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EXECUTIVE EMPLOYMENT AGREEMENT

Employee Retention Agreement

EXECUTIVE EMPLOYMENT AGREEMENT | Document Parties: ALLIED WASTE INDUSTRIES INC You are currently viewing:
This Employee Retention Agreement involves

ALLIED WASTE INDUSTRIES INC

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Date: 8/1/2008
Industry: Waste Management Services     Sector: Services

EXECUTIVE EMPLOYMENT AGREEMENT, Parties: allied waste industries inc
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EXHIBIT 10.6

EXECUTIVE EMPLOYMENT AGREEMENT

     ALLIED WASTE INDUSTRIES, INC., a Delaware corporation (“Company”) and TIMOTHY R. DONOVAN (“Executive”) enter into this amended and restated Executive Employment Agreement (“Agreement”) as of this 22 nd day of June, 2008 to set forth the terms and conditions of Executive’s employment. This Agreement supersedes any prior employment agreement(s) between the parties. The parties agree as follows:

     1.  Certain Definitions and Understandings . As used in this Agreement, the following terms have the meanings prescribed below:

          Annual Incentive Compensation is defined in Section 4.2.

           Base Salary is defined in Section 4.1.

           Beneficial Owner is defined in Rule 13(d)-3 under the Exchange Act; provided, however, and without limitation, that any individual, corporation, partnership, group, association or other person or entity that has the right to acquire any Voting Stock at any time in the future, whether such right is (a) contingent or absolute, or (b) exercisable presently or at any time in the future, pursuant to any agreement or understanding or upon the exercise or conversion of rights, options or warrants, or otherwise, shall be the Beneficial Owner of such Voting Stock.

           Board of Directors (or Board) means the Company’s Board of Directors.

           Cash Termination Excise Tax is defined in Section 6.6(a).

           Cause is defined in Section 5.3.

           Change in Control of the Company means one of the following: (a) the Company merges or consolidates, or agrees to merge or to consolidate, with any other corporation (other than a wholly-owned direct or indirect subsidiary of the Company) and is not the surviving corporation (or survives as a subsidiary of another corporation), (b) the Company sells, or agrees to sell, all or substantially all of its assets to any other person or entity, (c) the Company is dissolved, (d) any third person or entity (other than Apollo Advisors, L.P., The Blackstone Group L.P., or a trustee or committee of any qualified employee benefit plan of the Company) together with its Affiliates shall become (by tender offer or otherwise), directly or indirectly, the Beneficial Owner of at least 30% of the Voting Stock of the Company, or (e) the individuals who constitute the Board of Directors of the Company as of April 11, 2007 (“Incumbent Board”) shall cease for any reason to constitute at least a majority of the Board of Directors; provided, that any person becoming a director whose election or nomination for election was approved by a majority of the members of the Incumbent Board shall be considered, for the purposes of this Agreement, a member of the Incumbent Board.

           Change in Control Date is defined in Section 6.5.

 


 

           Change in Control Payment is defined in Section 6.6(a).

           Code means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated by the Internal Revenue Service thereunder.

           Common Stock means the Company’s common stock, par value $.01 per share.

           Company means Allied Waste Industries, Inc., a Delaware corporation.

           Compensation Plans is defined in Section 4.6.

           Confidential Information is defined in Section 7.2.

           Continuing Obligations is defined in Section 3.

           Date of Termination means the earliest to occur of (a) the date of the Executive’s death, or (b) the date specified in the Notice of Termination, in accordance with Section 5.8.

           Disability means an illness or other disability which prevents the Executive from discharging the essential functions of his responsibilities under this Agreement, with or without a reasonable accommodation, for a period of 180 consecutive calendar days, or an aggregate of 180 calendar days in any calendar year, during the Term, all as determined in good faith by the Board of Directors (or a committee thereof).

           Effective Date means the effective date of this amended and restated Executive Employment Agreement, which is January 1, 2008, except as may otherwise be provided herein.

           Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Securities and Exchange Commission thereunder.

           Executive means Timothy R. Donovan (or, as applicable, his heirs).

           Good Reason is defined in Section 5.5.

           Gross-Up Payment is defined in Section 6.6(c).

           Notice of Termination is defined in Section 5.8.

           Paid Leave is defined in Section 4.3.

           Retirement is defined in Section 5.7.

           Safe Harbor Amount is defined in Section 6.6(a).

           Targeted Annual Incentive Compensation is defined in Section 4.2.

           Term is defined in Section 3.

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           Termination of Employment means the Executive’s separation from service with the Company (whether initiated by the Executive or by the Company), determined in accordance with Section 409A of the Code and Treasury Regulations thereunder (“Section 409A”).

           Unrestricted Payments means those payments to which the Executive is entitled under Sections 6.2(a)(1), 6.3(a)(1), 6.4(a), and 6.5(a)(1) of this Agreement.

           Voting Stock means all outstanding shares of capital stock of the Company entitled to vote generally in an election of directors; provided, however, that if the Company has shares of Voting Stock entitled to more or less than one (1) vote per share, each reference to a proportion of the issued and outstanding shares of Voting Stock shall be deemed to refer to the proportion of the aggregate votes entitled to be cast by the issued and outstanding shares of Voting Stock.

           Welfare Plans is defined in Section 4.7.

           Without Cause is defined in Section 5.4.

          In addition, throughout this Agreement, the parties have defined certain words and intend for those definitions to apply whenever the parties have used a defined word in this Agreement. One of the defined terms is “Company” which means Allied Waste Industries, Inc. However, the parties expect that some or all of the Company’s obligations under this Agreement will be fulfilled through its parent, subsidiary, related, or successor companies or businesses (which will be called “Affiliates” in this Agreement). Accordingly, Executive acknowledges that the discharge of any obligation of the Company under this Agreement, which may be through the acts of one or more Affiliates, discharges any such obligation of the Company. Moreover, the obligations Executive assumes under this Agreement will be owed to the Company and to its Affiliates. Accordingly, the parties expressly intend for the Affiliates to be third-party beneficiaries of the promises made and obligations assumed by Executive in this Agreement. If, in connection with a Change in Control (the “Initial Change of Control”), the Company survives as a subsidiary of another corporation and the other corporation assumes this Agreement, the term Company for purposes of this Agreement shall mean such other entity; provided, however, that (i) the provisions and rights of the Executive with respect to the Initial Change of Control under this Agreement shall apply as such provisions and terms exist immediately prior to such Initial Change in Control notwithstanding the assumption of the Agreement by such entity, (ii) any subsequent Change in Control will be determined based upon changes to such entity, and (iii) years of service as used in this Agreement shall include years of employment with the Company prior to the Change in Control and such entity after the Change in Control.

     2.  General Duties of Company and Executive .

          2.1. The Company will employ the Executive as its Executive Vice President, General Counsel, and Corporate Secretary. The Executive’s authority, duties and responsibilities shall be those assigned by the Chairman of the Company’s Board of Directors and Chief Executive Officer (or such other persons as may be specified by the Board of Directors, from time to time), and agreed to by the Executive. The Executive shall devote reasonable time and attention during normal business hours to the affairs of the Company and use his best efforts to

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perform faithfully and efficiently his duties and responsibilities. The Executive may (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (c) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s duties and responsibilities.

          2.2. The Executive agrees and acknowledges that he owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of the Company and to do no act and to make no statement, oral or written, which would injure the Company’s business, its interests or its reputation, except as may be required by applicable law, regulation, or code of professional responsibility. The Executive also agrees that he shall not knowingly become involved in a conflict of interest with the Company and, upon discovery of any such conflict, that he will inform the Company of the conflict and will not allow the conflict to continue.

          2.3. The Executive agrees to comply at all times with all applicable policies, rules and regulations of the Company, including but not limited to, the Company’s Code of Ethics and the Company’s policies regarding trading in Common Stock, stock ownership and retention guidelines, and reimbursement of expenses, as each is in effect from time to time.

     3.  Term . The “Term” of this Agreement shall continue indefinitely until either party terminates this Agreement pursuant to Section 5 of this Agreement, in which case the Term shall end on the Date of Termination specified in the Notice of Termination (or on the Executive’s date of death if termination is due to the Executive’s death). Neither the termination of this Agreement nor the consequent end of the Term shall affect the Company’s obligations under Section 6 of this Agreement or the Executive’s obligations under Sections 7 through 10 of this Agreement (or under Section 2.3 with respect to the Company’s policies regarding trading in Common Stock) (collectively, “Continuing Obligations”).

     4.  Compensation and Benefits.

          4.1. Base Salary . As compensation for services to the Company during the Term, the Company shall pay to the Executive until the Date of Termination a base salary at the annual rate of Five Hundred Thousand Dollars ($500,000.00), or such higher rate as may be determined from time to time in the discretion of the Board of Directors (or a committee thereof) (“Base Salary”). Base Salary shall be payable in equal bi-weekly installments or in accordance with the Company’s established policy, subject only to such payroll and withholding deductions as may be required by law and other deductions that are either applied generally to employees of the Company for insurance and other employee benefit plans or which are authorized by the Executive. For all purposes under this Agreement, the Executive’s Base Salary shall include any portion thereof which is deferred under any nonqualified plan or arrangement.

          4.2. Annual Incentive Compensation . In addition to Base Salary, the Executive shall be eligible to be awarded, for each fiscal year during the Term until the Date of Termination, annual cash incentive compensation (either pursuant to an incentive plan or program of the Company or otherwise) (“Annual Incentive Compensation”) in an amount to be determined by the Board of Directors (or a committee thereof) in its sole discretion and specified as a percentage of the Executive’s Base Salary (“Targeted Annual Incentive Compensation”).

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The Executive’s actual Annual Incentive Compensation may range from zero percent (0%) to the maximum percentage of the Executive’s Base Salary permitted by the terms of the Company’s annual incentive compensation plan(s), as amended from time to time. All such Annual Incentive Compensation shall be payable at a time to be determined by the Board of Directors (or a committee thereof) in its sole discretion. For all purposes under this Agreement, the Executive’s Annual Incentive Compensation shall include any portion thereof which is deferred under any nonqualified plan or arrangement.

          4.3. Paid Leave . Commencing on the Effective Date and continuing until the Date of Termination, for each full calendar year in which the Executive is employed under this Agreement, the Executive shall be entitled to twenty (20) days’ paid leave (“Paid Leave”) during the year without any reduction in the Compensation to which he is entitled under this Article 4. For any partial calendar year during which the Executive is employed under this Agreement, he will be entitled to a prorated amount of this Paid Leave, based on the number of weeks worked in the calendar year and pursuant to the Company’s then current paid leave policy. Because the Company intends for this Paid Leave to be used by the Executive, so that he benefits from having time away from his customary employment duties, the Executive must use the Paid Leave provided under this Section 4.3, for each calendar year, during the relevant calendar year for which it is provided. If the Executive does not use all of the Paid Leave to which he is entitled in any calendar year, he will forfeit this benefit at the end of that calendar year and shall have no right to take more than twenty (20) days of Paid Leave in the following or any subsequent calendar year or to be otherwise compensated for not having utilized the Paid Leave.

          4.4. Automobile Allowance . Commencing on the Effective Date and continuing until the Date of Termination, the Executive shall receive an automobile allowance of Six Hundred Dollars ($600.00) per month (“Automobile Allowance”). The Board of Directors (or a committee thereof), in its discretion, may increase the Automobile Allowance based upon relevant circumstances.

          4.5. Club Membership Dues . Commencing on the Effective Date and continuing until the Date of Termination, the Executive shall receive an allowance for monthly membership dues (i.e., the regular membership fee, and not incidental or ancillary charges such as food, beverages, rentals, coaching, training, supplies, therapy, spa, etc.) for a club or organization of Executive’s choice in the amount of Six Hundred Dollars ($600.00) per month (“Club Allowance”). The Executive will not be entitled to this Club Allowance if the Company determines that membership in the relevant club or organization would violate the letter or spirit of any Company policy.

          4.6. Incentive, Savings, Retirement and Stock Plans . The Executive shall be entitled to participate in and be eligible to receive benefits under all executive incentive, savings, retirement, deferral, and stock (including any stock option, restricted stock, restricted stock units, phantom stock and other stock rights and interests, including derivative interests) plans and programs currently maintained or hereinafter established by the Company for the benefit of its similarly-situated executive officers (collectively “Compensation Plans”). The Executive’s participation in the Compensation Plans shall be governed by the terms and conditions of those plans. Subject to the terms of the Company’s stock ownership and retention guidelines, as adopted and/or amended by the Board of Directors (or a committee thereof) from time to time,

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the Executive is expected to retain fifty percent (50%) of the shares received upon the exercise of any options or the vesting of any restricted stock (after netting such shares for the purpose of satisfying the Executive’s income and payroll tax obligations incurred as the result of any exercise or vesting event), until such time as he has accumulated stock with a value of at least two and one-half (2.5) times the Executive’s Base Salary. For purposes of the preceding sentence, “Base Salary” shall be during each calendar year during the Term, the Executive’s Base Salary as of the first day of such calendar year.

          4.7. Welfare Plans . The Executive shall be eligible to participate in and shall receive all benefits under each welfare benefit plan of the Company currently maintained or subsequently established by the Company for the benefit of its similarly-situated executive officers. Such welfare benefit plans may include medical, dental, vision, disability, group life, accidental death and travel accident insurance plans and programs (collectively “Welfare Plans”). The Executive’s participation in the Welfare Plans shall be governed by the terms and conditions of those plans.

          4.8. Reimbursement of Expenses . The Executive may from time to time during the Term incur various business expenses customarily incurred by persons holding positions of like responsibility, including, without limitation, travel, entertainment and similar expenses incurred for the benefit of the Company. The Company shall reimburse the Executive for all legitimate expenses incurred on the Company’s behalf, upon the Company’s receipt of proper documentation for such expenses, provided that reimbursement of the expenses would not violate the letter or spirit of any Company policy regarding the reimbursement of such expenses.

          4.9 Indemnification and Insurance. At all times during the term of this Agreement, and for such additional periods as are provided for in this Agreement, the Executive shall be covered under the Company’s directors’ and officers’ liability insurance, if any, and under a separate Indemnity Agreement with the Company.

     5.  Termination . This Agreement may be terminated as follows:

          5.1. Death . This Agreement shall terminate automatically upon the death of the Executive.

          5.2. Disability . The Company may terminate this Agreement, upon written notice to the Executive delivered in accordance with Sections 5.8 and 11.1, upon the Disability of the Executive.

          5.3. Cause . The Company may terminate this Agreement, upon written notice to the Executive delivered in accordance with Sections 5.8 and 11.1, for Cause. For purposes of this Agreement:

               (a) For any determination of Cause prior to a Change in Control, “Cause” means (1) the Executive is convicted of, or pleads guilty or nolo contendere to, (i) a felony, or (ii) any other crime involving the Company, (2) the Board of Directors makes a reasonable, good faith determination that the Executive has breached any material term of this Agreement, (3) the Board of Directors makes a reasonable, good faith determination that the Executive has violated any applicable policies, rules, or regulations of the Company, including

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but not limited to, the Company’s Code of Ethics and the Company’s policies regarding trading of Common Stock and reimbursement of expenses, (4) the Board of Directors determines that the Executive engaged in (i) willful or deliberate conduct, the result of which exposes the Company to actual or potential financial or other injury, except as required by applicable law, regulation, or code of professional responsibility, (ii) fraud, (iii) misappropriation of tangible or intangible property or funds of the Company, or (iv) embezzlement of Company funds, (5) the Board of Directors determines that the Executive (i) willfully or deliberately failed or refused to perform his assigned duties, except where the performance of such duties would result in the Executive’s violation of applicable law, regulation, or code of professional responsibility, and (ii) failed to cure his nonperformance within thirty (30) days of receipt of a written notice from the Board of Directors setting forth in reasonable detail the facts and circumstances of his nonperformance, or (6) the Executive breached any statutory or common law duty of loyalty to the Company. For purposes of this Section 5.3(a), a determination by the Board of Directors is evidenced by a resolution, duly adopted by at least two-thirds (2/3) of the entire membership of the Board of Directors at a meeting called and held for the purpose of considering the termination of the Executive’s employment for Cause, at which the Executive and his representative have the right to attend and address the Board of Directors, finding that, in the good faith belief of the Board of Directors the Executive engaged in conduct described in this Section 5.3(a) and specifying the particulars thereof in reasonable detail. No determination by the Board of Directors will prevent the Executive from contesting such determination through arbitration, as provided in Section 11.9 of the Agreement.

               (b) For any determination of Cause on or after a Change in Control (including with respect to any events which may have occurred prior to the Change in Control), “Cause” means (1) the Executive is convicted of, or pleads guilty or nolo contendere to, (i) a felony, or (ii) any other crime involving the Company, (2) the Executive has breached any material term of this Agreement, (3) the Executive has violated the Company’s Code of Ethics and the Company’s policies regarding trading of Common Stock and reimbursement of expenses, (4) the Executive engaged in (i) willful or deliberate conduct, the result of which exposes the Company to actual or potential financial or other injury, except as required by applicable law, regulation or code of professional responsibility, (ii) fraud, (iii) misappropriation of tangible or intangible property or funds of the Company, or (iv) embezzlement of Company funds, or (5) the Executive (i) willfully or deliberately failed or refused to perform his assigned duties, except where the performance of such duties would result in the Executive’s violation of applicable law, regulation or code of professional responsibility, and (ii) failed to cure his nonperformance within thirty (30) days of receipt of a written notice from the Board of Directors setting forth in reasonable detail the facts and circumstances of his nonperformance. For purposes of this Section 5.3(b), Cause shall not exist unless the Board of Directors, as evidenced by a resolution, duly adopted by at least two-thirds (2/3) of the entire membership of the Board of Directors at a meeting called and held for the purpose of considering the termination of the Executive’s employment for Cause, at which the Executive and his representative have the right to attend and address the Board, determines that the Executive engaged in conduct described in this Section 5.3(b) and specifying the particulars thereof in reasonable detail. No determination by the Board of Directors will prevent the Executive from contesting such determination through arbitration, as provided in Section 11.9 of the Agreement.

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          5.4. Without Cause . The Company may terminate this Agreement Without Cause, upon written notice to the Executive delivered in accordance with Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will be deemed to have been terminated “Without Cause” if the Executive is terminated by the Company for any reason other than Cause, Disability, or death.

          5.5. Good Reason . The Executive may terminate this Agreement for Good Reason, upon written notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this Agreement, “Good Reason” means (a) the assignment to the Executive of any duties that are materially inconsistent with the Executive’s duties or responsibilities as contemplated in this Agreement, including any duties that would result in the Executive’s violation of applicable law, regulation, or code of professional responsibility, (b) any other action by the Company which results in a material diminishment in the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities (provided, however, that a temporary diminishment, whether material or not, due to the Executive’s illness or injury, will not constitute grounds for a termination for Good Reason by the Executive), (c) any material breach by the Company of any of the provisions of this Agreement, (d) requiring the Executive to relocate permanently to any office or location, except in the Phoenix-Scottsdale metropolitan area, (e) any material reduction, or attempted material reduction, at any time during the Term, of the Base Salary or in the aggregate of the compensation or benefits described in Article 4 of this Agreement (provided, however, that any change in the targeted percentage for purposes of determining the Executive’s Annual Incentive Compensation, any change in the Company’s reimbursement policies, or any change in any Compensation Plans or Welfare Plans, which affects a majority of the similarly situated executive officers covered by those policies or plans, shall not be considered “Good Reason”), or (f) the Company’s failure to comply, or the Company’s preventing or impeding the Executive from compliance, with any legal obligation which would subject the Executive to any civil or criminal liability, or which would result in the Executive’s violation of applicable law, regulation, or code of professional responsibility.

          5.6. Without Good Reason . The Executive may terminate this Agreement Without Good Reason, upon written notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this Agreement, the Executive will be deemed to have terminated “Without Good Reason” if the Executive terminates this Agreement for any reason other than Good Reason; however, a termination of this Agreement due to the Executive’s death or Retirement is not a termination “Without Good Reason”.

          5.7. Retirement. The Executive may terminate this Agreement upon Retirement, upon written notice to the Company delivered in accordance with Sections 5.8 and 11.1. For purposes of this Agreement, “Retirement” means a voluntary Termination of Employment by the Executive which occurs on or after the date on which the Executive completes ten (10) years of service. Years of service means all twelve (12) consecutive month periods of employment with the Company, beginning with the Executive’s initial date of employment with the Company. An involuntary Termination of Employment (i.e., a Termination of Employment initiated by the Company for any reason) will not be considered Retirement even if the Executive has completed ten (10) years of service at the time the involuntary Termination of Employment occurs.

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          5.8. Notice of Termination . Any termination of this Agreement by the Company for Cause, Without Cause or as a result of the Executive’s Disability, or by the Executive for Good Reason or Without Good Reason or upon Retirement, shall be communicated by a Notice of Termination to the other party. A “Notice of Termination” means a written notice which (a) indicates the specific termination provision in this Agreement relied upon and (b) if the termination is by the Company for Cause or by the Executive for Good Reason, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. The Notice of Termination must specify the Date of Termination. In the case of a termination by the Company for Cause or due to the Executive’s Disability or by the Executive for Good Reason or due to Retirement, the Date of Termination may be as early as the date notice is given but no later than thirty (30) calendar days after notice is given, unless otherwise agreed to in writing by both parties. In the case of a termination by the Company Without Cause or by the Executive Without Good Reason, the Date of Termination may be as early as fourteen (14) calendar days after notice is given but no later than sixty (60) calendar days after notice is given, unless otherwise agreed to by the parties in writing. The Notice of Termination shall also conform with the provisions of Section 11.1.

     6.  Obligations of Company Upon Termination .

          6.1. Cause, Without Good Reason . If this Agreement is terminated either by the Company for Cause or by the Executive Without Good Reason and the Executive has a Termination of Employment, the Company shall pay to the Executive, in a lump sum cash payment within thirty (30) days after the Date of Termination, the aggregate of (a) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of Termination) owed as of the Date of Termination, and (b) any accrued but unpaid Paid Leave as of the Date of Termination. The Company also shall pay or reimburse to the Executive in a lump sum cash payment within ninety (90) days after the Date of Termination any costs and expenses (and moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not terminated, provided that the Executive provides proper documentation of such costs and expenses within thirty (30) days after the Date of Termination.

          All other obligations of the Company and rights of the Executive hereunder (except those described in Section 6.8 of this Agreement) shall terminate effective as of the Date of Termination; provided, however, that the Executive’s rights under any Compensation Plan or Welfare Plan shall be governed by the terms and provisions of each such plan and are not necessarily severed on the Date of Termination.

          6.2. Death or Disability . If this Agreement is terminated as a result of the Executive’s death or Disability and the Executive has a Termination of Employment:

               (a) The Company shall pay to the Executive (or to his estate, in the event the Executive is deceased) the following amounts:

               (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of Termination) owed as of the Date of Termination, any unpaid

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portion of the Annual Incentive Compensation previously awarded to the Executive, and any accrued but unpaid Paid Leave as of the Date of Termination, in a lump sum cash payment within thirty (30) days after the Date of Termination; and

               (2) an amount equal to two (2) times the sum of the Executive’s Base Salary (as in effect on the Date of Termination) plus the Executive’s Target Annual Incentive Compensation for the fiscal year during which the Date of Termination occurs. If the termination is due to death, this amount will be paid in substantially equal bi-weekly installments over a two (2) year period following the Executive’s Date of Termination. If the termination is due to Disability, this amount will be paid in substantially equal bi-weekly installments beginning as of the first payroll date immediately following the six (6) month anniversary of the Date of Termination and continuing until the first payroll date immediately following the two (2) year anniversary of the Date of Termination; provided, however, that the first payment shall include the amount that would have been paid prior to the actual first payment date had the first payment date been the first payroll date immediately following the Date of Termination. The Company may, to the extent feasible, purchase insurance to cover all or any part of the obligation contemplated in this paragraph, and the Executive agrees to submit to a physical examination and otherwise cooperate with the Company to facilitate the procurement of such insurance.

               (b) The Company shall pay or reimburse to the Executive in a lump sum cash payment within ninety (90) days after the Date of Termination any costs and expenses (including moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not terminated, provided that the Executive (or his estate) provides proper documentation of such costs and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the Executive and/or the Executive’s spouse and dependents, equal to that which would have been provided to him under Section 4.7 if the Executive’s employment had not terminated until the earlier of (1) the date the Executive becomes eligible for any comparable medical, dental, or vision coverage provided by any other employer, (2) the date the Executive becomes eligible for Medicare or any similar government-sponsored or provided health care program (whether or not such coverage is equivalent to that provided by the Company), or (3) the fifth anniversary of the Executive’s Date of Termination; provided that (i) the benefits provided during the Executive’s taxable year may not affect the benefits provided to the Executive in any other taxable year (except as permitted under Section 409A), (ii) reimbursement of any eligible expenses must be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and (iii) the right to such continued coverage is not subject to liquidation or exchange for another benefit.

               (d) Whenever compensation is payable to the Executive under this Agreement during a period in which he is partially or totally disabled, and such disability would (except for the provisions of this Agreement) entitle the Executive to disability income or salary continuation payments from the Company according to the terms of any plan or program

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presently maintained or hereafter established by the Company, the disability income or salary continuation paid to the Executive pursuant to any such plan or program shall be considered a portion of (and not in addition to) the payment to be made to the Executive pursuant to this Section 6.2. If disability income is payable directly to the Executive by an insurance company under the terms of an insurance policy paid for by the Company, the amounts paid to the Executive by such insurance company shall be considered a portion of the payment (and not in addition to the payment) to be made to the Executive pursuant to this Section 6.2.

               (e) The Executive (or the Executive’s estate, as the case may be) shall continue to vest and, if applicable, continue to be permitted to exercise, all of the rights and interests awarded to the Executive under the Company’s stock plans, as if the Executive were still employed by the Company, for a period of two (2) years following the Date of Termination (or, if less, for the remainder of the stated terms of the rights or interests).

               (f) The Executive (or the Executive’s estate, as the case may be) shall continue to be covered under the Company’s directors’ and officers’ liability insurance, if any, and under his separate Indemnity Agreement with the Company, as if the Executive’s employment had not terminated, for a period of ten (10) years following his Date of Termination (or, in the case of the Indemnity Agreement, for such longer term as may be provided for in the Indemnity Agreement).

               (g) All other obligations of the Company and rights of the Executive hereunder (except those described in Section 6.8 of this Agreement) shall terminate effective as of the Date of Termination; provided, however, that except as otherwise specifically modified by the terms of this Agreement the Executive’s rights under the Compensation Plans and Welfare Plans shall be governed by the terms and provisions of those Plans and are not necessarily severed on the Date of Termination.

          6.3. Good Reason; Without Cause . If this Agreement is terminated either by the Executive for Good Reason or by the Company Without Cause (other than in connection with a Change in Control as described in Section 6.5) and the Executive has a Termination of Employment:

               (a) The Company shall pay to the Executive the following amounts:

               (1) any unpaid portion of the Executive’s Base Salary (as in effect on the Date of Termination) owed as of the Date of Termination, any unpaid portion of the Annual Incentive Compensation previously awarded to the Executive, and any accrued but unpaid Paid Leave as of the Date of Termination, in a lump sum cash payment within thirty (30) days after the Date of Termination; and

               (2) an amount equal to two (2) times the sum of the Executive’s Base Salary (as in effect on the Date of Termination) plus the Executive’s Target Annual Incentive Compensation for the fiscal year during which the Date of Termination occurs, in substantially equal bi-weekly installments beginning as of the first payroll date immediately following the six (6) month anniversary of the Date of Termination and continuing until the first payroll date immediately following the two (2)

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year anniversary of the Date of Termination; provided, however, that the first payment shall include the amount that would have been paid prior to the actual first payment date had the first payment date been the first payroll date immediately following the Date of Termination.

               (b) The Company shall pay or reimburse to the Executive in a lump sum cash payment within ninety (90) days after the Date of Termination any costs and expenses (including moving and relocation expenses, if otherwise agreed to by the Company in writing) paid or incurred by the Executive which would have been payable under Section 4.8 of this Agreement if the Executive’s employment had not terminated, provided that the Executive (or his estate) provides proper documentation of such costs and expenses within thirty (30) days after the Date of Termination.

               (c) The Company shall continue providing medical, dental, and/or vision coverage to the Executive and/or the Executive’s spouse and dependents, equal to that which would have been provided to the Executive under Section 4.7 if the Executive’s employment had not terminated, until the earlier of (1) the date the Executive becomes eligible for any comparable medical, dental, or vision coverage provided by any other employer, (2) the date the Executive becomes eligible for Medicare or any


 
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