equivalent of a felony in illegal conduct which is injurious to a jurisdiction other than the CompanyUnited States), (C) Executive’s 's material breach of this Agreement, (D) Executive’s 's willful violation of the Company’s 's written policies in a manner that is detrimental to the best interests of the Company; , (E) Executive’s 's fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company; , (F) Executive’s 's act of personal dishonesty which results in personal profit in connection with Executive’s 's employment with the Company; , (G) Executive’s 's breach of fiduciary duty owed to the Company; Company or (H) Executive’s 's negligent actions which result in the loss of a material amount of capital of the Company or its Affiliates (the Company shall make the determination of materiality and shall promptly communicate such determination to Executive); provided, however, that Executive shall be provided a ten (10) day 10)-day period to cure any of the events or occurrences described in the immediately preceding clauses (C) or (D) hereof, to the extent curable. For purposes hereof, no act, or failure to act, on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s 's action or omission was in the best interests of the Company. An act, or failure to act, based on specific authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of outside counsel for the Company shall be presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.
Appears in 1 contract
Termination of the Term. (a) Executive’s employment may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 30 days advance written notice of any resignation of Executive’s employment hereunder. Notwithstanding the foregoing, Executive’s employment shall automatically terminate upon Executive’s death.
(b) Following any termination of Executive’s employment, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall cease, except as otherwise provided herein, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of any accrued but unpaid Base Salary and vacation time and for payment of any accrued obligations and unreimbursed expenses under Section 4(d) accrued or incurred through the date of termination of employment, (ii) for the non-deferred cash portion of any Annual Bonus earned in respect of the fiscal year prior to the fiscal year in which termination of employment occurs but unpaid as of the date of termination of employment (paid when such non-deferred cash portion of the Annual Bonus would otherwise be payable), (iii) for the COBRA Payments Benefits Continuation (as defined below), (iv) as set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies and (v) as otherwise expressly required by applicable statute. For the avoidance of doubt, the date of termination shall mean the last date of actual and active employment, whether such day is selected by mutual agreement with the Executive or unilaterally by the Company and whether with or without advance notice. Notwithstanding the above, if the Executive’s employment is terminated for Cause or if he resigns his employment without Good Reason, the Executive shall not be entitled to receive any previously unpaid portion of the current or prior year’s Annual Bonus or COBRA PaymentsBenefits Continuation. If the Term of this Agreement is not extended (or further extended), but the Executive’s employment with the Company continues after the expiration of such Term, then such continued employment shall be on an “at will” basis upon such terms as the Company may prescribe; and if such “at will” employment is terminated by the Company, the Executive’s right to severance shall be determined and be payable in accordance with that Company’s policy in effect at such time, if any.
(i) If, prior to the expiration of the then current Renewal scheduled Term, Executive’s employment is terminated by the Company without Cause (and not other than due to death or Disabilitydisability) or by Executive for Good Reason (defined below), then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(dSection 5(c)(ii)) to:
to (A) Severance severance pay equal to Executive’s then monthly Base Salary for a period equal to twelve (12) months, payable during the period immediately following such termination in substantially equal monthly installments consistent with the Company’s payroll practices;
, (B) Vesting vesting of the Initial Equity Grant as provided in Section 4(f4(t);
, (C) Vesting on the date the Release Condition is satisfied payment of 10050% of the unpaid deferred cash portion and vesting of 50% of the unvested equity portion, of Annual Bonuses awarded for fiscal years prior to the fiscal year in which termination occurs and payment thereof on their scheduled payment dates, i.e., no acceleration of payment except to the extent Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may require acceleration of up to 50% of amounts deferred before September 30, 2013), and vesting of 100% of the unvested equity portion of such Annual Bonuses, such that 100% of Executive’s unvested Options and Restricted Stock shall vest and the restrictions on 100% of Executive’s Restricted Stock shall lapse, on the date such unvested Options and Restricted Stock would otherwise vest (and the restrictions on such Restricted Stock would lapse) had Executive remained an employee of the Company on such dates, provided that the Release Condition (defined below) is satisfied (and any unvested Options and Restricted Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be forfeited before satisfaction of the Release Condition but shall expire or be forfeited promptly if and when the Release Condition is not satisfied), and provided further that Executive will be responsible for satisfying any tax withholding obligations that may arise at the time they arise (which may include, for Restricted Stock, taxation when employment ends) but may elect to cause the Company to withhold or repurchase shares (to the statutory minimum tax withholding levels and subject to the Debt Limitations). With respect to any Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six (6) months after the date of the vesting of such Options within which to exercise such Options, but in no event shall such exercise period be longer than the 10th anniversary of the date of grant of such Option (or such earlier date as provided under Sections 12 or 13 of the 2011 Equity Plan or comparable provisions in a subsequent governing equity compensation plan). For the avoidance of doubt, any deferred cash shall remain subject to any reduction provisions applicable to members of senior management with respect to their deferred amounts from such prior years; provided that such deferral period shall not be longer than four fiscal years after the date such deferred cash was first granted;
(D) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed, with payment of each installment to be made in cash and/or vested shares of Company common stock in the same proportions as annual bonuses are paid for such year to other executives in the form of cash and equity awards. One-half of such amount shall be paid to Executive in a lump sum payment within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment); and
(E) If Executive elects health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then the Company will reimburse Executive for the cost of COBRA premiums in excess of the cost of such benefits that active employees of the Company are required to pay for a period of twelve (12) months or until Executive obtains individual or family coverage through another employer, whichever comes first (the “COBRA Period”), subject to the conditions that: (I) Executive is responsible for immediately notifying the Company if Executive obtains alternative insurance coverage, (II) Executive will be responsible for the entire COBRA premium amount, if any, with respect to periods after the end of the COBRA Period; and (III) if Executive declines COBRA coverage or the Company is unable to make the payments consistent with applicable nondiscrimination rules, then the Company will not make any alternative payment to Executive in lieu of paying for COBRA premiums (such COBRA reimbursement payments, the “COBRA Payments”).
(ii) Notwithstanding any provision of Section 4(f) or Section 5(c)(i), if, in the period that begins sixty (60) days prior to the occurrence of a Change in Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing of a definitive agreement to enter into a Change in Control that actually results in a Change in Control) and ends upon the first anniversary of such Change in Control, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason, then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to:
(A) Severance pay equal to two times the sum of (a) Executive’s then annual Base Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable Compensation (as defined in the Bonus Plan) in respect of the fiscal year in which the termination of employment occurs, the sum of which shall be paid in substantially equal monthly installments over a period of twenty four (24) months after such termination consistent with the Company’s payroll practices;
(B) Vesting of the Initial Equity Grant as provided in Section 4(f);
(C) Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for fiscal years prior to the year in which termination occurs, such that all 50% of Executive’s unvested Options and Restricted Stock options shall vest and the restrictions on all Restricted Stock 50% of Executive’s restricted stock shall lapse on the date the Release Condition is satisfied (and any such unvested Options and Restricted Stock that vest lapse, as a result of this Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the Release Condition (and any pre-closing period related to a Change in Control) but shall expire or be forfeited promptly if and when the Release Condition is not satisfied or the Change in Control does not occur);
termination date, (D) 100% of the unpaid deferred cash portion of Annual Bonuses awarded eligibility for fiscal years prior to the fiscal year in which the termination occurs shall be paid within seventy-four (74) days following the later of the Change in Control or the effective date of cessation of employment (except to the extent Section 409A requires payment on the original timing);
(E) An an Annual Bonus pursuant to Appendix A for the fiscal year in which such termination occurs, which, assuming performance is achieved, which shall be determined paid (for the cash portion of any bonus) or granted (for the equity portion of any bonus) on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion executives, except that (i) Executive shall only be entitled to 50% of any deferred cash component of the fiscal year for Annual Bonus, if any, which Executive was employed. One-half of such amount shall be paid to Executive in as a lump sum payment (in cash) within seventy-four (74) 74 days following of the end of the fiscal year for which it is awarded awarded, (ii) only 50% of the equity grant (RSUs and the other one-half options) otherwise calculated pursuant to Appendix A will be awarded, and (iii) such equity grant shall be paid to Executive in a lump sum payment (in cash) in the calendar year in which the one-year anniversary granted, and will be vested, as of the first payment occurs but in no event later than such one-year anniversary date the Annual Bonus is awarded, and (in each case, notwithstanding any provision of Section 5(c)(iiiE) providing continuation for earlier payment);
(F) Outplacement services in accordance with Company policies in effect as of Executive’s last day of employment, provided, however, if Executive declines such services, then the Company will not make any alternative payment to Executive in lieu of paying for such services; and
(G) COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18) months rather than twelve (12) months. Notwithstanding months of the foregoingmedical and dental benefits under the terms of the applicable Company benefit plans in which Executive was participating immediately prior to termination of employment, where subject to the Company’s continuation of such benefit plans for its employees and to Executive’s payment of the cost of such benefits to the same extent that active employees of the Company are required to avoid additional taxation under Section 409Apay for such benefits from time to time (collectively, the Change in Control that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treas. Reg. § 1.409A-3(i)(5Benefits Continuation”). In addition, any increase in compensation or benefits under All of Executive’s unvested restricted stock and options that do not vest pursuant to this Section 5(c)(ii5(c)(i) in respect of a shall be forfeited on the termination without Cause or resignation for Good Reason during the period in advance of a Change in Control provided above shall not occur unless and until the closing of the Change in Controldate.
(iiiii) Any severance payments or benefits under Section 5(b)(iii) and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s Executive having provided an irrevocable waiver and general release of claims in favor of the Company and its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing (collectively, the “Released Parties”), in the Company’s customary a form (subject to modification provided by the Company (which will be similar in form to comply with changes the general release contained in applicable lawsthe December 2011 Severance Agreement between Executive and Harbinger Capital Partners, LLC) that has become effective and irrevocable in accordance with its terms within fifty-fifty five (55) days after such termination of employment (the “Release Condition”) and (B) subject to Executive’s continued compliance with the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this Agreement. Payments and benefits of amounts which do not constitute nonqualified deferred compensation and are not subject to Section 409A (as defined below) shall commence five (5) days after the Release Condition is satisfied and payments and benefits which are subject to Section 409A shall commence on the sixtieth (60th) 60th day after termination of employment (subject to further delay, if required pursuant to Section 20(d) below) provided that the Release Condition is satisfied.
(iviii) For purposes of this Agreement, “Cause” means: (A) Executive’s willful misconduct in the performance of his duties for the Company which causes material injury to the Company, (B) Executive’s willfully engaging conviction of, or plea of guilty or nolo contendere to a felony (or the equivalent of a felony in illegal conduct which is injurious to a jurisdiction other than the CompanyUnited States), (C) Executive’s material breach of this Agreement, (D) Executive’s willful violation of the Company’s written policies in a manner that is detrimental to the best interests of the Company; , (E) Executive’s fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company; , (F) Executive’s act of personal dishonesty which results in personal profit in connection with Executive’s employment with the Company; , (G) Executive’s breach of fiduciary duty owed to the Company; , or (H) Executive’s negligent actions which result in the loss of a material amount of capital of the Company or its Affiliates (the Company shall make the determination of materiality and shall promptly communicate such determination to the Executive); provided, however, that Executive shall be provided a ten (10) day 10)-day period to cure any of the events or occurrences described in the immediately preceding clauses (C) or (D) hereof, to the extent curable. For purposes hereof, no act, or failure to act, on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. An act, or failure to act, based on specific authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of outside counsel for the Company shall be presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.
Appears in 1 contract
Termination of the Term. (a) Executive’s employment may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 30 days advance written notice of any resignation of Executive’s employment hereunder. Notwithstanding the foregoing, Executive’s employment shall automatically terminate upon Executive’s death.
(b) Following any termination of Executive’s employmentemployment during the Term, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall cease, except as otherwise provided herein, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of any accrued but unpaid Base Salary and vacation time and for payment of any accrued obligations and unreimbursed expenses under Section 4(d) accrued or incurred through the date of termination of employment, (ii) for payment of the non-deferred cash portion of any Annual Bonus earned in respect of the fiscal year prior to the fiscal year in which termination of employment occurs but unpaid as of the date of termination of employment (paid when such non-deferred cash portion of the Annual Bonus would otherwise be payable), (iii) for the COBRA Payments Benefits Continuation (as defined below), (iv) as set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies policies, and (v) as otherwise expressly required by applicable statute. For the avoidance of doubt, the date of termination or termination date shall mean the last date of actual and active employment, whether such day is selected by mutual agreement with Executive or unilaterally by the Company and whether with or without advance notice. Notwithstanding the above, if the Executive’s employment is terminated for Cause or if he resigns his employment without Good Reason, the Executive shall not be entitled to receive any previously unpaid portion of the current or prior year’s Annual Bonus or COBRA PaymentsBenefits Continuation. If the Term of this Agreement is not extended (or further extended), but the Executive’s employment with the Company continues after the expiration of such Term, then such continued employment shall be on an “at will” basis upon such terms as the Company may prescribe; and if such “at will” employment is terminated by the Company, the Executive’s right to severance shall be determined and be payable in accordance with that Company’s policy in effect at such time, if any.
(i) If, prior to the expiration of the then current Renewal scheduled Term, Executive’s employment is terminated by the Company without Cause (and not other than due to death or Disability) or by Executive for Good Reason (defined below), then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(dSection 5(c)(ii)) to:
to (A) Severance severance pay equal to Executive’s then monthly Base Salary for a period equal to twelve (12) months, payable during the period immediately following such termination in substantially equal monthly installments consistent with the Company’s payroll practices;
, (B) Vesting vesting of the Initial Equity Grant as provided in Section 4(f);
, (C) Vesting on the date the Release Condition is satisfied payment of 10050% of the unpaid deferred cash portion portion, and vesting of 50% of the unvested equity portion, of Annual Bonuses awarded for fiscal years prior to the fiscal year in which termination occurs and payment thereof on their scheduled payment dates, i.e., no acceleration of payment except to the extent Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may require acceleration of up to 50% of amounts deferred before September 30, 2013), and vesting of 100% of the unvested equity portion of such Annual Bonusesoccurs, such that 10050% of Executive’s unvested Options and Restricted Stock options shall vest and the restrictions on 10050% of Executive’s Restricted Stock restricted stock shall lapse, on the date such unvested Options and Restricted Stock would otherwise vest (and the restrictions on such Restricted Stock would lapse) had Executive remained an employee as of the Company on such datestermination date, provided that the Release Condition (defined below) is satisfied (and any unvested Options and Restricted Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be forfeited before satisfaction of the Release Condition but shall expire or be forfeited promptly if and when the Release Condition is not satisfied), and provided further that Executive will be responsible for satisfying any tax withholding obligations that may arise at the time they arise (which may include, for Restricted Stock, taxation when employment ends) but may elect to cause the Company to withhold or repurchase shares (to the statutory minimum tax withholding levels and subject to the Debt Limitations). With respect to any Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six (6) months after the date of the vesting of such Options within which to exercise such Options, but in no event shall such exercise period be longer than the 10th anniversary of the date of grant of such Option (or such earlier date as provided under Sections 12 or 13 of the 2011 Equity Plan or comparable provisions in a subsequent governing equity compensation plan). For the avoidance of doubt, any deferred cash shall remain subject to any reduction provisions applicable to members of senior management with respect to their deferred amounts from such prior years; provided that such deferral period shall not be longer than four fiscal years after the date such deferred cash was first granted;
(D) An eligibility for an Annual Bonus pursuant to Appendix A for the fiscal year in which such termination occurs, which, assuming performance is achieved, which shall be determined paid (for the cash portion of any bonus) or granted (for the equity portion of any bonus) on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion executives, except that (i) Executive shall only be entitled to 50% of any deferred cash component of the fiscal year for Annual Bonus, if any, which Executive was employed, with payment of each installment to be made in cash and/or vested shares of Company common stock in the same proportions as annual bonuses are paid for such year to other executives in the form of cash and equity awards. One-half of such amount shall be paid to Executive in as a lump sum payment within seventy-four (74) 74 days following of the end of the fiscal year for which it is awarded awarded, (ii) only 50% of the equity grant (restricted stock and the other one-half options) otherwise calculated pursuant to Appendix A will be awarded, and (iii) such equity grant shall be paid to Executive in a lump sum payment in the calendar year in which the one-year anniversary granted, and will be vested, as of the first payment occurs but in no event later than such one-year anniversary (in each casedate the Annual Bonus is awarded, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment); and
and (E) If Executive elects health insurance continuation coverage for twelve (12) months of the medical and dental benefits under the Consolidated Omnibus Budget Reconciliation Act terms of 1985the applicable Company benefit plans in which Executive was participating immediately prior to termination of employment, as amended (“COBRA”), then subject to the Company will reimburse Executive Company’s continuation of such benefit plans for the cost of COBRA premiums in excess its employees and to Executive’s payment of the cost of such benefits to the same extent that active employees of the Company are required to pay for a period of twelve (12) months or until Executive obtains individual or family coverage through another employer, whichever comes first (the “COBRA Period”), subject such benefits from time to the conditions that: (I) Executive is responsible for immediately notifying the Company if Executive obtains alternative insurance coverage, (II) Executive will be responsible for the entire COBRA premium amount, if any, with respect to periods after the end of the COBRA Period; and (III) if Executive declines COBRA coverage or the Company is unable to make the payments consistent with applicable nondiscrimination rules, then the Company will not make any alternative payment to Executive in lieu of paying for COBRA premiums time (such COBRA reimbursement paymentsbenefits continuation collectively, the “COBRA PaymentsBenefits Continuation”). All of Executive’s unvested restricted stock and options that do not vest pursuant to this Section 5(c)(i) shall be forfeited on the termination date.
(ii) Notwithstanding any provision of Section 4(f) or Section 5(c)(i), if, in the period that begins sixty (60) days prior to the occurrence of a Change in Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing of a definitive agreement to enter into a Change in Control that actually results in a Change in Control) and ends upon the first anniversary of such Change in Control, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason, then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to:
(A) Severance pay equal to two times the sum of (a) Executive’s then annual Base Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable Compensation (as defined in the Bonus Plan) in respect of the fiscal year in which the termination of employment occurs, the sum of which shall be paid in substantially equal monthly installments over a period of twenty four (24) months after such termination consistent with the Company’s payroll practices;
(B) Vesting of the Initial Equity Grant as provided in Section 4(f);
(C) Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for fiscal years prior to the year in which termination occurs, such that all unvested Options and Restricted Stock shall vest and the restrictions on all Restricted Stock shall lapse on the date the Release Condition is satisfied (and any such unvested Options and Restricted Stock that vest as a result of this Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the Release Condition (and any pre-closing period related to a Change in Control) but shall expire or be forfeited promptly if and when the Release Condition is not satisfied or the Change in Control does not occur);
(D) 100% of the unpaid deferred cash portion of Annual Bonuses awarded for fiscal years prior to the fiscal year in which the termination occurs shall be paid within seventy-four (74) days following the later of the Change in Control or the effective date of cessation of employment (except to the extent Section 409A requires payment on the original timing);
(E) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed. One-half of such amount shall be paid to Executive in a lump sum payment (in cash) within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment (in cash) in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment);
(F) Outplacement services in accordance with Company policies in effect as of Executive’s last day of employment, provided, however, if Executive declines such services, then the Company will not make any alternative payment to Executive in lieu of paying for such services; and
(G) COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18) months rather than twelve (12) months. Notwithstanding the foregoing, where required to avoid additional taxation under Section 409A, the Change in Control that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treas. Reg. § 1.409A-3(i)(5). In addition, any increase in compensation or benefits under this Section 5(c)(ii) in respect of a termination without Cause or resignation for Good Reason during the period in advance of a Change in Control provided above shall not occur unless and until the closing of the Change in Control.
(iii) Any severance payments or benefits under Section 5(b)(iii) and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s Executive having provided an irrevocable waiver and general release of claims in favor of the Company and its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing (collectively, the “Released Parties”), in the Company’s customary form (subject to modification by the Company to comply with changes in applicable laws) that has become effective and irrevocable in accordance with its terms within fifty-fifty five (55) days after such termination of employment (the “Release Condition”) and (B) subject to Executive’s continued compliance with the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this Agreement. Payments and benefits of amounts which do not constitute nonqualified deferred compensation and are not subject to Section 409A (as defined below) shall commence five (5) days after the Release Condition is satisfied and payments and benefits which are subject to Section 409A shall commence on the sixtieth (60th) 60th day after termination of employment (subject to further delay, if required pursuant to Section 20(d) below) provided that the Release Condition is satisfied.
(iviii) For purposes of this Agreement, “Cause” means: (A) Executive’s willful misconduct in the performance of his duties for the Company which causes material injury to the Company, (B) Executive’s willfully engaging conviction of, or plea of guilty or nolo contendere to a felony (or the equivalent of a felony in illegal conduct which is injurious to a jurisdiction other than the CompanyUnited States), (C) Executive’s material breach of this Agreement, (D) Executive’s willful violation of the Company’s written policies in a manner that is detrimental to the best interests of the Company; , (E) Executive’s fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company; , (F) Executive’s act of personal dishonesty which results in personal profit in connection with Executive’s employment with the Company; , (G) Executive’s breach of fiduciary duty owed to the Company; Company or (H) Executive’s negligent actions which result in the loss of a material amount of capital of the Company or its Affiliates (the Company shall make the determination of materiality and shall promptly communicate such determination to Executive); provided, however, that Executive shall be provided a ten (10) day 10)-day period to cure any of the events or occurrences described in the immediately preceding clauses (C) or (D) hereof, to the extent curable. For purposes hereof, no act, or failure to act, on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Company. An act, or failure to act, based on specific authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of outside counsel for the Company shall be presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.
Appears in 1 contract
Termination of the Term. (a) Executive’s employment may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 30 days advance written notice of any resignation of Executive’s employment hereunder. Notwithstanding the foregoing, Executive’s employment shall automatically terminate upon Executive’s death.
(b) Following any termination of Executive’s employment, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall cease, except as otherwise provided herein, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of any accrued but unpaid Base Salary and vacation time and for payment of any accrued obligations and unreimbursed expenses under Section 4(d) accrued or incurred through the date of termination of employment, (ii) for the non-deferred cash portion of any Annual Bonus earned in respect of the fiscal year prior to the fiscal year in which termination of employment occurs but unpaid as of the date of termination of employment (paid when such non-deferred cash portion of the Annual Bonus would otherwise be payable), (iii) for the COBRA Payments Benefits Continuation (as defined below), (iv) as set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies and (v) as otherwise expressly required by applicable statute. For the avoidance of doubt, the date of termination shall mean the last date of actual and active employment, whether such day is selected by mutual agreement with the Executive or unilaterally by the Company and whether with or without advance notice. Notwithstanding the above, if the Executive’s employment is terminated for Cause or if he resigns his employment without Good Reason, the Executive shall not be entitled to receive any previously unpaid portion of the current or prior year’s Annual Bonus or COBRA PaymentsBenefits Continuation. If the Term of this Agreement is not extended (or further extended), but the Executive’s employment with the Company continues after the expiration of such Term, then such continued employment shall be on an “at will” basis upon such terms as the Company may prescribe; and if such “at will” employment is terminated by the Company, the Executive’s right to severance shall be determined and be payable in accordance with that Company’s policy in effect at such time, if any.
(i) If, prior to the expiration of the then current Renewal scheduled Term, Executive’s employment is terminated by the Company without Cause (and not other than due to death or Disability) or by Executive for Good Reason (defined below), then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(dSection 5(c)(ii)) to:
to (A) Severance severance pay equal to Executive’s then monthly Base Salary for a period equal to twelve (12) months, payable during the period immediately following such termination in substantially equal monthly installments consistent with the Company’s payroll practices;
, (B) Vesting vesting of the Initial Equity Grant as provided in Section 4(f4(t);
, (C) Vesting on the date the Release Condition is satisfied payment of 10050% of the unpaid deferred cash portion portion, and vesting of 50% of the unvested equity portion, of Annual Bonuses awarded for fiscal years prior to the fiscal year in which termination occurs and payment thereof on their scheduled payment dates, i.e., no acceleration of payment except to the extent Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) may require acceleration of up to 50% of amounts deferred before September 30, 2013), and vesting of 100% of the unvested equity portion of such Annual Bonuses, such that 100% of Executive’s unvested Options and Restricted Stock shall vest and the restrictions on 100% of Executive’s Restricted Stock shall lapse, on the date such unvested Options and Restricted Stock would otherwise vest (and the restrictions on such Restricted Stock would lapse) had Executive remained an employee of the Company on such dates, provided that the Release Condition (defined below) is satisfied (and any unvested Options and Restricted Stock vested pursuant to this Section 5(c)(i)(C) shall not expire or be forfeited before satisfaction of the Release Condition but shall expire or be forfeited promptly if and when the Release Condition is not satisfied), and provided further that Executive will be responsible for satisfying any tax withholding obligations that may arise at the time they arise (which may include, for Restricted Stock, taxation when employment ends) but may elect to cause the Company to withhold or repurchase shares (to the statutory minimum tax withholding levels and subject to the Debt Limitations). With respect to any Options that vest pursuant to this Section 5(c)(i)(C) Executive shall have six (6) months after the date of the vesting of such Options within which to exercise such Options, but in no event shall such exercise period be longer than the 10th anniversary of the date of grant of such Option (or such earlier date as provided under Sections 12 or 13 of the 2011 Equity Plan or comparable provisions in a subsequent governing equity compensation plan). For the avoidance of doubt, any deferred cash shall remain subject to any reduction provisions applicable to members of senior management with respect to their deferred amounts from such prior years; provided that such deferral period shall not be longer than four fiscal years after the date such deferred cash was first granted;
(D) An Annual Bonus for the fiscal year in which such termination occurs, which, assuming performance is achieved, shall be determined on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion of the fiscal year for which Executive was employed, with payment of each installment to be made in cash and/or vested shares of Company common stock in the same proportions as annual bonuses are paid for such year to other executives in the form of cash and equity awards. One-half of such amount shall be paid to Executive in a lump sum payment within seventy-four (74) days following the end of the fiscal year for which it is awarded and the other one-half shall be paid to Executive in a lump sum payment in the calendar year in which the one-year anniversary of the first payment occurs but in no event later than such one-year anniversary (in each case, notwithstanding any provision of Section 5(c)(iii) providing for earlier payment); and
(E) If Executive elects health insurance continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then the Company will reimburse Executive for the cost of COBRA premiums in excess of the cost of such benefits that active employees of the Company are required to pay for a period of twelve (12) months or until Executive obtains individual or family coverage through another employer, whichever comes first (the “COBRA Period”), subject to the conditions that: (I) Executive is responsible for immediately notifying the Company if Executive obtains alternative insurance coverage, (II) Executive will be responsible for the entire COBRA premium amount, if any, with respect to periods after the end of the COBRA Period; and (III) if Executive declines COBRA coverage or the Company is unable to make the payments consistent with applicable nondiscrimination rules, then the Company will not make any alternative payment to Executive in lieu of paying for COBRA premiums (such COBRA reimbursement payments, the “COBRA Payments”).
(ii) Notwithstanding any provision of Section 4(f) or Section 5(c)(i), if, in the period that begins sixty (60) days prior to the occurrence of a Change in Control (as defined in the 2011 Equity Plan) (or, if earlier, upon the signing of a definitive agreement to enter into a Change in Control that actually results in a Change in Control) and ends upon the first anniversary of such Change in Control, Executive’s employment is terminated by the Company without Cause (and not due to death or Disability) or by Executive for Good Reason, then Executive shall be entitled (subject to the times payments will be made and other conditions set forth in Sections 5(c)(iii) and 20(d), and in lieu of the entitlements set forth in Section 5(c)(i)(A), (B), (C) and (D)) to:
(A) Severance pay equal to two times the sum of (a) Executive’s then annual Base Salary plus (b) the greater of $2,500,000 and Executive’s Target Variable Compensation (as defined in the Bonus Plan) in respect of the fiscal year in which the termination of employment occurs, the sum of which shall be paid in substantially equal monthly installments over a period of twenty four (24) months after such termination consistent with the Company’s payroll practices;
(B) Vesting of the Initial Equity Grant as provided in Section 4(f);
(C) Vesting of 100% of any unvested equity portion of any Annual Bonuses awarded for fiscal years prior to the year in which termination occurs, such that all 50% of Executive’s unvested Options and Restricted Stock options shall vest and the restrictions on all Restricted Stock 50% of Executive’s restricted stock shall lapse on the date the Release Condition is satisfied (and any such unvested Options and Restricted Stock that vest lapse, as a result of this Section 5(c)(ii)(C) shall not expire or be forfeited before satisfaction of the Release Condition (and any pre-closing period related to a Change in Control) but shall expire or be forfeited promptly if and when the Release Condition is not satisfied or the Change in Control does not occur);
termination date, (D) 100% of the unpaid deferred cash portion of Annual Bonuses awarded eligibility for fiscal years prior to the fiscal year in which the termination occurs shall be paid within seventy-four (74) days following the later of the Change in Control or the effective date of cessation of employment (except to the extent Section 409A requires payment on the original timing);
(E) An an Annual Bonus pursuant to Appendix A for the fiscal year in which such termination occurs, which, assuming performance is achieved, which shall be determined paid (for the cash portion of any bonus) or granted (for the equity portion of any bonus) on the same terms and at the same time as annual bonuses are determined for other executives and prorated for the portion executives, except that (i) Executive shall only be entitled to 50% of any deferred cash component of the fiscal year for Annual Bonus, if any, which Executive was employed. One-half of such amount shall be paid to Executive in as a lump sum payment (in cash) made within seventy-four (74) days following of the end of the fiscal year for which it is awarded awarded, (ii) only 50% of the equity grant (RSUs and the other one-half options) otherwise calculated pursuant to Appendix A will be awarded, and (iii) such equity grant shall be paid to Executive in a lump sum payment (in cash) in the calendar year in which the one-year anniversary granted, and will be vested, as of the first payment occurs but in no event later than such one-year anniversary date the Annual Bonus is awarded, and (in each case, notwithstanding any provision of Section 5(c)(iiiE) providing continuation for earlier payment);
(F) Outplacement services in accordance with Company policies in effect as of Executive’s last day of employment, provided, however, if Executive declines such services, then the Company will not make any alternative payment to Executive in lieu of paying for such services; and
(G) COBRA Payments as described in Section 5(c)(i)(E) for a maximum of eighteen (18) months rather than twelve (12) months. Notwithstanding months of the foregoingmedical and dental benefits under the terms of the applicable Company benefit plans in which Executive was participating immediately prior to termination of employment, where subject to the Company’s continuation of such benefit plans for its employees and to Executive’s payment of the cost of such benefits to the same extent that active employees of the Company are required to avoid additional taxation under Section 409Apay for such benefits from time to time (collectively, the Change in Control that occurs must also be a “change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation” as defined in Treas. Reg. § 1.409A-3(i)(5Benefits Continuation”). In addition, any increase in compensation or benefits under All of Executive’s unvested restricted stock and options that do not vest pursuant to this Section 5(c)(ii5(c)(i) in respect of a shall be forfeited on the termination without Cause or resignation for Good Reason during the period in advance of a Change in Control provided above shall not occur unless and until the closing of the Change in Controldate.
(iiiii) Any severance payments or benefits under Section 5(b)(iii) and 5(c)(i) or (c)(ii) shall be (A) conditioned upon Executive’s Executive having provided an irrevocable waiver and general release of claims in favor of the Company and its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing (collectively, the “Released Parties”), in the Company’s customary a form (subject to modification provided by the Company (which will be similar in form to comply with changes the general release contained in applicable lawsthe December 2011 Severance Agreement between Executive and Harbinger Capital Partners, LLC) that has become effective and irrevocable in accordance with its terms within fifty-five (55) days after such termination of employment (the “Release Condition”) and (B) subject to Executive’s continued compliance with the terms of the restrictive covenants in Sections 7, 8, 9, 10 and 11 of this Agreement. Payments and benefits which do not constitute nonqualified deferred compensation and are not subject to Section 409A (as defined below) shall commence five (5) days after the Release Condition is satisfied and payments and benefits which are subject to Section 409A shall commence on the sixtieth (60th) day after termination of employment (subject to further delay, if required pursuant to Section 20(d) below) provided that the Release Condition is satisfied.
(iviii) For purposes of this Agreement, “Cause” means: (A) Executive’s willful misconduct in the performance of his duties for the Company which causes material injury to the Company, (B) Executive’s willfully engaging in illegal conduct which is injurious to the Company, (C) Executive’s material breach of this Agreement, (D) Executive’s willful violation of the Company’s written policies in a manner that is detrimental to the best interests of the Company; (E) Executive’s fraud or misappropriation, embezzlement or misuse of funds or property belonging to the Company; (F) Executive’s act of personal dishonesty which results in personal profit in connection with Executive’s employment with the Company; (G) Executive’s breach of fiduciary duty owed to the Company; or (H) Executive’s negligent actions which result in the loss of a material amount of capital of the Company or its Affiliates (the Company shall make the determination of materiality and shall promptly communicate such determination to the Executive); provided, however, that Executive shall be provided a ten (10) day 10)-day period to cure any of the events or occurrences described in the immediately preceding clauses (C) or (D) hereof, to the extent curable. For purposes hereof, no act, or failure to act, on the part of Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. An act, or failure to act, based on specific authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of outside counsel for the Company shall be presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.
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