EMPLOYMENT AGREEMENT (this “ Agreement
”), dated as of June 3, 2008 between inVentiv Health, Inc., a
Delaware corporation with an office at 200 Cottontail Lane, Vantage
Court North, Somerset, New Jersey 08873 (the “
Employer
”), and R. Blane Walter, an individual whose current
residence is as reflected in the Employer’s records (the
“ Executive
”).
WHEREAS , the Executive has been employed by and currently
serves as the Employer’s President pursuant to an employment
agreement between the Executive and the Employer, dated as of
August 7, 2007 (the “ 2007 Agreement
”);
WHEREAS , prior to the 2007 Agreement, the Executive served
as President and Chief Executive Officer of the Employer’s
subsidiary, InVentiv Communications, Inc. (f/k/a inChord
Communications, Inc.), pursuant to an Employment Agreement, dated
as of September 6, 2005 between inVentiv Communications, Inc. and
the Executive (the “ 2005 Agreement
” and collectively with the 2007 Agreement, the “
Prior
Agreements ”);
WHEREAS , the Employer desires that Executive serve as its
Chief Executive Officer, and Executive is willing to accept such
employment by the Employer, on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS , except where otherwise specified, the parties
desire to supersede and replace the Prior Agreements with this
Agreement.
NOW THEREFORE , in consideration of the mutual covenants and
promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties agree as
follows:
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1.
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Term of Employment; Title; Duties; Authority .
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(a)
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The
Employer hereby employs the Executive, and the Executive hereby
accepts employment with the Employer, upon the terms set forth in
this Agreement, effective June 11, 2008 (the “ Effective Date
”) and continuing until the date of the termination of the
Executive’s employment hereunder in accordance with the terms
of this Agreement (the “ Termination
Date ”). The Executive shall serve as the
Chief Executive Officer of the Employer from and after the
Effective Date, with such authority, duties and responsibilities as
are commensurate with such position.
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(b)
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During
the term of his employment hereunder, the Executive shall report to
the Board of Directors of the Employer (the “ Board
”). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the
Acquisition Agreement dated as of September 6, 2005 (the “
Acquisition
Agreement ”) relating to the acquisition by a
subsidiary of the Employer of inVentiv Communications,
Inc.
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(a)
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During
the term of his employment hereunder, the Executive agrees to
devote his entire business time and attention to the performance of
his duties under this Agreement. The Executive shall
perform his duties to the best of his ability and shall use his
reasonable best efforts to further the interests of the
Employer. The Executive shall not, while employed by the
Employer, unless otherwise agreed to in advance in writing by the
Employer, commence employment with any other party or become
self-employed, provided that it shall not constitute a breach of
the Executive’s obligations under this Section 2(a) to
(i) serve on corporate, civic or charitable boards or
committees, subject to Section 8 of this Agreement,
(ii) deliver lectures or fulfill speaking engagements, subject
to Section 9 of this Agreement, or (iii) manage personal
investments, in each case so long as such activities do not
materially interfere with the Executive’s performance of his
duties to the Employer. It is expressly understood and
agreed that, to the extent that any such activities are being
conducted by the Executive as of the date of this Agreement, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) in a substantially similar
manner and degree subsequent to the date of this Agreement shall be
deemed not to materially interfere with the performance of the
Executive’s duties to the Employer under this
Agreement. The Executive shall not be required to be
based at any office or location outside the greater Columbus, Ohio
metropolitan area or to relocate his residence but will spend such
time at other office locations of the Employer as is reasonable for
the proper discharge of his duties as Chief Executive Officer of
the Employer.
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(b)
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The
Executive represents and warrants to the Employer that he is able
to enter into this Agreement and that his ability to enter into
this Agreement and to fully perform his duties hereunder are not
limited to or restricted by any agreements or understandings
between the Executive and any other person. For the
purposes of this Agreement, the term “ person ”
means any natural person, corporation, partnership, limited
liability partnership, limited liability company or any other
entity of any nature.
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(a)
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The
Employer shall pay the Executive a base salary at an annualized
rate of $550,000, subject to annual review by the Board or the
Compensation Committee thereof (the “ Compensation
Committee ”), which may increase, but not decrease,
the amount (the “ Base Salary
”). The Base Salary shall be paid periodically in
accordance with the Employer’s ordinary payroll practices for
executive personnel, less deductions required by law or pursuant to
the benefit plans and policies of the Employer and its
affiliates.
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(b)
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The
Executive shall be eligible for a bonus in each calendar year,
commencing with calendar year 2008, based on the Executive’s
success in reaching or exceeding performance objectives (the
“ Bonus
”), as determined by the Board or the Compensation Committee,
the amount of such Bonus, if any, to be determined in the
discretion of the Board or the Compensation Committee, and (unless
the Executive’s employment is terminated by the Employer
without Cause between January 1 and January 15 of the year
following the year with respect to which the Bonus is earned)
subject to the Executive remaining employed by the Employer through
January 15 of the year following the year with respect to which the
Bonus is earned (the “ Payment Eligibility
Condition ”). Any Bonus will be paid at the
same time bonuses are paid to executive officers generally (but in
no event later than December 31 of the year following the year with
respect to which the Bonus relates). The
Executive’s target Bonus in each calendar year commencing on
and after January 1, 2009 shall be 100% of the
Executive’s then current Base Salary (“ Target
”) and the maximum Bonus that may be paid shall be 200% of
the Executive’s then current Base Salary (“
Maximum
”). With respect to 2008, the Executive shall be
eligible for a Bonus as follows: (i) in accordance with
the 2007 Agreement, a Bonus with respect to the period from January
1, 2008 until December 31, 2008 based on the Executive’s
success in reaching or exceeding performance objectives, provided
that such Bonus shall be determined by the Compensation Committee
for such period, and (ii) the Executive shall be eligible for an
additional Bonus with respect to the period from the Effective Date
until December 31, 2008 in an amount (A) determined on the same
basis as clause (i) (with such appropriate modifications, if any,
in the non-quantitative criteria as the Compensation Committee may
reasonably establish) but assuming the Target and Maximum were in
effect during all of 2008, multiplied by (B) a fraction, the
numerator of which is the number of days remaining in 2008 after
the Effective Date and the denominator of which is 366 (“2008
Fraction”) minus (B) the amount that the Executive receives
under clause (i) above multiplied by the 2008
Fraction. The amount of each Bonus, if any, that is
actually awarded, shall be determined at the discretion of the
Board or the Compensation Committee. All or any portion
of the Bonus may be awarded pursuant to a plan satisfying the
requirements of Section 162(m) of the Internal Revenue Code of
1986, as amended (the “ Code
”).
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(c)
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Subject
to the execution by the Executive of the Employer’s
applicable award documentation, the Employer shall grant to the
Executive (i) in respect of the Executive’s promotion to
Chief Executive Officer of the Employer, a special equity incentive
award grant on or about June 11, 2008 having a value of at least
$1,250,000 (the “ Promotional
LTI ”). One-third of the value of the
Promotional LTI shall be made in the form of restricted stock and
two-thirds of the value of the Promotional LTI shall be made in the
form of stock options. The award documentation for the
Promotional LTI shall be in substantially the form used for grants
to other executive officers of the Employer; provided, however,
that, subject to accelerated vesting under the applicable plan
pursuant to which the Promotional LTI was made or this Agreement,
the Promotional LTI restricted stock award shall vest in two equal
installments on each of the second and fifth anniversaries of the
Effective Date and the Promotional LTI award made in the form of
stock options shall vest in four equal annual installments
commencing on the first anniversary of the date of grant, in each
case assuming continued service through each applicable vesting
date. The value of equity awards shall be determined in
accordance with Statement of Financial Accounting Standards No.
123R.
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(d)
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(i)
The Executive shall be awarded as part of the Employer’s 2009
annual equity grant program an equity grant having a value of at
least $1,000,000 (the “ 2009 LTI
”). One-third of the value of the 2009 LTI shall
be made in the form of restricted stock and two-thirds of the value
of the 2009 LTI shall be made in the form of stock
options. The award documentation for the 2009 LTI shall
be in substantially the form used for grants to other executive
officers of the Employer; provided, however, that, subject to
accelerated vesting under the applicable plan pursuant to which the
2009 LTI is made or this Agreement, the 2009 LTI awards shall vest
in four equal annual installments commencing on the first
anniversary of the date of grant assuming continued service through
each applicable vesting date.
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(ii)
Commencing in 2010, the Executive shall be eligible to receive
annual equity grants commensurate with the Executive’s
position, with each such grant, if any, subject to the
discretion of the Compensation Committee (the “
Annual
LTI ”). Without limiting such
discretion, the Employer and the Executive acknowledge that
each Annual LTI shall be expected to have a value of at least
$1,000,000. The award documentation for each Annual
LTI shall be in substantially the form used for grants to
other executive officers of the Employer, subject to
accelerated vesting under the applicable plan pursuant to
which the Annual LTI is made or this Agreement.
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(e)
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All
grants provided for herein shall be subject to (i) the terms and
conditions of the inVentiv Health, Inc. 2006 Long-Term Incentive
Plan (or any successor plan), and (ii) the Executive
remaining employed until the time of the applicable
grant.
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(a)
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The
Executive shall be entitled to participate in all benefit plans,
policies, programs or arrangements which the Employer provides to
its executive officers in accordance with the terms thereof as in
effect from time to time. The Employer represents, and
the Executive acknowledges that, the Employer does not maintain any
retirement programs as of the date hereof other than the
Employer’s 401(k) plan and its executive nonqualified
deferred compensation plan.
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(b)
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The
Executive shall be entitled to five (5) weeks of vacation during
each year of employment, to be prorated monthly for partial
years. Such vacation shall be taken at such time or
times consistent with the reasonable needs of the business of the
Employer. The Executive shall be entitled to sick leave
and holidays in accordance with the policies of the
Employer.
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(c)
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During
the period of the Executive’s employment, the Employer shall
pay to the Executive as a car allowance the net amount of $833 per
month paid as taxable wages. The allowance will end
effective with the Executive’s termination.
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(d)
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The
Employer shall provide the Executive with term life insurance
coverage that provides at least $3 million dollars in death
benefits to the Executive’s designated
beneficiaries.
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(e)
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For
so long as the Executive is an officer or director of the Employer
or any of its subsidiaries and thereafter for so long as such
insurance is carried by the Employer, the Employer shall provide,
at its expense, director’s and officer’s insurance and
indemnity coverage covering the Executive, in each case on the same
terms as it provides to other executive officers and directors of
the Employer or its subsidiaries or, for any period during which
the Executive is no longer employed, on the same terms as it
provides to other former executive officers and directors of the
Employer or its subsidiaries.
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5.
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Reimbursement of Business Expenses .
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The
Employer shall reimburse the Executive in accordance with the
Employer’s policies generally applicable to executive
officers for all reasonable out-of-pocket costs (including,
without limitation, the cost of chartered airplane travel when
reasonable alternative travel is not practicable) incurred or
paid by the Executive in connection with, or related to, the
performance of his duties, responsibilities or services under
this Agreement, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other
supporting information as the Employer may reasonably
request.
For
purposes of this Agreement, “ Disabled
” or “ Disability
” means the suffering of a physical or mental incapacity
as a result of which the Executive becomes unable to continue
to perform fully his duties, with “reasonable
accommodation,” as defined in the Americans with
Disabilities Act and applicable state laws, hereunder for a
consecutive period of one hundred twenty (120)
days. The Employer may terminate the
Executive’s employment by reason of Disability upon ten
(10) days’ prior written notice. At the
Employer’s option, such physical or mental incapacity
may be determined by a physician selected by the Employer and
reasonably acceptable to Executive or presumed by the Employer
on the basis of Executive’s failure to perform the
duties and services of his position for a period of one
hundred twenty (120) days.
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(a)
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The
Executive’s employment shall be “at will” and may
be terminated at any time by the Employer with or without Cause,
subject to the terms of this Agreement.
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(b)
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For
the purposes of this Agreement, “ Cause ”
shall mean any of the following: (i) a material
breach by the Executive of this Agreement, including without
limitation the provisions of Section 8 or 9 of this Agreement,
which, to the extent susceptible of cure, is not cured within ten
(10) business days after written notice to the Executive (or any
shorter notice period reasonably necessary to avoid material harm
to the Employer) that identifies with reasonable specificity the
manner in which the Employer believes the Executive has breached;
(ii) the Executive willfully engaging in misconduct which is
materially injurious to the Employer or any of its Affiliates;
(iii) the Executive’s willful gross neglect of his duties for
which he is employed or refusal or failure to follow the material,
lawful directives of the Board or a committee thereof in any
material respect, in either case, where such neglect, refusal or
failure is not due to the Executive’s physical or mental
incapacity and, which to the extent susceptible of cure, is not
cured within ten (10) business days after written notice to the
Executive (or any shorter notice period reasonably necessary to
avoid material harm to the Employer) that identifies with
reasonable specificity the willful gross neglect or failure to
follow directives; and (iv) the Executive’s conviction of a
felony or of any misdemeanor involving dishonesty, fraud or moral
turpitude or the entry of a guilty or nolo
contendere
plea with respect thereto. For purposes of this Section
7(b), no act or failure to act on the part of the 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 act or omission was in the best interests of the
Employer. Any act, or failure to act, based upon express
authority given pursuant to the written direction of the Board with
respect to such act or omission shall be presumed to be done, or
omitted to be done, by the Executive in good faith and in the best
interests of the Employer. The termination of the
Executive’s employment for Cause shall not be deemed to be
effective unless and until the Board finds (after reasonable
notice, specifying the particulars thereof in reasonable detail, is
provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board),
that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in clause (i), (ii), (iii) or (iv)
above.
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(c)
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The
Executive may terminate his employment with the Employer for
“Good Reason” by notice to the Employer (i) within
ninety (90) days of the occurrence or the events or circumstances
in which such termination for “Good Reason” is based
and (ii) following, in the case of any termination for “Good
Reason” pursuant to clause (i), (ii), (iii) or (vi) below,
reasonable notice, specifying the particulars thereof in reasonable
detail, to the Board an opportunity for the Board, together with
counsel, to confer with the Executive. For purposes of
this Agreement, “ Good Reason
” shall mean any of the following: (i) the
assignment to the Executive of any duties materially inconsistent
with the Executive’s position as Chief Executive Officer
(including status, offices, title(s) and reporting requirements),
authority, duties or responsibilities, or any other action by the
Employer which results in a material diminution in such position,
authority, duties or responsibilities, excluding for this purpose
any action not taken in bad faith and which is remedied by the
Employer within ten (10) business days after receipt of written
notice thereof given by the Executive that identifies with
reasonable specificity the manner in which the Executive believes
the Employer has violated this clause; (ii) any failure of the
Executive to be nominated for election as a director of the
Employer or the removal of the Executive as a director of the
Employer by the Board other than for Cause; (iii) any material
breach of this Agreement by the Employer or its subsidiaries, that
is not remedied by the Employer within ten (10) business days after
written notice to the Employer that identifies with reasonable
specificity the manner in which the Executive believes the Employer
or subsidiary, as applicable, has breached this Agreement;
(iv) any purported termination by the Employer of the
Executive’s employment otherwise than as expressly permitted
by this Agreement; (v) any failure by the Employer to comply with
and satisfy Section 16(h) of this Agreement which is not remedied
within ten (10) business days after the closing of a transaction
contemplated by subparagraph (ii) of Section 16(h) of this
Agreement; or (vi) any termination of employment by the Executive
during the thirty (30) day period following the one (1) year
anniversary of a Change in Control.
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(d)
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The
Executive may terminate his employment other than for Good Reason,
provided that prior to any termination pursuant to this Section
7(d), the Executive shall provide not less than forty-five (45)
days’ prior written notice thereof to the Board.
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(e)
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Upon
any termination of employment, regardless of the reason therefor,
the Employer shall pay to the Executive or his estate (i) the Base
Salary through the date of termination, (ii) subject to
satisfaction of the Payment Eligibility Condition, any earned but
unpaid Bonus amount (subject to any existing deferral elections
with respect thereto), (iii) any expenses subject to reimbursement
in accordance with Section 5 of this Agreement and (iv) any
benefits due to Executive under any employee benefit plan of the
Employer and any payments due to Executive under the terms of any
Employer program, arrangement or agreement, excluding any severance
program or policy, in each case at the times and in the amounts
determined in accordance with the terms of such plan, program,
arrangement or agreement (the “ Accrued
Amounts ”). Upon any termination of
employment by the Employer for Cause or by the Executive other than
for Good Reason, the Executive shall be entitled only to the
Accrued Amounts and the Employer shall, except as required by law,
have no other obligations hereunder or otherwise with respect to
the Executive’s employment from and after the termination
date and shall have no other obligations to the Executive in
respect of such termination (including under any severance plan or
policy of the Employer or any of its affiliates), and the Employer
shall continue to have all other rights available
hereunder.
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(f)
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(i) If
the Executive’s employment is terminated by the Employer
without Cause or due to Disability or if the Executive terminates
his employment for Good Reason, in each case prior to a Change in
Control, then in addition to the payment of the Accrued Amounts,
the Executive shall be entitled to: (A) a lump sum
payment, payable, subject to Section 13, within the (10) business
days of the date of the Executive’s termination, equal to the
product of (x) two and (y) the sum of (I) the aggregate of the Base
Salary that would otherwise have been payable if the Executive
continued the Executive’s employment hereunder for twelve
(12) months following the date of such termination and (II) the
average annualized Bonus paid to the Executive for the three (3)
preceding fiscal years (or such shorter period that the Executive
has been Chief Executive Officer, if higher), disregarding any
fiscal years for which the Executive was not eligible for a Bonus
in accordance with the terms hereof or, with respect to a
Termination due to without Cause or due to Disability or if the
Executive terminates his employment for Good Reason prior to
January 15, 2009, 100% of 2008 Base Salary; and (B) vesting of all
equity incentive awards, including options, stock appreciation
rights, restricted stock and restricted shares previously granted
to the Executive (and with respect to any performance-based awards,
based on the deemed attainment of applicable performance objectives
at target levels), and each such equity incentive award shall
remain exercisable, where applicable (but subject to the terms of
the equity plan under which such awards were granted relating to
extraordinary transactions and forfeiture for misconduct), to the
applicable date provided in Section 13 of this
Agreement. Such severance pay shall be paid, net of
payroll taxes and other legally required deductions. The
Employer shall, except as required by law and as described in
Section 7(i) of this Agreement, have no other obligations hereunder
or otherwise with respect to the Executive’s employment from
and after the termination date and shall have no other obligations
to the Executive in respect of a termination described in the first
sentence of this Section 7(f)(i) (including under any severance
plan or policy of the Employer or any of its affiliates), and the
Employer shall continue to have all other rights available
hereunder.
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(ii) If
the Executive dies prior to a Change in Control, then in
addition to the payment of the Accrued Amounts, all equity
incentive awards, including options, stock appreciation
rights, restricted stock and restricted shares previously
granted to the Executive (and with respect to any
performance-based awards, based on the deemed attainment of
applicable performance objectives at target levels) shall
immediately vest and each such equity incentive award shall
remain exercisable, where applicable (but subject to the terms
of the equity plan under which such awards were granted
relating to extraordinary transactions and forfeiture for
misconduct), to the applicable date provided in Section 13 of
this Agreement. Such acceleration shall be subject to required
payroll taxes and other legally required deductions, if
any. The Employer shall, except as required by law
and as described in Section 7(i) of this Agreement, have no
other obligations hereunder or otherwise with respect to the
Executive’s employment from and after the termination
date and shall have no other obligations to the Executive in
respect of a termination described in the first sentence of
this Section 7(f)(ii) (including under any severance plan or
policy of the Employer or any of its affiliates), and the
Employer shall continue to have all other rights available
hereunder.
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(g)
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Upon
a Change in Control during the Executive’s employment
hereunder, the Executive shall be entitled to: (i) a
lump sum payment equal to the product of (x) two and (y) the sum of
(A) the aggregate of the Base Salary that would otherwise have been
payable if the Executive continued the Executive’s employment
hereunder for twelve (12) months following such Change in Control
and (B) the average annual Bonus paid to the Executive for the
three (3) preceding fiscal years (or such shorter period that the
Executive has been Chief Executive Officer, if higher),
disregarding any fiscal years for which the Executive was not
eligible for a Bonus in accordance with the terms hereof or, with
respect to a Change in Control prior to January 15, 2009, 100% of
2008 Base Salary; (ii) full vesting of all equity incentive awards,
including options, stock appreciation rights, restricted stock and
restricted shares previously granted to the Executive (and with
respect to any such equity awards that may be performance-based,
based on the deemed attainment of applicable performance objectives
at target levels), and each such equity incentive award shall
remain exercisable, where applicable (but subject to the terms of
the equity plan under which such awards were granted relating to
extraordinary transactions and forfeiture for misconduct), to the
applicable date provided in Section 13(a) of this Agreement; and
(iii) any Gross-Up Payment due in accordance with Section 7(l) of
this Agreement. The amount described in clauses (i) and
(iii) of the preceding sentence shall be payable net of payroll
taxes and other legally required deductions. The
Employer shall have no other obligations to the Executive in
respect of a Change in Control (including under any severance plan
or policy of the Employer or any of its affiliates) and the
Employer and Executive shall continue to have all other rights
available hereunder.
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(h)
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If
the Executive is terminated by the Employer without Cause, if the
Executive terminates his employment for Good Reason or if the
Executive is terminated for Disability, in each case within
thirteen (13) months after a Change in Control, then in addition to
the payment of the Accrued Amounts, the Executive shall be entitled
to receive a lump sum payment, subject to Section 13, equal to the
sum of: (i) the aggregate of the Base Salary that would
otherwise have been payable if the Executive continued the
Executive’s employment hereunder for twelve (12) months
following such termination; (ii) the average annualized Bonus paid
to the Executive for the three (3) preceding fiscal years, (or such
shorter period that the Executive has been Chief Executive Officer,
if higher), disregarding any fiscal years for which the Executive
was not eligible for a Bonus in accordance with the terms hereof
or, with respe
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