Retention Bonus (a) Subject to Sections 2(b), 2(c) and 2(d) below and your continued employment through the Determination Date (as defined below), you will be eligible to receive a Retention Bonus equal to the annual bonus you would have been eligible to receive under the Company’s Annual Incentive Plan based on the Company’s actual performance for 2023, as determined by the Compensation Committee of the Board of Directors (the “Committee”) following the completion of 2023, had you been a participant in the Annual Incentive Plan with a target bonus opportunity of up to 40% of your base salary (such amount as determined by the Committee, the “Retention Bonus”), which determination shall occur between January 1, 2024 and March 15, 2024 (the date of such determination, the “Determination Date”). The Retention Bonus, if any, will be paid in cash in a lump sum between January 1, 2025 and March 15, 2025. You will continue to be considered an employee of the Company for purposes of this letter agreement if you are on a Company- approved leave of absence.
(b) In the event of a Change in Control during 2024, subject to your continued employment through the earlier of: (1) the Determination Date; or (2) the date of the Change in Control, you will be eligible to receive your Retention Bonus in cash in a lump sum within 10 days following the date of the Change in Control.
(c) In the event of your Involuntary Termination (as defined in the Employment Agreement) on or after the Determination Date but on or prior to the date you have received the Retention Bonus, you will be eligible to receive your Retention Bonus in cash in a lump sum within 10 days following the effective date of your Release (as defined below). As a condition to your receipt of the Retention Bonus pursuant to this Section 2(c), you shall execute and not revoke a general release of all claims in favor of the Company and its affiliates (the “Release”) in the form attached to the Employment Agreement as Exhibit A. In the event the Release does not become effective within the 55-day period following the date of your Involuntary Termination, you shall not be entitled to the Retention Bonus.
(d) If your employment terminates prior to the Determination Date for any reason, then this letter agreement will terminate, and you will forfeit any right you may have to receive the Retention Bonus.
Retention Bonuses Provided Executive becomes and remains an active employee of Mercantile, Mercantile will pay Executive retention bonuses in accordance with the following schedule:
(i) $42,750.00 [25% of salary and target incentive compensation], to be paid on the first payroll period following the Effective Time,
(ii) $42,750.00 [25% of salary and target incentive compensation], to be paid on the first payroll period following six (6) months of Executive’s employment with Mercantile,
(iii) $42,750.00 [25% of salary and target incentive compensation], to be paid on the first payroll period following twelve (12) months of Executive’s employment with Mercantile. After twelve (12) months of Executive’s employment with Mercantile, Executive will not be entitled to any further Severance or Retention benefits. The above-listed payments and benefits are in lieu of any and all payments and benefits to which Executive may otherwise have been entitled under the CIC Agreement or any other agreement or practice.
Termination and Severance Pay A. In the event Employee is terminated by the Board before the expiration of the term of this agreement without just cause, and during that time Employee is willing and able to perform his duties under this Agreement, the Board shall continue to pay Employee's salary for a period of four (4) months after the date of termination (the "Severance Period") and shall continue Employee's then current health insurance coverage for a period of four (4) months. In the event Employer is not able to maintain Employee's health insurance coverage pursuant to the terms of the Township health insurance plan, then Employer shall pay to Employee, for a period of four (4) months, the cost of health insurance premiums at a rate that will continue substantially similar health benefits for Employee and Employee's family, if applicable, as provided under the then current township health insurance plan. In addition, the Board shall pay the cash value of any accrued vacation time. All of the above shall hereinafter be referred to as the Severance Compensation. The parties agree that this Severance Compensation shall constitute Employee's sole and exclusive remedy for termination without just cause
B. In the event Employee is terminated by the Board before the expiration of the term of this agreement with just cause, the Board shall have no obligation to pay the Severance Compensation set forth in Section 3A.
C. In the event the Board, at any time during the term of this Agreement, reduces the salary or other financial benefits of Employee in a greater percentage than an applicable across- the-board reduction for all employees of the Board, or in the event the Board refuses, following written notice, to comply with any other provision benefiting Employee herein, or Employee resigns following a written request by the Board that he resign, then, in that event, Employee may, at his option, be deemed to be "terminated without just cause" as of the date of such reduction, refusal to comply, or written request and Employee shall be entitled to the Severance Compensation as set forth in Section 3A. as if he were terminated without cause. For the purposes of this paragraph, the Board's failure to grant Employee a raise equivalent to that given any or all other Township Employees shall not be deemed a "reduction" as provided herein.
D. In the event Employee desires to voluntarily resign his position with the Board before the expiration of the above term of this employment, then Employee shall give the Board thirty (30) days notice in advance, unless the parties agree otherwise in writing. In the event the Employee voluntarily resigns his position, he shall not be entitled to the severance pay provisions contained in Section 3A hereof.
E. For the purposes of Section 3. hereof, "just cause" shall mean the following:
(a) The Employee is convicted of a felony;
(b) The Employee has failed or neglected to carry out his duties hereunder in any material and significant respect, or has been guilty of misfeasance, malfeasance, or nonfeasance in office for a period of thirty (30) days after written notice to him from the Board specifying the nature of such failure, neglect, misfeasance, malfeasance, or nonfeasance in office, unless such misfeasance, malfeasance, or nonfeasance is so egregious or of such a nature that it is of a criminal nature or it cannot be corrected.
F. If the Employee is permanently disabled or is otherwise unable to perform his duties because of sickness, accident, injury, mental incapacity or health for a period of eight successive weeks beyond any accrued sick leave and vacation time, the Board shall have the option to terminate this Agreement, and Employee shall receive the Severance Compensation set forth under Paragraph 3A. above.
Retention Payment Subject to your compliance with Sections 6 and 7 of this letter agreement, if you remain an active full-time employee of the Company, Parent or any of their respective subsidiaries through the expiration of the 6-month period beginning on the day following the Closing Date (as defined in the Merger Agreement) (the “Vesting Date”), you will receive a cash payment equal to (i) the aggregate amount described in Section 6.2(a) of the Employment Agreement, determined as if your employment with the Company was terminated by the Company without Cause as of the Closing plus (ii) an amount equal to the portion of the premiums the Company would need to pay to provide you with the benefits under Sections 6.2(b) and (c) for the 12 month period following the Vesting Date, based on the premium costs in effect as of the Closing and assuming for this purpose that your employment terminated on the Vesting Date and that you timely elected to receive all such benefits, plus (iii) the Retention Bonus. The aggregate of these amounts will be paid to you in a lump sum on the third business day following the Release Effective Date (as defined below). You hereby agree that, notwithstanding anything contained in the Employment Agreement or any other agreement between you and the Company providing for severance or separation payments or benefits, you may either receive payment of amounts set forth in Section 2(a) or in Section 4, but in no event shall you be entitled to receive payment of both amounts; furthermore, you shall not be entitled to any severance or separation payments or benefits under the Employment Agreement (including under Sections 5 and 6 thereof) or under any other plan, program, policy, agreement or arrangement maintained by the Company, Parent or any of their respective affiliates, and all of your rights to such payments and benefits under the Employment Agreement and any such other plan, program, policy, agreement or arrangement will immediately terminate, in each case, except as otherwise provided herein. If you continue to be employed by Parent or its subsidiaries following the Vesting Date, you shall be eligible for severance benefits under either the applicable severance policy of Parent or one of its subsidiaries, as determined by Parent; provided, however, that you shall not receive credit for your service with Parent or the Company, or any of their respective subsidiaries, for the periods of employment that precede the Closing Date for any purpose under such policy, including eligibility, vesting or calculation of benefits.
Severance Payment If, during the Employment Term at any time during the period of twelve (12) consecutive months following the occurrence of a Change in Corporate Control, the Executive is involuntarily terminated (other than for Cause) or the Executive terminates his employment for Good Reason, then subject to compliance with the restrictive covenants in Section 9 and Section 10 and the execution and timely return by the Executive of the Release, the Executive shall be entitled to receive a lump sum severance payment equal to the present value of a series of monthly payments for twenty-four (24) months, each in an amount equal to one-twelfth (1/12th) of the sum of (i) the Executive’s Base Salary, as in effect at the time of the Change in Corporate Control, and (ii) the average of the annual bonuses paid to the Executive for the prior two fiscal years of the Company ending prior to the Change in Corporate Control, if any. Such present value shall be calculated using a discount rate equal to the interest rate on 90-day Treasury bills, as reported in the Wall Street Journal (or similar publication) on the date of the Change in Corporate Control. Such lump sum payment shall be made to the Executive within sixty (60) days following the date of such involuntary termination. In addition, if during the Employment Term within twelve (12) months after a Change in Corporate Control the Executive is involuntarily terminated (other than for Cause) or the Executive terminates his employment for Good Reason, he shall be entitled to continued coverage at the Company’s expense under any health insurance programs maintained by the Company in which the Executive participated at the time of his termination, which coverage shall be continued for eighteen (18) months or until, if earlier, the date the Executive obtains comparable coverage under a group health plan maintained by a new employer. To the extent the benefits provided under the immediately preceding sentence are otherwise taxable to the Executive, such benefits, for purposes of Section 409A of the Code (and the regulations and other guidance issued thereunder) shall be provided as separate monthly in-kind payments of those benefits, and to the extent those benefits are subject to and not otherwise excepted from Section 409A of the Code, the provision of the in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year.
Change in Control Severance Benefits If there is a Change in Control, and within one (1) year of such Change in Control, the Executive’s employment is terminated under the circumstances described in Sections 4(a) through 4(f) above, the Executive shall be entitled to the following: (I) if such termination is a termination by the Company without Cause pursuant to Section 4(a) or the Executive resigns for Good Reason pursuant to Section 4(b), the Company shall pay the Executive the Accrued Obligations and the Pro Rata Bonus and, in addition, subject to the provisions of Section 19, (A) an amount equal to twenty-four (24) months of the Executive’s Base Salary at the rate in effect on the date of termination or resignation, payable in a lump sum within sixty (60) calendar days of the date of termination or resignation; and (B) provided the Executive timely elects continuation coverage under COBRA, the Company shall also pay, on the Executive’s behalf, the portion of monthly premiums for the Executive’s group health insurance, including coverage for the Executive’s dependents, that the Company paid immediately prior to the date of termination or resignation, during the eighteen (18) month period following the date of termination or resignation, subject to the Executive’s continued eligibility for COBRA coverage. The Company will pay for such COBRA coverage for eligible dependents only for those dependents who were enrolled immediately prior to the date of termination or resignation. The Executive will continue to be required to pay that portion of the premium for the Executive’s health coverage, including coverage for the Executive’s eligible dependents, that the Executive was required to pay as an active employee immediately prior to the date of termination or resignation. Notwithstanding the foregoing, in the event that under applicable guidance the reimbursement of COBRA premiums causes the Company’s group health plan to violate any applicable nondiscrimination rule, the parties agree to negotiate in good faith a mutually agreeable alternative arrangement; and (II) if such termination is a termination or resignation under the circumstances described in Sections 4(c), 4(d), 4(e) or 4(f), the Executive shall be entitled to the compensation and benefits for which the Executive is eligible under such sections.
Severance Payments 5.1 The Company shall pay the Executive the payments described in this Section 5.1 ("Severance Payments") upon the termination of the Executive's employment following a Change in Control during the term of this Agreement, including the Executive's termination of employment for Good Reason, unless such termination is (a) by the Company for Cause, or (b) by reason of the Executive's Death or Disability. The Executive's employment shall be deemed to have been terminated following a Change in Control by the Company without Cause if the Executive's employment is terminated prior to a Change in Control without Cause at the direction (or action which constitutes a direction) of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control.
(i) Within three (3) business days after the Date of Termination, the Company shall make a lump sum or monthly, at the Executive's option, cash severance payment to the Executive in an amount equal to: (x) the Executive's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or in effect immediately prior to the Change in Control; and (y) a pro-rated portion of Executive's Targeted Annual Bonus for the fiscal year in which the Date of Termination occurs.
(ii) For a twelve (12) month period after the Date of Termination, the Company shall arrange to provide the Executive with medical and dental insurance benefits substantially similar to those that the Executive is receiving immediately prior to the Notice of Termination. Benefits otherwise receivable by the Executive pursuant to this Section 5.1(ii) shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during the twelve (12) month period following the Executive's termination of employment (and any such benefits actually received by the Executive shall be reported to the Company by the Executive).
5.2 The Company also shall pay to the Executive all legal fees and expenses incurred by the Executive in disputing the non-payment of Severance Payments in connection with a termination which entitles the Executive to Severance Payments. Such payments shall be made within five (5) business days after delivery of the Executive's written request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require.
Bonus Severance A lump-sum payment equal to 100% of the Executive’s target annual bonus as in effect for the fiscal year in which the CIC Qualified Termination occurs.
Severance Pay Notwithstanding the provisions of Article 62 (Severance Pay) of this Agreement, where the period of continuous employment in respect of which severance benefit is to be paid consists of both full and part-time employment or varying levels of part-time employment, the benefit shall be calculated as follows: the period of continuous employment eligible for severance pay shall be established and the part-time portions shall be consolidated to equivalent full-time. The equivalent full-time period in years shall be multiplied by the full-time weekly pay rate for the appropriate group and level to produce the severance pay benefit.
Change in Control Severance If, following the occurrence of a Change in Control, the Company or an Affiliate terminates the Executive's employment during the Post-Change Period other than as described in clause (i), (ii) or (iii) of Section 8(a), or if the Executive terminates his employment pursuant to Section 8(b), the Executive shall not be entitled to the severance compensation described in Section 7, and the Company will (i) pay or cause to be paid to the Executive the amounts described in Sections 8(c)(1), 8(c)(2), 8(c)(3), 8(c)(6) and 8(c)(7) within five business days after the Termination Date; (ii) pay or cause to be paid to the Executive the amount described in Section 8(c)(4), such amount to be payable no earlier than the date on which such Incentive Pay, if any, would have been paid under the applicable plan or policy of the Company absent such termination of employment; and (iii) provide the Executive the benefits described in Section 8(c)(5) for the period described therein.
(1) A lump sum payment in an amount equal to all Base Pay and Incentive Pay (other than for the calendar year of such termination of employment) owed to the Executive for periods on or prior to the Termination Date.
(2) A lump sum payment in an amount equal to two times the Executive's base salary pursuant to Section 4(a) (at the rate in effect immediately prior to the Termination Date).
(3) A lump sum payment equal to two times Incentive Pay (in an amount equal to the highest amount of Incentive Pay earned by the Executive in any calendar year during the three calendar years immediately preceding the calendar year in which the Change in Control occurred).
(4) In the event that the Termination Date occurs after June 30 in any calendar year, a lump sum payment equal to one times Incentive Pay for such calendar year, multiplied by a fraction, the numerator of which is the number of days between (and including) January 1 of the calendar year in which the Termination Date occurs and the Termination Date, and the denominator of which is 365.
(5) For a period of 24 months following the Termination Date (the "Continuation Period"), the Company will provide the Executive with medical, dental and life insurance benefits consistent with the terms in effect for such benefits for active employees of the Company during the Continuation Period. If and to the extent that any benefit described in this Section 8(c)(5) is not or cannot be paid or provided under any Company plan or program, then the Company will pay or provide for the payment to the Executive, his dependants and beneficiaries, of such employee benefits. Without otherwise limiting the purposes of Section 8(d), employee benefits otherwise receivable by the Executive pursuant to this Section 8(c)(5) will be reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during the Continuation Period following the Executive's Termination Date, and any such benefits actually received by the Executive shall be reported by the Executive to the Company.
(6) The Company will pay to the Executive the cost of employee outplacement services for the Executive in the amount of $30,000.
(7) The Company will pay the Executive a two-year automobile allowance in the amount provided to the Executive immediately prior to the Termination Date.
