Exhibit 10.2
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT
AGREEMENT (the “
Agreement ”), is entered into as of October 28,
2008 (the “ Effective Date ”) by and between
John W. O’Neil, a resident of the State of Massachusetts
(“ Executive ”), and Heeling Sports Limited, a
Texas limited partnership (“ Company ”, and
together with Executive, the “ Parties ” and
each a “ Party ”).
WHEREAS , Company is engaged in the commercial
enterprise of selling wheeled footwear, other athletic footwear,
and related products and services (the “ Business
”);
WHEREAS , Company recognizes that Executive’s
substantial skills and expertise will be useful to the Business and
desires to provide for the employment of Executive on the terms and
conditions provided in this Agreement;
WHEREAS , Executive is willing to commit to serve
Company in the capacity and on the terms and conditions provided in
this Agreement; and
WHEREAS , in order to effect the foregoing, Company and
Executive wish to enter into an employment agreement on the terms
and conditions set forth below;
NOW, THEREFORE
, in consideration of the premises
and the mutual promises and agreements contained herein, the
Parties, intending to be legally bound, hereby agree as
follows:
1.
Scope of
Employment .
1.1
Employment . Subject to the terms and
conditions set forth herein, Company agrees to employ Executive
during the Employment Term (as defined below), and Executive hereby
commits to accept such employment as set forth in
Section 4.1 . Executive will hold the office of
“Vice President of International Sales” (“ VP
of International Sales ”) during the Employment Term, and
will perform the services described in Section 3 (the
“ Services ”) as assigned to Executive by the
Board of Directors (the “ Board ”) of
Heelys, Inc., a Delaware corporation (“ Parent
”), its designee, the Chief Executive Officer of Parent
(“ CEO ”), or the CEO’s
designee.
1.2
Place of Performance . Executive will perform the
Services based out of an office in Belgium, but Executive will be
required to travel as reasonably required for performance of the
Services.
2.
Representations, Warranties, Covenants, and Acknowledgements
. Executive hereby
represents, warrants, covenants, and acknowledges to Company as
follows:
2.1
No Conflict or Breach . The execution, delivery, and
performance of this Agreement by Executive does not and will not
conflict with, breach, violate, or cause a default under any
contract, agreement, instrument, order, judgment, or decree by
which Executive is bound.
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2.2
Disclosed Previous Agreements . As of the Effective Date,
Executive has not violated any lawful obligations to any previous
employer. Executive acknowledges Company’s instructions not
to breach any such lawful obligations.
2.3
No Use of Previous Employer Information .
During the
Employment Term and thereafter, Executive will not use or disclose
to Company or Parent, or to any affiliate, subsidiary, investor,
owner, shareholder, franchisee, franchisor or other related entity
(each a “ Related Entity ”) of Company, or to
any other Person (as defined below), any confidential or
proprietary information or trade secrets of any of
Executive’s previous employer(s) or any Related Entity
of such employer(s), and will not bring onto Company’s
premises, or access, such confidential or proprietary information
or trade secrets, unless consented to in writing by such
employer(s) or Related Entity and then only with the prior
written authorization of Company. For purposes of this Agreement,
“ Person ” means an individual, a partnership, a
limited liability company, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization, and/or a governmental entity or any department,
agency, or political subdivision thereof.
2.4
Understands Agreement . Executive acknowledges that
Executive has read this Agreement before signing it, has had the
opportunity to consult with and be advised by counsel about it, and
fully understands its purposes, terms, and provisions, which
Executive hereby expressly acknowledges to be reasonable in all
respects.
2.5
Material Breach . Executive acknowledges that
any breach of Section 2 (including subparts) by
Executive will constitute a material breach of this
Agreement.
3.
Duties and
Responsibilities .
3.1
VP of International Sales . During the Employment Term,
Executive’s duties and responsibilities will be those
typically performed by a VP of International Sales of a nationwide
commercial enterprise in the Business, and otherwise as reasonably
and lawfully directed by the Board, its designee, the CEO or the
CEO’s designee. Company may adjust the duties and
responsibilities of the Executive notwithstanding the specific
title set forth in Section 1.1, based upon Company’s
needs from time to time. Executive will devote substantially all of
Executive’s business time, energy, and skill to performing
the Services and will perform all obligations hereunder diligently,
faithfully, and to the best of Executive’s abilities, except
during times of vacation, illness, incapacity, or other approved
leave. It shall not be a violation of this Agreement for the
Executive to serve on industry, civic, community, charitable,
religious, educational or for-profit boards so long as such service
is with the approval of the Board or the CEO and does not
unreasonably interfere with the Executive’s performance of
his duties hereunder. Executive shall strictly adhere to and obey
all applicable policies and practices now in effect or subsequently
promulgated or revised governing the conduct of employees of
Company. In the event of conflict or inconsistency between this
Agreement and the employee policies and written manuals of Company,
the terms of this Agreement shall govern.
3.2
Board . During the Employment Term,
Executive shall serve, if elected or appointed, as an officer of
any subsidiary or affiliate of Parent.
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4.
Employment Term;
Termination .
4.1
Employment Term . Subject to the terms and
conditions of this Agreement, Executive’s employment under
this Agreement commences on the Effective Date, and will continue
through and until December 31, 2009 (the “ Employment
Term ”), subject to prior termination pursuant to the
provisions of Section 4.2 . The Employment Term will
automatically renew for a period of one (1) year (a “
Renewal Term ”) beginning on January 1, 2010, and
thereafter on each anniversary of such date, without the need for
any action by either Party, unless Executive’s employment is
terminated in accordance with the provisions of
Section 4.2 . For the purposes of this Agreement:
(a) the term “ Employment Term ” includes
any Renewal Term that has occurred or that is in effect, as
applicable according to the provisions of this Agreement; and
(b) the last date of Executive’s employment with Company
is referred to herein as the “ Termination Date
.”
4.2
Termination
.
(a)
Death . This Agreement will automatically and immediately
terminate upon the death of Executive, and Executive (e.g.,
Executive’s heirs or estate) will be entitled to limited
Severance Benefits (as defined below).
(b)
Disability . This Agreement may be terminated by either
Party upon written notice to the other in the event Executive
becomes unavailable to work due to a Disability (as defined in this
Section). As used herein, “ Disability ” means
Executive’s becoming incapacitated by accident, sickness, or
other circumstances that, in the reasonable judgment of Company,
renders or is expected to render Executive mentally or physically
incapable of performing the essential duties and services required
hereunder, where (i) such incapacity has been determined to
exist by the disability insurance carrier for Company, or
(ii) Company has determined, based on competent professional
advice, that such incapacity has continued or will continue for at
least ninety (90) consecutive calendar days, or 180 non-consecutive
calendar days, within a calendar year. If Executive’s
employment is terminated due to a Disability, Executive will
not be entitled to any Severance Benefits. In conjunction
with determining mental and/or physical disability for purposes of
this Agreement, the Executive hereby consents to (x) any
examinations that the Board or Compensation Committee of Parent
deems relevant to a determination of whether the Executive is
mentally and/or physically disabled, or are required by
Company’s designated physician, (y) furnish such medical
information as may be reasonably requested, and (z) waive any
applicable privilege that may arise because of such
examination.
(c)
Cause . In addition to any other rights or remedies
available to Company during the Employment Term, in its sole
discretion Company may terminate Executive’s employment for
Cause (as defined in this Section) effective immediately upon
delivery of written notice to Executive, and Executive will
not be entitled to any Severance Benefits. As used herein,
“ Cause ” means any of the following:
(i) Company’s determination that Executive has
materially neglected, failed, or refused to render the Services or
perform any other material duties or obligations under this
Agreement; (ii) Company’s determination that Executive
has otherwise materially violated any provision of this Agreement,
including, without limitation, violation of Company policies
regarding drugs and alcohol, discrimination, harassment,
retaliation, honesty, confidentiality, and/or other employee
misconduct, whether
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now in effect or
subsequently promulgated or revised; (iii) Executive’s
conviction for, or entry of a plea of no contest with respect to,
any felony, crime of moral turpitude, or other crime that adversely
affects or (in Company’s reasonable judgment) may adversely
affect Company, the ability of Executive to provide the Services,
or any of the other Company Parties (as defined below);
(iv) any act or omission of Executive involving fraud, theft,
dishonesty, disloyalty, or illegality with respect to, or that
harms or embarrasses or (in Company’s reasonable judgment)
may harm or embarrass, Company or any of the other Company Parties;
or (v) any act or omission of Executive constituting the
knowing or intentional violation of applicable law with respect to,
or that harms or embarrasses or (in Company’s reasonable
judgment) may harm or embarrass, Company or any of the other
Company Parties; provided, however , that with respect to
clauses (i) and (ii) of this Section, if such breach or
violation is susceptible to cure, Company may not terminate
Executive’s employment for Cause unless Company provides
Executive with written notice specifying such breach or violation,
in reasonable detail, and Executive fails to cure or remedy such
breach or violation within fifteen (15) days after receipt of such
notice; provided further , that the Board of Company shall
have the sole discretion to determine whether such a breach or
violation is subject to cure, and if so, whether the Executive
successfully effected a cure following notice.
(d)
Good Reason . Executive may terminate employment with Good
Reason at any time upon notice to Company. For the purpose of this
Agreement, “ Good Reason ” means, in the absence
of Executive’s consent: (A) the material breach by
Company of any material compensation or material benefit obligation
to Executive under this Agreement; or (B) a material reduction
in Executive’s Base Salary within one (1) year following
a Change of Control (as defined below); or (C) a material
diminution in Executive’s job duties within one (1) year
following a Change of Control, provided, however , that Good
Reason shall only exist if the Company fails to correct or cure the
Good Reason condition within a period of forty-five (45) days,
after being provided with written notice (describing the Good
Reason condition in reasonable detail) by Executive within thirty
(30) days of the initial existence of the alleged Good Reason
condition. Should it be determined by Company, by a court of
competent jurisdiction, or by a duly authorized arbitrator that
Executive has resigned for Good Reason, Executive will be
entitled to the Severance Benefits provided in
Section 7.2(a) .
(i)
Change of Control . For the purpose of this Agreement,
“ Change of Control ” means the occurrence of
any of the following events: (w) any “person” (as
such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”)), other than one or more Permitted
Holders (as defined below), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Parent
representing twenty-five percent (25%) or more of the combined
voting power of the Parent’s then outstanding securities;
(x) any change or changes are made in the composition of the
Parent’s Board of Directors within a two-year period as a
result of which less than a majority of the directors are
(1) persons who were directors at the beginning of that
two-year period or (2) persons who were elected or nominated
for election as directors with the affirmative vote or consent of
at least a majority of the incumbent directors at the time of that
election or nomination, but not including any person whose election
or nomination was or is in connection with an actual or threatened
proxy contest regarding the election of the Parent’s
directors; (y) the Parent is merged or consolidated with
another
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corporation or
other entity (other than one or more Permitted Holders or any
entity controlled by one or more Permitted Holders) and, as a
result of the merger or consolidation, less than seventy-five
percent (75%) of the outstanding voting securities of the surviving
or resulting corporation or other entity, as the case may be, are
“beneficially owned” (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly,
immediately after the merger or consolidation by persons who or
which beneficially owned the outstanding voting securities of the
Parent immediately before the merger or consolidation; or
(z) the Parent transfers, sells or otherwise disposes of all
or substantially all of its assets to another corporation or other
entity which is not an affiliate of the Parent. “
Permitted Holders ” means Capital Southwest Venture
Corporation and its affiliates and Roger R. Adams and his
affiliates.
(e)
Discretionary .
(i)
By Executive Upon Notice . Executive may terminate his
employment effective as of the end of the Employment Term, by
providing Company with a written notice of non-renewal at least
ninety (90) days prior to the end of the Employment Term, in which
event Executive will not be entitled to any Severance
Benefits. If such a notice of non-renewal is given, then employment
pursuant to this Agreement will continue until the end of the
Employment Term; provided, however , that upon receipt of
such a notice, Company may instruct Executive in writing to cease
work pursuant to this Agreement, not to report to Company’s
offices, and/or not to attend any Company business functions,
ceasing Executive’s compensation and benefits pursuant to
this Agreement as of the effective date of such instructions, and
creating an earlier Termination Date than noticed by Executive,
without otherwise affecting the denial of Severance Benefits;
provided further , that Executive will receive compensation
and benefits pursuant to this Agreement for two (2) weeks
following the effective date of such instructions.
(ii)
By Executive Without Notice . Executive may terminate
employment at any time without Good Reason and without the formal
notice and completion of the Employment Term as provided in
Section 4.2(e)(i) , in which event Executive will
not be entitled to any Severance Benefits. In response to
such a termination by Executive, Company may instruct Executive to
cease work pursuant to this Agreement, not to report to
Company’s offices, and/or not to attend any Company business
functions, ceasing Executive’s compensation and benefits
pursuant to this Agreement as of the effective date of such
instructions, and creating an earlier Termination Date than planned
or noticed by Executive, without otherwise affecting the denial of
Severance Benefits.
(iii)
By Company Upon Notice . Company may terminate
Executive’s employment effective as of the end of the
Employment Term, by providing Executive with a written notice of
non-renewal at least ninety (90) days prior to the end of the
Employment Term, in which event Executive will not be
entitled to any Severance Benefits. If such a notice of non-renewal
is given, then employment pursuant to this Agreement will continue
until the end of the Employment Term, provided, however ,
that upon or after delivery of such a notice, Company may instruct
Executive to cease work
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pursuant to this
Agreement, not to report to Company’s offices, and/or not to
attend any Company business functions from the date of the notice
of such non-renewal through the end of the Employment Term, while
continuing to pay compensation and benefits to Executive pursuant
to this Agreement, without otherwise affecting the denial of
Severance Benefits.
(iv)
By Company Without Notice . Company may terminate
Executive’s employment at any time without Cause and without
the notice and completion of the Employment Term as required by
Section 4.2(e)(ii) , in which event Executive
will be entitled to the Severance Benefits provided in
Section 7.2(a) .
(f)
Change of Control . If Company terminates Executive’s
employment without Cause (with or without notice) within one
(1) year following a Change of Control, Executive will
be entitled to the Severance Benefits provided in
Section 7.2(b) . If Company effectuates such a
termination upon delivery of an advance written notice, Company may
instruct Executive to cease work pursuant to this Agreement, not to
report to Company’s offices, and/or not to attend any Company
business functions from the date of such notice through the through
the end of the notice period, while continuing to pay Executive
compensation and benefits pursuant to this Agreement during the
term of the notice period, without otherwise affecting the
Executive’s right to Severance Benefits.
5.
Salary, Bonus, and Business
Expenses .
5.1
Base Salary . During the Term, Company
will pay Executive, in United States Dollars, a base salary of ONE
HUNDRED FORTY-FIVE THOUSAND DOLLARS ($145,000) (the “Base
Salary”), payable in regular installments in accordance with
Company’s general payroll practices and subject to all
applicable deductions and withholdings as allowed by law.
Executive’s Base Salary for any partial year will be prorated
based upon the number of days elapsed in such year.
Executive’s pay may be changed by Company from time to time,
as Company deems appropriate in its sole discretion (but may not be
decreased without Executive’s consent), by way of an addendum
or other documentation, without otherwise affecting this Agreement
(except as may be set forth in such addendum or other
documentation). Notwithstanding any change in pay, the employment
of Executive will be construed as continuing under this Agreement,
without the necessity of Executive’s execution of any further
instrument.
5.2
Annual Bonus . During the Employment Term,
Executive will be eligible for an annual incentive bonus consisting
of up to 25% of annual Base Salary, as determined by the Board or
Compensation Committee of Parent in its sole discretion
(collectively, “ Annual Bonus ”). The
opportunity to earn an Annual Bonus and the amount of any Annual
Bonus will be determined in accordance with criteria (“
Bonus Criteria ”) established by the Board or
Compensation Committee of Parent. Executive acknowledges that
application of the Bonus Criteria will be discretionary, with
discretion resting with the Board or Compensation Committee of
Parent. Payment of the Annual Bonus, if any, will be made in a
single sum cash payment between January 1 and March 15 of
the calendar year following the calendar year in which the Annual
Bonus is earned. The amount and/or basis for earning the Annual
Bonus may be changed by Company from time to time, as Company deems
appropriate in its sole discretion, by
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way of an addendum or other
documentation, without otherwise affecting this Agreement (except
as may be set forth in such addendum or other documentation).
Notwithstanding any such change in the Annual Bonus, the employment
of Executive will be construed as continuing under this Agreement,
without the necessity of Executive’s execution of any further
instrument.
5.3
Business and Other Expenses . Subject to Executive’s
compliance with all applicable expense policies and procedures,
Company will reimburse Executive for all reasonable travel,
lodging, long distance telephone, and other business costs and
expenses reasonably incurred by Executive to render Services
pursuant to this Agreement. In addition, Executive shall be
entitled to receive those certain reimbursements and benefits to
the extent set forth on Annex A , which Company and
Executive shall update annually. Notwithstanding the preceding
sentences, or any provision in the applicable expense reimbursement
policy or procedure to the contrary, if an expense reimbursement
would constitute taxable income to Executive: (a) the
amount of expenses eligible for reimbursement during any calendar
year shall not affect the amount of expenses eligible for
reimbursement in any other calendar year; (b) the
reimbursement by Company of an eligible expense shall be made on or
before December 31 of the calendar year following the calendar
year in which the expense is incurred; and (c) the right to
reimbursement for expenses shall not be subject to liquidation or
exchange for another benefit.
5.4
Tax Withholding; Offsets . Company may deduct from any
compensation or other amount payable to Executive under this
Agreement, social security (FICA) taxes and all federal, state,
municipal, or other such taxes or governmental charges as may now
be in effect or that may hereafter be enacted or required.
Executive further authorizes Company to make deductions from
Executive’s compensation, including, without limitation,
Executive’s final paycheck, that are necessary for Company to
recover for property damages or property not returned by Executive,
and/or to recover overpayments, improper expenses, loans, and/or
advances paid to Executive.
6.
Benefits
.
6.1
Benefit Plans . During the Employment Term,
Executive will be entitled to participate in all employee benefit
plans and programs and to receive all benefits for which similarly
situated executives within Company generally are eligible under any
plan or program now in place or established later by Company, on
the same basis as such executives. Executive’s benefits may
be changed by Company from time to time, as Company deems
appropriate in its sole discretion, without otherwise affecting
this Agreement. Nothing in this Agreement will preclude Company
from amending or terminating any of the benefit plans or programs
applicable to Executive as long as such amendment or termination is
applicable to all similarly situated employees. Notwithstanding any
change in benefits, the employment of Executive will be construed
as continuing under this Agreement, without the necessity of
Executive’s execution of any further instrument.
6.2
Vacation . While employed by Company,
Executive will be entitled to three (3) weeks of paid
vacation per calendar year, to be accrued and taken in accordance
with Company’s normal vacation policy applicable to senior
executives. Executive’s vacation term for any partial year
will be prorated based upon the number of days of Executive’s
employment in such year. Accumulation and payment of vacation
benefits, and loss of unused vacation time,
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if any, shall be determined
and governed in accordance with Company policy and procedure.
Nothing in this Agreement will preclude Company from amending the
vacation policy applicable to Executive as long as such amendment
is applicable to all similarly situated employees. Notwithstanding
any change in vacation policy, the employment of Executive will be
construed as continuing under this Agreement, without the necessity
of Executive’s execution of any further
instrument.
7.
Rights On
Termination .
7.1
Without Severance Benefits . If Executive’s
employment under this Agreement is terminated by reason of
Executive’s death or Disability pursuant to Sections
4.2(a) or 4.2(b) , by Company for Cause pursuant
to Section 4.2(c) , by Executive without Good Reason
pursuant to Sections 4.2(e)(i) or 4.2(e)(ii) ,
or by Company for non-renewal pursuant to
Section 4.2(e)(iii) , then all further rights of
Executive (or as applicable, of Executive’s heirs or estate)
to employment and/or compensation and benefits from Company under
this Agreement shall cease as of the Termination Date, except that
Company will pay Executive (or as applicable, Executive’s
heirs or estate) the following:
(a)
any amount of unpaid Base Salary earned by Executive through the
Termination Date, paid in the same manner and on the same date as
would have occurred if Executive’s employment under this
Agreement had not ceased;
(b)
any amount of unpaid Annual Bonus or other bonus that Company in
its sole discretion may deem to be earned by Executive through the
Termination Date, paid in the same manner and on the same date as
would have occurred if Executive’s employment under this
Agreement had not ceased; provided, however , that no Annual
Bonus will be paid for any partial year of work (i.e. for any year
during which the Executive was not employed with Company throughout
that year, through and including the last day of the
year);
(c)
all unpaid reimbursable expenses due to Executive under this
Agreement as of the Termination Date, subject to Executive’s
compliance with Company’s expense reimbursement policies,
paid in accordance with the terms of Company’s policies,
practices, and procedures regarding reimbursable expenses, and
subject to the provisions in Section 5.3 as applicable
to reimbursements of expenses that constitute taxable income to
Executive;
(d)
all unpaid benefits that have been earned by or vested in Executive
under, and subject to the terms of, the employee benefit plans,
insurance policies, or arrangements of Company in which Executive
participated through the Termination Date, paid in accordance with
the terms of the employee benefit plans, insurance policies, or
arrangements under which such amounts are due to Executive;
and
(e)
an amount equal to all accrued and unused vacation pay, calculated
in accordance with Company’s vacation policies, practices,
and procedures, earned by Executive through the Termination Date,
paid in accordance with the terms of Company’s policies,
practices, and procedures regarding vacation pay; provided,
however , that such payment will be made in a single sum cash
payment within sixty (60) days after the Termination
Date.
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7.2
With Severance Benefits . Subject to the requirements
of Section 7.3 , if Executive’s
employment under this Agreement is terminated by reason of
Executive’s death pursuant to Section 4.2(a) , by
Executive for Good Reason pursuant to Section 4.2(d)
within ninety (90) days of the initial existence of the Good
Reason condition, by Company without Cause pursuant to
Section 4.2(e)(iv) , or by Company without Cause
following a Change of Control pursuant to
Section 4.2(f) , then all further rights of Executive
(or as applicable, of Executive’s heirs or estate) to
employment and/or compensation and benefits from Company under this
Agreement shall cease as of the Termination Date, except that
Company will pay Executive (or as applicable, Executive’s
heirs or estate) the following severance benefits (“
Severance Benefits ”), as applicable:
(a)
If Executive’s employment under this Agreement is terminated
by Executive for Good Reason pursuant to Section 4.2(d)
, or by Company without Cause pursuant to
Section 4.2(e)(iv) , then Company will not pay
any amounts pursuant to Sections 7.2(b) or 7.2(c) , but
will pay Executive (or as applicable, Executive’s
heirs or estate) the following severance benefits:
(i)
all payments and compensation pursuant to Section 7.1
;
(ii)
Executive’s Base Salary for a period of six (6) months,
plus an additional period equivalent to four (4) weeks for
every year of Executive’s employment with the Company in
excess of five (5) years, including any years of such
employment prior to the Effective Date, prorated for partial years
of such employment (collectively referred to as the “
Severance Period ”), as severance pay, capped at a
total combined maximum of seventy-eight (78) weeks of Base Salary
severance, based upon Executive’s Base Salary as of the
Termination Date, and paid in equal installments in accordance with
the normal payroll policies of Company, less applicable taxes,
commencing on the first regular payroll date of Company following
the Release Date (as defined below); provided, however
, that in the event Executive enters into business or
accepts employment with another employer following the Termination
Date, the severance payments pursuant to this Section shall be
reduced to the difference (if any) between Executive’s Base
Salary as of the Termination Date and Executive’s base
compensation with such new business or employer, paid in equal
installments during the remainder of the Severance Period;
and
(iii)
if Executive elects continuation coverage (with respect to
Executive’s coverage and/or any eligible dependent coverage)
(“ COBRA Continuation Coverage ”) under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”) with respect to Company’s group health
insurance plan, Executive will be responsible for payment of the
monthly cost of such COBRA Continuation Coverage; provided,
however , that commencing on the first regular payroll date of
Company following the Release Date, to the extent allowed by
applicable law, Company will reimburse Executive for the monthly
premium cost for all COBRA Continuation Coverage (including the
premium cost for the period between the Termination Date and the
Release Date) net of all premium cost (if any) Executive would have
paid had Executive’s employment under this Agreement
continued through the Severance Period, within thirty (30) days of
each payment of such cost by the Executive, provided further
,
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that such COBRA
Continuation Coverage reimbursement payments by Company shall
terminate upon the earlier of: (A) the expiration of the
maximum period required under COBRA for COBRA Continuation
Coverage, (B) the completion of the Severance Period, or
(C) the date Executive becomes eligible for benefits coverage
through a new business or employer.
(b)
If Executive’s employment under this Agreement is terminated
by Company without Cause following a Change of Control pursuant to
Section 4.2(f) , then Company will not pay any
amounts pursuant to Sections 7.2(a) or 7.2(c) , but
will pay Executive (or as applicable, Executive’s
heirs or estate) the following severance benefits:
(i)
all payments and compensation pursuant to Section 7.1
;
(ii)
Executive’s Base Salary for a period of one (1) year
plus a period equivalent to one (1) month for every year of
Executive’s service to Company in excess of five
(5) years as an employee and/or Director, including any years
of such service prior to the Effective Date, prorated for partial
years of such service, as severance pay, based upon
Executive’s Base Salary as of the Termination Date, and paid
in equal installments in accordance with the normal payroll
policies of Company, less applicable taxes, commencing on the first
regular payroll date of Company following the Release Date;
and
(iii)
if Executive elects COBRA Continuation Coverage (with respect to
Executive’s coverage and/or any eligible dependent coverage)
with respect to Company’s group health insurance plan,
Executive will be respons
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