Termination Without Cause or for Constructive Termination Clause Samples
The 'Termination Without Cause or for Constructive Termination' clause allows either party to end the agreement without needing to prove fault or breach by the other party, or in situations where continued employment becomes untenable due to significant changes imposed by the employer. Typically, this clause outlines the notice period required or any severance obligations if the contract is ended without cause, and defines what constitutes constructive termination, such as a substantial reduction in pay or responsibilities. Its core function is to provide flexibility for both parties to exit the agreement under fair conditions, while protecting employees from being forced to accept unfavorable changes without recourse.
Termination Without Cause or for Constructive Termination. If Executive suffers a CIC Termination, then, subject to Section 4.2, Executive shall be entitled, if such CIC Termination occurred within three (3) years of a Change in Control, to the following benefits:
(a) The Company shall pay to Executive as severance pay in one lump sum an amount equal to the product of (i) Executive’s Total Compensation (as defined below) multiplied by (ii) the number two and one-half (2.5). Such severance pay shall be paid not later than the tenth (10th) business day following the Date of Termination, unless Executive is a “specified employee,” as defined in §1.409A-1(i) of the Final Treasury Regulations under Code Section 409A, or any successor provision thereto, in which case, such severance pay shall be paid on the date which is six (6) months following the Participant’s Date of Termination (or, if earlier, the date of death of the Participant), provided the six months delay requirements of Code Section 409A otherwise apply to the payments hereunder. All severance pay that is delayed as provided in this paragraph (a) shall accrue interest for the period from the tenth (10th) business day following the Date of Termination until the date such payment is actually made. Said interest shall be equal to the applicable interest rate as defined in Code Section 417(e)(3), without regard to the phase-in percentages specified in Code Section 417(e)(3)(D)(iii), for the November preceding the first day of the calendar year in which the participant retires or otherwise becomes entitled to payments without regard to this Section 5.4(c).
Termination Without Cause or for Constructive Termination. If Executive suffers a CIC Termination, then, subject to Section 4.2, Executive shall be entitled, if such CIC Termination occurred within three (3) years of a Change in Control, to the following benefits:
(a) The Company shall pay to Executive as severance pay in one lump sum not later than the tenth (10th) day following the Date of Termination, an amount equal to the product of (i) the Executive's Total Compensation (as defined below) multiplied by (ii) the number one and one-half (1.5).
Termination Without Cause or for Constructive Termination. If Executive suffers a CIC Termination, then, subject to Section 4.2, Executive shall be entitled, if such CIC Termination occurred within three (3) years of a Change in Control, to the following benefits:
(i) The Company shall pay to Executive as severance pay in one lump sum an amount equal to (1) the product of (a) Executive’s Total Compensation (as defined below) multiplied by (b) the number two and one-half (2.5) and (2) the total of (a) an amount that is actuarially equivalent to an additional three (3) years of annual age and service credits payable to Executive under the Company’s Pension Account Plan and (b) an amount that is actuarially equivalent to an additional three (3) years of Company matching contributions payable to Executive under the Company’s Retirement Savings Plan and Trust. Such severance pay shall be paid not later than the tenth (10th) business day following the Date of Termination, unless Executive is a “specified employee,” as defined in §1.409A-1(i) of the Final Treasury Regulations under Code Section 409A, or any successor provision thereto, in which case, such severance pay shall be paid on the date which is six (6) months following the Participant’s Date of Termination (or, if earlier, the date of death of the Participant), provided the six months delay requirements of Code Section 409A otherwise apply to the payments hereunder.
(ii) All severance pay that is delayed as provided in this paragraph (a) shall accrue interest for the period from the tenth (10th) business day following the Date of Termination until the date such payment is actually made. Said interest shall be equal to the applicable interest rate as defined in Code Section 417(e)(3), without regard to the phase-in percentages specified in Code Section 417(e)(3)(D)(iii), for the November preceding the first day of the calendar year in which the participant retires or otherwise becomes entitled to payments without regard to this Section 4.1(a)
(iii) For purposes of this Section 4.1(a), Executive’s “Total Compensation” shall mean the annual base salary being paid to Executive at the Date of Termination plus Executive’s “Average Bonus.” Executive’s “Average Bonus” shall mean the greater of (i) the bonus or incentive award pursuant to any annual performance bonus or incentive compensation plan of the Company (the “Bonus”) last paid to or earned by Executive immediately prior to his Date of Termination, or (ii) the average of the highest three Bonuses or incentive awa...