Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Entry into Amended and Restated Executive Employment Agreements
On
Each Employment Agreement provides that the executive's employment will continue
until terminated by either party pursuant to the terms of the Employment
Agreement. The Employment Agreement also provides for an annual base salary for
the executive (
If the executive's employment is terminated due to the executive's death, the
executive's estate will receive the executive's base salary through the next
full calendar month and all other accrued but unpaid amounts owed to the
executive through his, her or their date of death. If the executive's employment
is terminated due to disability, the executive is entitled to an amount equal to
25% of the executive's base salary for the fiscal year in which the termination
takes place. The Employment Agreement further provides that if the executive's
employment with the Company is terminated by the Company other than for "cause,"
(as defined in the Employment Agreement) disability or death, or the executive
resigns for "good reason" (as defined in the Employment Agreement), the
executive will be eligible to receive: (1) the executive's base salary and all
other accrued but unpaid amounts owed to the executive through the date of
termination, (2) a lump-sum severance package equal to 12 months of the
executive's base salary, plus the amount of the executive's annual target bonus
opportunity for the fiscal year in which the termination occurs, and (3) a lump
sum payment reflecting 12 months of the total premium required to maintain
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), less 12 months of the executive's monthly premium contribution in
effect immediately prior to termination. The term "good reason" has the same
meaning across all Executive Agreements except that, in the case of
The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.1.
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Entry into Change in Control Agreements
On
The CIC Agreement entities each executive to receive certain benefits upon a change in control. For purposes of the CIC Agreement, the definition of a "change in control" is consistent with the exisiting definitions of "Corporate Transaction" as defined in the Company's Third Amended and Restated Long-Term Incentive Plan, as amended (the "Plan"), which Plan has been previously approved by shareholders of the Company. Specifically, a "change in control" means (1) the dissolution or liqudation of the surviving entity, (2) the sale of substanially all of the assets of the Company, or (3) any transaction which results in any person or entity (other than persons who are stockholders or affiliates of the Company immediately prior to the transaction) owning 50% or more of the combined voting power of all the classes of stock of the Company. The term "good reason" also has the meaning provided in the Equity Plan.
In order to receive the enhanced severance benefits provided under the CIC Agreement, the Company must experience a change in control and the executive must subsequently be terminated by the Company without "cause" or resign for "good reason" within twelve months of the change in control. This is known as a "double trigger" change in control arrangement and is consistent with the Plan and the Company's prior executive employment agreements that contained a change in control provision. If the executive's employment is terminated by the Company without cause or the executive resigns for good reason within one year following the change in control, the executive will be eligible to receive: (1) a lump sum payment equal to 1.5 times (or in the case of the CEO, 2 times) the sum of (a) the executive's base salary and (b) the executive's target bonus for the fiscal year in which the change in control took place; (2) a lump sum payment equal to the executive's annual target bonus opportunity for the fiscal year in which the change in control took place, prorated based on the number of months worked; and (3) a lump sum payment reflecting 12 months of the total premium required to maintain coverage under COBRA, less 12 months of the executive's monthly premium contribution in effect immediately prior to termination.
The foregoing description of the CIC Agreement is qualified in its entirety by reference to the full text of the CIC Agreement, which is attached to this Current Report on Form 8-K as Exhibit 10.2.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits Exhibit No. Description 10.1 Form of Amended and Restated Executive Employment Agreement 10.2 Form of Change in Control Agreement
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