AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and
Restated Employment Agreement (this “Restated
Agreement”) is entered into on October 14, 2008, by
and between Bruce R. Wright (the “Executive”)
and Ultratech, Inc., a Delaware corporation (the
“Company”) and, except as otherwise provided
herein, shall become effective as of January 1,
2009.
WHEREAS,
the Executive is currently serving as the Company’s Senior
Vice President, Finance and Chief Financial Officer;
WHEREAS,
the Executive is currently a party to an amended and restated
employment agreement with the Company dated January 15, 2007
(the “Prior Agreement”) ; and
WHEREAS,
the Company and the Executive desire to amend and restate the terms
and conditions of the Prior Agreement in order to bring such
agreement into documentary compliance with the applicable
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and the final Treasury
Regulations thereunder and continue Executive’s employment
with the Company upon the terms and conditions of this Restated
Agreement.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants contained herein, the Company and the Executive agree as
follows:
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1.
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Duties.
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1.1
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Retention.
The Company does hereby
retain, engage and employ the Executive as its Senior Vice
President, Finance, and Chief Financial Officer, reporting directly
to the Chief Executive Officer of the Company (the “
CEO ”), and the Executive does hereby accept and agree
to such retention, engagement and employment. The Executive shall
serve the Company in such positions and shall have the duties,
responsibilities and authorities consistent with such positions as
well as any other reasonable duties determined by the
CEO.
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1.2
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No Other Employment.
During the
Executive’s employment by the Company, the Executive shall
devote substantially all of his business time, energy and skill to
the performance of his duties for the Company.
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1.3
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No Breach of
Contract. The Executive hereby represents to
the Company that the execution and delivery of this Restated
Agreement by the Executive and the performance by the Executive of
the Executive’s duties hereunder shall not constitute a
breach of, or otherwise contravene, the terms of any employment or
other agreement or policy to which the Executive is a party or
otherwise bound. The Company hereby represents to the Executive
that it is authorized to enter into this Restated Agreement and
that the execution and delivery of this Agreement to the Executive
and the employment of the Executive hereunder shall not constitute
a breach of, or otherwise contravene, the terms of any law,
agreement or policy by which it is bound.
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2.
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At-Will Employment.
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The
Executive and the Company agree that Executive’s employment
with the Company is, and shall at all times during the
Executive’s employment hereunder be, “at-will”
employment. The Company may terminate the Executive’s
employment at any time for any reason, with or without Cause, by
providing thirty (30) days’ prior written notice to the
Executive. The Executive may terminate his employment with the
Company by providing thirty (30) days’ prior written
notice to the Company. Notwithstanding the foregoing, the Company
may relieve the Executive of his duties immediately upon, or at any
time during the thirty (30)-day period following, the delivery or
receipt of the written termination notice provided by the Company
or the Executive hereunder. No provision of this Restated Agreement
shall be construed as conferring upon the Executive a right to
continue as an employee of the Company, and the
“at-will” relationship between the Executive and the
Company may not be altered except as agreed by the Executive and
the Company in writing.
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3.
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Compensation.
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3.1
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Base Salary.
The Executive’s
Base Salary for the 2008 fiscal year shall be at a rate of $325,000
per year, paid in accordance with the Company’s regular
payroll practices in effect from time to time, but not less
frequently than monthly. The Executive’s Base Salary shall be
reviewed annually and may be adjusted by the Company’s Board
of Directors (the “Board”). As used in this
Restated Agreement, “Base Salary” shall mean the
Executive’s annual rate of Base Salary as adjusted from time
to time.
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3.2
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Annual Bonus.
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3.2.1
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While employed hereunder, the
Executive shall be eligible for an annual incentive bonus
(“Annual Bonus”) of up to eighty-five percent
(85%) of his Base Salary, based upon the achievement of performance
objectives established by the Compensation Committee of the Board
(the “Compensation Committee”) for an annual
performance period coterminous with the Company’s fiscal
year.
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3.2.2
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At
the time the Compensation Committee establishes the Annual Bonus
potential for the performance period, the Compensation Committee
may determine that up to 50% of the Annual Bonus earned by the
Executive for that performance period shall be deferred and shall
vest and be paid out in successive equal annual installments upon
the Executive’s completion of each year of continued
employment with the Company over a period of years (not to exceed
three years) measured from the last day of the performance period
to which that Annual Bonus relates (the “Deferral
Period”). The deferred portion of each Annual Bonus shall
accrue interest at prime, as such rate is set forth in The Wall
Street Journal from time to time, during the Deferral Period,
and the unpaid deferred portion of each Annual Bonus, together with
such accrued interest, shall immediately vest in the event
(i) the Executive terminates employment with Good Reason (as
defined in Section 7.2.1) or (ii) the Executive is
terminated by the Company other than for
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Cause (as defined in
Section 6.1.1) or (iii) the Executive’s employment
terminates by reason of death or Disability (as defined in
Section 5.1) or (iv) the Executive’s employment
terminates for any reason following a Change in Control or
Corporate Transaction. The deferred portion of each Annual Bonus
shall be forfeited to the extent the Executive’s employment
terminates for any other reason (or under any other circumstances)
prior to vesting in that portion. The deferred portion of each
Annual Bonus which vests on an accelerated basis shall be paid to
the Executive following his Separation from Service, in accordance
with the payment provisions of this Restated Agreement governing
the particular circumstances under which Executive incurs such
Separation from Service; provided, however, that any
such accelerated vesting and payment of the deferred portion of
each Annual Bonus shall be subject to the Executive’s
execution and delivery of an effective release and
non-disparagement agreement as required under the terms of this
Restated Agreement.
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3.2.3
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The
Compensation Committee may establish different performance
objectives or different target levels for each Annual Bonus
opportunity provided the Executive hereunder. In addition, the
maximum level of such Annual Bonus as a percentage of Base Salary
shall be reviewed annually by the Compensation Committee and may be
adjusted by the Compensation Committee, including (without
limitation) an adjustment to increase the maximum level of Annual
Bonus as a percentage of Base Salary.
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3.2.4
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The
portion of any bonus earned by the Executive for a particular
fiscal year performance period and not deferred pursuant to
Section 3.2.2 shall be paid by the 15th day of the third
calendar month following the close of that fiscal year or as soon
thereafter as administratively practicable, but in no event shall
such payment be made prior to the first business day of the fiscal
year next succeeding the fiscal year for which that bonus is earned
or later than the last day of that succeeding fiscal
year.
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3.3.1
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Future Grants.
In addition to the stock
options previously granted to the Executive, the Executive shall be
eligible for periodic grants of stock options or other equity
awards under the Company’s equity award program, subject to
the Executive’s continued employment hereunder. The term,
exercise price (if applicable), vesting period, any post-employment
provisions (including post- employment exercise periods) and the
remaining provisions of each stock option or other equity award
granted pursuant to this Section 3.3 shall, subject to the
express provisions of this Restated Agreement, be determined by the
Compensation Committee at the time of grant.
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3.3.2
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Acceleration and
Extension. Notwithstanding Section 3.3.1,
if the Executive’s employment is terminated (i) by the
Company for any reason other than for Cause (as defined in
Section 6.1.1) or (ii) by the Executive with Good Reason (as
defined in Section 7.2.1) or (iii) on account of death or
Disability, then each stock
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option and other equity award
granted on or after July 21, 2003 shall thereupon vest as to
an additional 25% of the shares of stock subject thereto (or such
lesser percentage as to make the award 100% vested). Further, in
the event of a Change of Control (as defined in Section 8.1.1)
or a Corporate Transaction (as defined in Section 8.1.2), all
of the options or other equity awards described in the preceding
sentence shall immediately vest in full. To the extent that the
equity awards described in this Section 3.3.2 are stock
options that have vested in accordance with their normal vesting
terms or that otherwise vest on an accelerated basis in accordance
with this Section 3.3.2, the period for which such stock
options shall remain exercisable for the vested option shares shall
be extended until a date at least one year and ninety
(90) days after the termination of the Executive’s
employment under the circumstance described in clauses (i),
(ii) or (iii) of this Section 3.3.2 or the
termination of the Executive’s employment under any
circumstances following a Change of Control or a Corporate
Transaction (or until such later date as may be specified in the
award agreement), but in no event will such options be exercisable
after the expiration of their original ten-year (or shorter)
maximum terms. Each of the Executive’s stock options granted
prior to July 21, 2003 shall be amended to add the foregoing
extended exercise provisions at such time, if any, that the
Compensation Committee determines, in its sole discretion, that
such amendment and the related accounting charges would not in any
war adversely affect, when relevant, the Company’s condition
(financial or otherwise), financial statements, earnings, earnings
per share or other relevant Company information.
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4.
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Benefits.
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4.1
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Pension and Welfare
Plans. While the Executive is employed
hereunder, he shall be entitled to participate in all employee
pension and welfare benefit plans and programs made available to
the Company’s senior level executives or to its employees
generally, as such plans or programs may be in effect from time to
time.
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4.2
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Reimbursement of Business and Other
Expenses; Perquisites.
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4.2.1
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Expense
Reimbursement. The Executive is authorized to incur
reasonable expenses in carrying out his duties and responsibilities
under this Restated Agreement, and the Company shall reimburse him
for all business expenses incurred in connection with carrying out
the business of the Company. Such reimbursements shall be subject
to the Company’s then-existing policies and procedures for
reimbursement of business expenses, including submission of written
requests for reimbursement, accompanied by supporting documentation
and receipts. The Executive must submit proper documentation for
each such expense within sixty (60) days after the later of
(i) the Executive’s incurrence of such expense or
(ii) the Executive’s receipt of the invoice for such
expense. If such expense qualifies hereunder for reimbursement,
then the Company will reimburse Executive for that expense within
fifteen (15) business days thereafter.
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4.2.2
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Legal Expenses.
The Company shall
promptly reimburse the Executive for his legal expenses, up to a
maximum of $3,000, incurred in obtaining advice with respect to the
changes effected by this Restated Agreement. Executive must submit
proper documentation for such legal expenses within sixty
(60) days after Executive’s receipt of the invoice for
such expenses, and the Company will reimburse Executive for those
expenses within fifteen (15) business days
thereafter.
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4.2.3
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Conditions to
Reimbursement. The following conditions shall be
applicable to each expense reimbursable pursuant to the provisions
of this Restated Agreement: (i) no such expense shall be
reimbursed later than the close of the calendar year following the
calendar year in which that expense is incurred, (ii) the
amounts eligible for reimbursement in any one calendar year shall
not affect the amounts reimbursable in any other calendar year and
(iii) the right to such reimbursement may not be liquidated or
exchanged for any other benefit.
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4.3
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Vacation.
During the
Executive’s employment hereunder, the Executive shall be
entitled to vacation in accordance with the Company’s
vacation policy for its executive officers.
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4.4
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Retiree Health
Coverage.
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4.4.1
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Effective upon the earliest of
(A) the occurrence of a Change of Control (as defined in
Section 8.1.1) while Executive is serving as an executive
officer of the Company, (B) the occurrence of a Corporate
Transaction (as defined in Section 8.1.2) while Executive is
serving as an executive officer of the Company, or (C) the first
date on which Executive (i) is at least sixty-two
(62) years old and (ii) has served as an executive officer of
the Company for ten (10) consecutive years (and is then
serving as such), and notwithstanding anything contained herein to
the contrary, the Executive and his spouse on the date of his
subsequent termination of employment (his
“Spouse”) shall each be entitled to the retiree
health care coverage described herein for the remainder of his or
her life following the termination of the Executive’s
employment for any reason. The retiree health care coverage to be
provided by the Company to the Executive and his Spouse until they
become entitled to Medicare coverage shall be comparable to the
health care coverage provided by the Company to the Executive and
his Spouse immediately prior to the termination of the
Executive’s employment. Once the Executive or his Spouse
becomes covered by Medicare, the Company shall provide retiree
health care coverage that, together with such Medicare coverage, is
comparable to the coverage that the Company provided to him or her
immediately prior to the Executive’s termination of
employment.
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4.4.2
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The
Executive and his Spouse shall, following his termination of
employment with the Company, elect to continue health care coverage
in accordance with the provisions of Section 4980B of the Code
and Section 10116.5 of the California Insurance Code
(“COBRA”). For the period of such COBRA
coverage, the retiree health care coverage for the Executive and
his Spouse shall be provided under the Company’s group health
plan. Following the expiration of the applicable period of COBRA
coverage, such retiree health care coverage shall
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continue to be provided under one or
more of the Company’s group health care plans;
provided, however, that to the extent such group
health care coverage is not available, the retiree health coverage
for the Executive and his Spouse shall be provided through health
insurance policy or policies acquired by the Executive and/or his
Spouse that provides the required level of health care coverage
hereunder, until each of them attains age sixty-five (65) and
thereafter through insurance policy or policies providing Medicare
supplemental coverage. The cost of such retiree health care
coverage for the Executive and his Spouse during each applicable
period of coverage hereunder shall be shared between the Company
and the Executive as follows:
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(i) For each
period the Executive and/or his Spouse are provided post-retirement
health care coverage under the Company’s group health plan,
the Company shall reimburse the Executive for the monthly cost he
incurs to obtain such continued coverage for himself and his
Spouse, to the extent that cost exceeds the amount that would be
charged active employees of the Company or their spouses for such
individual and/or spousal coverage for the same period under the
plan (the “Coverage Costs ”). In order to obtain
reimbursement for the reimbursable portion of those Coverage Costs,
the Executive must submit appropriate evidence to the Company of
each periodic payment within sixty (60) days after the payment
date, and the Company shall within thirty (30) days after such
submission reimburse the Executive for the reimbursable portion of
that payment.
(ii) To the extent
such post retirement health care coverage is provided through
health insurance policies acquired by the Executive and/or his
Spouse, the Company shall reimburse the Executive and/or his Spouse
for the portion of each premium paid by them in excess of the
dollar amount the Executive and/or his Spouse would have had to pay
for health care coverage for the period covered by the premium had
the Executive and/or his Spouse been an active participant under
the Company’s group health plan at that time. The applicable
insurance premiums shall be paid by the Executive and/or the Spouse
on or before each due date, and supporting documentation evidencing
such payment shall be provided to the Company within sixty
(60) days following such payment. The Company shall reimburse
the Executive and/or his Spouse for the reimbursable portion of
each such insurance premium payment within thirty
(30) business days following receipt of the supporting
documentation for such payment.
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4.4.3
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During the period such health care
coverage remains in effect hereunder, the following provisions
shall govern the arrangement: (a) the amount of health care
Coverage Costs and premium payments eligible for reimbursement in
any one calendar year of such coverage shall not affect the amount
of Coverage Costs and premium payments eligible for reimbursement
in any other calendar year for which health care coverage is to be
provided hereunder (ii) no health care Coverage Costs or
premium payments shall be reimbursed after the close of
the
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calendar year following the calendar
year in which those Coverage Costs or premium payments were
incurred; and (iii) the right to reimbursement of such
continued health care Coverage Costs and premium payments cannot be
liquidated or exchanged for any other benefit.
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4.4.4
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The
Executive and his Spouse shall be solely responsible for any
federal, state or local tax liability arising from the
post-retirement health care coverage and benefits provided them
hereunder, and the Company shall have no obligation to indemnify or
reimburse them for any tax liability they so incur. Accordingly, to
the extent the reimbursed Coverage Costs or premium payments
constitute taxable income to the Executive, the Company shall
report the reimbursement as taxable W-2 wages and collect the
applicable withholding taxes, and any remaining tax liability shall
be the Executive’s sole responsibility.
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5.
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Death or Disability.
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5.1
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Definition of Disabled and
Disability. For purposes of this Restated
Agreement, the terms “Disabled” and
“Disability” shall mean the Executive’s
inability, because of physical or mental illness or injury, to
perform his customary duties pursuant to this Restated Agreement,
with or without reasonable accommodation, and the continuation of
such disabled condition for a period of one hundred eighty
(180) continuous days as determined by an approved medical
doctor. For purposes hereof, an approved medical doctor shall mean
a doctor selected by the Company and the Executive. If the Company
and the Executive cannot agree on a medical doctor, each shall
select a medical doctor, and the two doctors shall select a third
who shall be the approved medical doctor for this
purpose.
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5.2
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Termination Due to Death or
Disability. If the Executive dies or becomes
Disabled while employed hereunder and prior to a Change of Control
(as defined in Section 8.1.1) or a Corporate Transaction (as
defined in Section 8.1.2), this Restated Agreement and the
Executive’s employment shall automatically cease and
terminate as of the date of the Executive’s death or the date
of Disability (which date shall be determined in accordance with
Section 5.1 and referred to as the “Disability
Date”), as the case may be. In the event of the
termination of the Executive’s employment due to his death or
Disability, the Executive (or, in the event of his death, his
estate) shall be entitled to receive:
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(i)
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a
lump sum cash payment, payable either on the Disability Date or
within ten (10) business days after the date of
Executive’s death, equal to the sum of (A) any currently
earned but unpaid Base Salary as of the date of death or the
Disability Date, (B) any accrued but unpaid vacation pay and
(C) any unreimbursed business expenses due under
Section 4.2.1 of this Restated Agreement;
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(ii)
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a
lump sum payment, to be made within ten (10) business days
after the date of the Executive’s Separation from Service due
to his death or Disability, equal to the deferred portion of any
Annual Bonuses for fiscal years completed prior to the date of
Executive’s death or the Disability Date which vest on an
accelerated basis (in accordance with Section 3.2.2) by reason
of his death or Disability;
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(iii)
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a
series of twelve (12) successive monthly payments, each equal
to one-twelfth (1/12th) of the Executive’s annual Base Salary
in effect immediately prior to his death or Disability Date, with
the first such payment to be made on the first day of the first
month immediately following the month in which the
Executive’s Separation from Service occurs as a result of the
Executive’s death or Disability;
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(iv)
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accelerated vesting of a portion of
the Executive’s stock options and other equity awards, and
extension of time to exercise each vested stock option, to the
extent provided in Section 3.3.2;
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(v)
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any
vested and accrued employee benefits described in Section 4.1
that are by their terms payable to the Executive or his estate on
or after his termination of employment, with each such benefit to
be paid in accordance with the applicable terms in effect for such
payment at the time of the Executive’s death or Disability;
and
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(vi)
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solely in the event the
Executive’s employment terminates due to his Disability at a
time when the Executive is not otherwise entitled to retiree health
coverage pursuant to the provisions of Section 4.4 and the
Executive elects to continue his medical coverage under COBRA,
reimbursement by the Company of such COBRA costs for a period of up
to eighteen (18) months following the termination of his
employment; provided, however, that the
Company’s obligation under this Section 5.2(vi) shall be
reduced to the extent that comparable medical coverage is provided
by a subsequent employer.
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Any other vested
compensation deferred on behalf of the Executive at the time of his
death or Disability under any deferred compensation plan shall be
paid at the time or times specified for payment pursuant to the
provisions of such plan.
Any pro-rated
Annual Bonus to which the Executive may, in accordance with the
provisions governing that Annual Bonus, become entitled for the
fiscal year performance period in which his death or Disability
Date occurs shall be paid to the Executive by the fifteenth (15th)
day of the third calendar month following the close of that fiscal
year or as soon thereafter as administratively practicable, but in
no event shall such payment be made prior to the first day of the
fiscal year next succeeding the fiscal year for which that bonus is
earned or later than the last day of that succeeding fiscal
year.
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6.
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Termination by the
Company.
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6.1
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Termination For
Cause.
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6.1.1
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Definition of Termination with
Cause. A
termination of the Executive’s employment by the Company for
cause (“ Cause ”) shall mean the termination of
the Executive’s employment by the Board for any of the
reasons listed below, except that in the case of the reasons set
forth in (i) and (vi) below, only after written notice by
the Board stating the reason for the proposed termination for Cause
and the Executive’s failure to cure the stated reason within
ninety (90) days after receipt of such notice:
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(i)
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the
Executive’s repeated failure to perform any essential duty of
his position other than due to Disability or such illness or injury
as described in and determined under Section 5.1 that would
result in Disability if it continued for the period of time
prescribed in Section 5.1;
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(ii)
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the
Executive’s commitment of an act that constitutes gross
misconduct and is injurious to the Company, any subsidiary of the
Company or any successor to the Company;
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(iii)
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the
Executive’s conviction of or pleading guilty or nolo
contendere to any felony involving theft, embezzlement,
dishonesty or moral turpitude;
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(iv)
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the
Executive’s commission of an act of fraud against, or the
misappropriation of property belonging to, the Company, any
subsidiary of the Company or any successor to the
Company;
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(v)
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the
Executive’s commitment of an act of dishonesty in connection
with his responsibilities as an employee that is intended to result
in his personal enrichment or the personal enrichment of his family
or others; or
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(vi)
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the
Executive’s material breach of this Restated Agreement or
other agreement between the Executive and the Company or any
subsidiary of the Company or successor to the Company.
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6.1.2
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Entitlements Upon a Termination for
Cause. If the Executive’s employment
is terminated for Cause, the termination shall be effective on the
date the Company gives the Executive written notice of termination,
except that in the case of a termination for a reason stated in
Section 6.1.1 (i) or Section 6.1.1(vi), the
termination shall be effective on the last day of the ninety
(90)-day cure period should Executive fail to cure the stated
reason within such cure period. In the event of the termination of
the Executive’s employment hereunder due to a termination by
the Company for Cause prior to a Change of Control (as defined in
Section 8.1.1) or a Corporate Transaction (as defined in
Section 8.1.2), then the Executive shall be entitled to
receive:
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(i)
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a
lump sum cash payment, payable on the date of such termination,
equal to the sum of (A) any currently earned but unpaid Base
Salary as of the date of such termination of employment,
(B) any accrued but unpaid vacation pay and (C) any
unreimbursed business expenses due under Section 4.2.1 of this
Restated Agreement;
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(ii)
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any
vested and accrued employee benefits described in Section 4.1
that are by their terms payable to the Executive on or after his
termination of employment, with each such benefit to be paid in
accordance with the applicable terms in effect for such payment at
the time of the Executive’s termination; and
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(iii)
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the
retiree health coverage (if any) to which the Executive may at the
time be entitled under Section 4.4.
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Any other vested
compensation deferred on behalf of the Executive at the time of his
termination by the Company for Cause under any deferred
compensation plan shall be paid at the time or times specified for
payment pursuant to the provisions of such plan.
6.2
Termination Without Cause.
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6.2.1
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Basic Benefits.
If the Executive’s
employment is terminated by the Company without Cause, the
termination shall be effective on the thirtieth (30
th
) day following written
notice of such termination to the Executive. In the event of such
termination without Cause prior to a Change of Control (as defined
in Section 8.1.1) or a Corporate Transaction (as defined in
Section 8.1.2), Executive shall be entitled to
receive:
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(i) a lump sum
cash payment, payable on the date of such termination of
employment, equal to the sum of (A) any currently earned but
unpaid Base Salary as of the date of such termination of
employment, (B) any accrued but unpaid vacation pay and (C)
any unrei
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