Exhibit 10.40
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT
AGREEMENT (this “
Agreement ”) is made, entered into and effective as of
December 31, 2008 (the “ Effective Date ”)
by and among UNITED STATIONERS INC. , a Delaware corporation
(hereinafter, together with its successors, referred to as “
Holding ”), UNITED STATIONERS SUPPLY CO. , an
Illinois corporation (hereinafter, together with its successors,
referred to as the “ Company ”, and, together
with Holding, the “ Companies ”), and
Victoria J. Reich (hereinafter referred to as the “
Executive ”).
WHEREAS, the Companies and Executive
are parties to an Executive Employment Agreement dated
June 11, 2007 (the “Prior Agreement” ),
which the parties desire to amend and restate in its entirety as
set forth in this Agreement; and
WHEREAS, in October 2004, the
American Jobs Creation Act of 2004 (the “Act” )
was enacted, Section 885 of which Act added new provisions to
the Internal Revenue Code pertaining to deferred compensation and
for which the Treasury Department has issued final regulations and
guidance regarding the deferred compensation provisions of the Act
permitting service providers and service recipients a transition
period to modify existing deferred compensation arrangements to
bring them into compliance with the Act; and
WHEREAS, the parties agree that it
is in their mutual best interests to modify, amend and clarify the
terms and conditions of the Prior Agreement, as set forth in this
Agreement, with the full intention of complying with the Act so as
to avoid the additional taxes and penalties imposed under the Act;
and
WHEREAS, Executive is a key member
of the management of the Companies and is expected to devote
substantial skill and effort to the affairs of the Companies, and
the Companies desire to recognize the significant personal
contribution that Executive makes and is expected to continue to
make to further the best interests of the Companies and their
shareholders; and
WHEREAS, it is desirable and in the
best interests of the Companies and its shareholders to obtain the
benefits of Executive’s services and attention to the affairs
of the Companies, and to provide inducement for Executive
(1) to remain in the service of the Companies in the event of
any proposed or anticipated Change of Control and (2) to
remain in the service of the Companies in order to facilitate an
orderly transition in the event of a Change of Control;
and
WHEREAS, it is desirable and in the
best interests of the Companies and their shareholders that
Executives be in a position to make judgments and advise the
Companies with respect to any proposed Change of Control without
regard to the possibility that Executive’s employment may be
terminated without compensation in the event of a Change of
Control; and
WHEREAS, Executive will have access
to confidential, proprietary and trade secret information of the
Companies and their subsidiaries, and it is desirable and in the
best interests of the Companies and their shareholders to protect
confidential, proprietary and trade secret information of the
Companies and their subsidiaries, to prevent unfair competition by
former
1
executives of the Companies following separation
of their employment with the Company and to secure cooperation from
former executives with respect to matters related to their
employment with the Company; and
WHEREAS, it is desirable and in the
best interests of the Companies and their shareholders to obtain
commitments from Executive with respect to Executive’s
service with the Company, and to facilitate a smooth transition
upon separation from service for former executives,
NOW, THEREFORE
, in consideration of the premises
and the mutual covenants and agreements contained herein, the
parties agree as follows:
SECTION 1.
Definitions
.
(a)
As used in this Agreement, the
following terms have the respective meanings set forth
below:
“ Accrued
Benefits ” means (i) all salary earned or
accrued through the date the Executive’s employment is
terminated, (ii) reimbursement for any and all monies expended
by Executive in connection with the Executive’s employment
for reasonable and necessary out-of-pocket business expenses
incurred by the Executive in performance of services for the
Company through the date the Executive’s employment is
terminated, (iii) all accrued and unpaid annual incentive
compensation awards for the year immediately prior to the year in
which the Executive’s employment is terminated, and
(iv) all other payments and benefits payable on or after
termination of employment to which the Executive is entitled at the
date of termination under the terms of any applicable compensation
arrangement or benefit plan or program of the Company.
“Accrued Benefits” shall not include any entitlement to
severance pay or severance benefits under any Company severance
policy or plan generally applicable to the Company’s salaried
employees.
“ Affiliate
” shall have the meaning given such term in Rule 12b-2
of the Exchange Act.
“ Board ”
shall mean, so long as Holding owns all of the outstanding Voting
Securities (as hereinafter defined in the definition of Change of
Control) of the Company, the board of directors of Holding.
In all other cases, Board means the board of directors of the
Company.
“ Cause ”
shall mean (i) conviction of, or plea of nolo
contendere to, a felony (excluding motor vehicle
violations); (ii) theft or embezzlement, or attempted theft or
embezzlement, of money or property or assets of the Company or any
of its Affiliates; (iii) illegal use of drugs;
(iv) material breach of this Agreement or any
employment-related undertakings provided in a writing signed by the
Executive prior to or concurrently with this Agreement;
(v) gross negligence or willful misconduct in the performance
of Executive’s duties; (vi) breach of any fiduciary duty
owed to the Company, including, without limitation, engaging in
competitive acts while employed by the Company; or (vii) the
Executive’s willful refusal to
2
perform the assigned duties for which the
Executive is qualified as directed by the Executive’s
Supervising Officer (as hereinafter defined) or the Board;
provided, that in the case of any event constituting Cause within
clauses (iv) through (vii) which is curable by the
Executive, the Executive has been given written notice by the
Companies of such event said to constitute Cause, describing such
event in reasonable detail, and has not cured such action within
thirty (30) days of such written notice as reasonably determined by
the Chief Executive Officer. For purposes of this definition
of Cause, action or inaction by the Executive shall not be
considered “willful” unless done or omitted by the
Executive (A) intentionally or not in good faith and
(B) without reasonable belief that the Executive’s
action or inaction was in the best interests of the Companies, and
shall not include failure to act by reason of total or partial
incapacity due to physical or mental illness.
“ Change of
Control ” shall mean (a) Any
“Person” (having the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections
13(d) and 14(d) thereof, including a “group”
within the meaning of Section 13(d)(3)) has or acquires
“Beneficial Ownership” (within the meaning of
Rule 13d-3 under the Exchange Act) of 30% or more of the
combined voting power of Holding’s then outstanding voting
securities entitled to vote generally in the election of directors
(“ Voting Securities ”); provided, however, that
the acquisition or holding of Voting Securities by (i) Holding
of any of its subsidiaries, (ii) an employee benefit plan (or
a trust forming a part thereof) maintained by Holding or any of its
subsidiaries, or (iii) any Person in which the Executive has a
substantial equity interest shall not constitute a Change of
Control. Notwithstanding the foregoing, a Change of Control
shall not be deemed to occur solely because any Person acquired
Beneficial Ownership of more than the permitted amount of Voting
Securities as a result of the issuance of Voting Securities by
Holding in exchange for assets (including equity interests) or
funds with a fair value equal to the fair value of the Voting
Securities so issued; provided that if a Change of Control would
occur (but for the operation of this sentence) as a result of the
issuance of Voting Securities by Holding, and after such issuance
of Voting Securities by Holding, such Person becomes the Beneficial
Owner of any additional Voting Securities which increases the
percentage of the Voting Securities Beneficially Owned by such
Person to more than 50% of the Voting Securities of Holding, then a
Change of Control shall occur; (b) At any time during a period
of two consecutive years, the individuals who at the beginning of
such period constituted the Board (the “ Incumbent
Board ”) cease for any reason to constitute more than 50%
of the Board; provided, however, that if the election, or
nomination for election by Holding’s stockholders, of any new
director was approved by a vote of more than 50% of the directors
then comprising the Incumbent Board, such new director shall, for
purposes of this subsection (b), be considered as though such
person were a member of the Incumbent Board; provided, further,
however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a
result of (i) either an actual “Election Consent”
(as described in Rule 14a-11 promulgated under the Exchange
Act) or other actual solicitation of proxies or consents by or on
behalf of a Person other than the Incumbent Board (a “
Proxy Contest ”), or (ii) by reason of an
agreement intended to avoid or settle any actual or threatened
Election Contest or Proxy Contest; (c) Consummation of a
merger, consolidation or reorganization or approval by
Holding’s stockholders of a liquidation or dissolution of
Holding or the occurrence of a liquidation or dissolution of
Holding (“ Business Combination ”), unless,
following such Business Combination: (1) the Persons
with Beneficial Ownership of Holding, immediately before such
Business Combination, have Beneficial Ownership of more than 50% of
the combined voting power of the then outstanding
3
voting securities entitled to vote generally in
the election of directors of the corporation (or in the election of
a comparable governing body of any other type of entity) resulting
from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns Holding or all or
substantially all of Holding’s assets either directly or
through one or more subsidiaries) (the “ Surviving
Company ”) in substantially the same proportions as their
Beneficial Ownership of the Voting Securities immediately before
such Business Combination, (2) the individuals who were
members of the Incumbent Board immediately prior to the execution
of the initial agreement providing for such Business Combination
constitute more than 50% of the members of the board of directors
(or comparable governing body of a noncorporate entity) of the
Surviving Company; and (3) no Person (other than Holding, any
of its subsidiaries or any employee benefit plan (or any trust
forming a part thereof) maintained by Holding, the Surviving
Company or any Person who immediately prior to such Business
Combination had Beneficial Ownership of 30% or more of the then
Voting Securities) has Beneficial Ownership of 30% or more of the
then combined voting power of the Surviving Company’s then
outstanding voting securities; provided, that notwithstanding this
clause (3), a Change of Control shall not be deemed to occur solely
because any Person acquired Beneficial Ownership of more than 30%
of Voting Securities as a result of the issuance of Voting
Securities by Holding in exchange for assets (including equity
interests) or funds with a fair value equal to the fair value of
the Voting Securities so issued; provided, however that a Business
Combination with a Person in which the Executive has a substantial
equity interest shall not constitute a Change of Control, or
(d) Approval by Holding’s stockholders of an agreement
for the assignment, sale, conveyance, transfer, lease or other
disposition of all or substantially all of the assets of Holding to
any Person (other than a Person in which the Executive has a
substantial equity interest and other than a subsidiary of Holding
or other entity, the Persons with Beneficial Ownership of which are
the same Persons with Beneficial Ownership of Holding and such
Beneficial Ownership is in substantially the same proportions), or
the occurrence of the same. Notwithstanding the foregoing, a
Change of Control shall not be deemed to occur solely because any
Person acquired Beneficial Ownership of more than the permitted
amount of Voting Securities as a result of the acquisition of
Voting Securities by the Company which, by reducing the number of
Voting Securities outstanding, increases the proportional number of
shares Beneficially Owned by such Person; provided that if a Change
of Control would occur (but for the operation of this sentence) as
a result of the acquisition of Voting Securities by the Company,
and after such acquisition of Voting Securities by the Company,
such Person becomes the Beneficial Owner of any additional Voting
Securities which increases the percentage of the Voting Securities
Beneficially Owned by such Person, then a Change of Control shall
occur.
“ Exchange Act
” shall mean the Securities Exchange Act of 1934, as
amended.
“ Good Reason
” shall mean (i) any material breach by the Companies of
this Agreement without Executive’s written consent,
(ii) any material reduction, without the Executive’s
written consent, in the Executive’s duties, responsibilities
or authority; provided, however, that for purposes of this clause
(ii), neither (A) a change in the Executive’s
Supervising Officer or the number or identity of the
Executive’s direct reports, nor (B) a change in the
Executive’s title, duties, responsibilities or authority as a
result of a realignment or restructuring of the Companies’
executive organizational chart nor (C) a change in the
Executive’s title, duties, responsibilities or authority as a
result of a realignment or restructuring of the Companies shall
necessarily be deemed by itself to materially reduce
Executive’s duties, responsibilities or
4
authority, as long as, in the case of either
(A), (B) or (C), Executive continues to report to either the
Chief Executive Officer or Chief Operating Officer of the Companies
or to the Supervising Officer to whom she reported immediately
prior to the Change of Control or a Supervising Officer of
equivalent responsibility and authority, or (iii) without
Executive’s written consent: (A) a material
reduction in the Executive’s Base Salary, (B) the
relocation of the Executive’s principal place of employment
more than fifty (50) miles from its location on the date of a
Change in Control, or (C) the relocation of the
Company’s corporate headquarters office outside of the
metropolitan area in which it is located on the date of a Change in
Control. For purposes of this Agreement, a Change of Control,
alone, does not constitute Good Reason. Furthermore,
notwithstanding the above, the occurrence of any of the events
described above will not constitute Good Reason unless the
Executive gives the Companies written notice within thirty (30)
days after the initial occurrence of any of such events that the
Executive believes that such event constitutes Good Reason, and the
Companies thereafter fail to cure any such event within thirty (30)
days after receipt of such notice.
“ Person ”
shall mean any natural person, firm, corporation, limited liability
company, trust, partnership, limited or limited liability
partnership, business association, joint venture or other entity
and, for purposes of the definition of Change of Control herein,
shall comprise any “person”, within the meaning of
Sections 13(d) and 14(d) of the Exchange Act, including a
“group” as therein defined.
“ Subsidiary
” shall mean, with respect to any Person, any other Person of
which such first Person owns 20% or more of the economic interest
in such Person or owns or has the power to vote, directly or
indirectly, securities representing 20%or more of the votes
ordinarily entitled to be cast for the election of directors or
other governing Persons.
(b)
The capitalized terms used in
Section 5(j) have the respective meanings assigned to
them in such Section and the following additional terms have
the respective meanings assigned to them in the Sections hereof set
forth opposite them:
|
Annual Bonus”
|
Section 4(b)
|
|
“Base Salary”
|
Section 4(a)
|
|
“Bonus Plan”
|
Section 4(b)
|
|
“Confidential information or proprietary
data”
|
Section 6(a)(2)
|
|
“Customer”
|
Section 6(d)(2)
|
|
“Disability”
|
Section 5(c)
|
|
“Employment Period”
|
Section 2
|
|
“Retirement”
|
Section 5(f)
|
|
“Supervising Officer”
|
Section 3(a)
|
|
“Supplier”
|
Section 6(d)(2)
|
|
“Term” and “Termination
Date”
|
Section 2
|
SECTION 2.
Term and Employment
Period . Subject to
Section 19 hereof, the term of this Agreement (“
Term ”) shall commence on the Effective Date of this
Agreement and shall continue until the effective date of
termination of the Executive’s employment hereunder pursuant
to Section 5 of this Agreement. The period during which
the Executive is employed by the
5
Companies pursuant to this Agreement is referred
to herein as the “Employment Period.” The date on
which termination of the Executive’s employment hereunder
shall become effective is referred to herein as the
“Termination Date.” For purposes of Section 5 of
this Agreement only, the Termination Date shall mean the date on
which a “separation from service” has occurred for
purposes of Section 409A of the Internal Revenue Code and the
regulations and guidance thereunder (the “ Code
”).
SECTION 3.
Duties .
(a)
During the Employment Period, the
Executive (i) shall serve as Senior Vice President and Chief
Financial Officer of the Companies, (ii) shall report directly
to the Chief Executive Officer of the Companies (the “
Supervising Officer ”), (iii) shall, subject to
and in accordance with the authority and direction of the Board
and/or the Supervising Officer have such authority and perform in a
diligent and competent manner such duties as may be assigned to the
Executive from time to time by the Board and/or the Supervising
Officer and (iv) shall devote the Executive’s best
efforts and such time, attention, knowledge and skill to the
operation of the business and affairs of the Companies as shall be
necessary to perform the Executive’s duties. During the
Employment Period, the Executive’s place of performance for
the Executive’s duties and responsibilities shall be at the
Companies’ corporate headquarters office, unless another
principal place of performance is agreed in writing among the
parties and except for required travel by the Executive on the
Companies’ business or as may be reasonably required by the
Companies.
(b)
Notwithstanding the foregoing, it is
understood during the Employment Period, subject to any conflict of
interest policies of the Companies, the Executive may
(i) serve in any capacity with any civic, charitable,
educational or professional organization provided that such service
does not materially interfere with the Executive’s duties and
responsibilities hereunder, (ii) make and manage personal
investments of the Executive’s choice, and (iii) with
the prior consent of the Companies’ Chief Executive Officer,
which shall not be unreasonably withheld, serve on the board of
directors of one (1) for-profit business
enterprise.
SECTION 4.
Compensation
. During the Employment
Period, the Executive shall be compensated as follows:
(a)
the Executive shall receive, at such
intervals and in accordance with such Company payroll policies as
may be in effect from time to time, an annual salary (pro rata for
any partial year) equal to $416,000.16 (“ Base Salary
”). The Base Salary shall be reviewed by the Board from
time to time and may, in the Board’s sole discretion, be
increased when deemed appropriate by the Board; if so increased, it
shall not thereafter be reduced (other than an across-the-board
reduction applied in the same percentage at the same time to all of
the Companies’ senior executives at the same grade
level);
(b)
during the Employment Period, the
Executive shall be eligible to earn an annual incentive
compensation award under the Companies’ management incentive
or bonus plan, or a successor plan thereto, as shall be in effect
from time to time (the “ Bonus Plan ”), subject
to achievement of performance goals determined in accordance with
the terms of the
6
Bonus Plan (such annual incentive compensation
award, the “ Annual Bonus ”), with such Annual
Bonus to be payable in a cash lump sum at such time as bonuses are
ordinarily paid to the Companies’ senior executives at the
same grade level. Certain details of Executive’s
participation in the Bonus Plan are included in Appendix A
hereto and made a part hereof;
(c)
the Executive shall be reimbursed,
at such intervals and in accordance with such Company policies as
may be in effect from time to time, for any and all reasonable and
necessary out-of-pocket business expenses incurred by the Executive
during the Employment Period for the benefit of the Companies,
subject to documentation in accordance with the Companies’
policies;
(d)
the Executive shall be entitled to
participate in all incentive, savings and retirement plans, stock
option plans, practices, policies and programs applicable generally
to other senior executives of the Companies at the same grade level
and as determined by the Board from time to time. Executive
shall be granted the equity incentives in accordance with
Appendix A as attached hereto and made a part
hereof;
(e)
the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company to senior executives of the Companies at the same grade
level (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
and accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other executives of
the Companies at the same grade level;
(f)
the Executive shall be entitled to
not less than twenty (20) paid vacation days per calendar year (pro
rata for any partial year);
(g)
the Executive shall be entitled to
participate in the Company’s other executive fringe benefits
and perquisites generally applicable to the Companies’ senior
executives at the same grade level in accordance with the terms and
conditions of such arrangements as are in effect from time to time;
and
(h)
appended hereto as Appendix B and
made a part hereof is a summary of the current employee benefit
plans and perquisites available to the Executive, which plans and
perquisites are subject to change by the Company from time to
time.
SECTION 5.
Termination of
Employment .
(a)
All Accrued Benefits to which the
Executive (or the Executive’s estate or beneficiary) is
entitled shall be payable within thirty (30) days following the
Termination Date,, except as otherwise specifically provided herein
or under the terms of any applicable policy, plan or program, in
which case the payment terms of such policy, plan or program shall
be determinative.
(b)
Any termination by the Companies, or
by the Executive, of the Employment Period shall be communicated by
written notice of such termination to the Executive, if such notice
is delivered by the Companies, and to the Companies, if such notice
is
7
delivered by the Executive, each in compliance
with the requirements of Section 13 hereof. Except in
the event of termination of the Employment Period by reason of
Cause, Good Reason or the Executive’s death, the effective
date of the termination of Executive’s employment shall be no
earlier than thirty (30) days following the date on which notice of
termination is delivered by one party to the other in compliance
with the requirements of Section 13 hereof.
(c)
If the Employment Period is
terminated prior to the expiration of the Term by the Executive for
Good Reason or by the Companies for any reason other than Cause or
the Executive’s permanent disability, as defined in the
Companies’ Board-approved disability plan or policy as in
effect from time to time (“ Disability ”) and
other than within two (2) years following a Change of Control,
then, as the Executive’s exclusive right and remedy in
respect of such termination:
(i)
the Executive shall be entitled to
receive from the Company the Executive’s Accrued Benefits in
accordance with Section 5(a);
(ii)
the Executive shall be entitled to
an amount equal to one and one-half (1½) times the
Executive’s then existing Base Salary, to be paid in such
intervals and at such times in accordance with the Company’s
payroll practices in effect from time to time over the eighteen
(18) month period following the Termination Date; but in no event
shall such amount paid under this Section 5
(c)(ii) exceed the lesser of (A) $460,000.00 or
(B) two (2) times Executive’s annualized
compensation based upon the annual rate of pay for services to the
Companies for the calendar year prior to the calendar year in which
the Termination Date occurs (adjusted for any increase during that
year that was expected to continue indefinitely if the Executive
had not separated from service), consistent with the parties’
intention that the payments under this
Section 5(c)(ii) constitute a “separation pay plan
due to involuntary “separation from service” under
Treas. Reg. § 1.409A-1(b)(9)(iii);
(iii)
in the event that an amount equal to
one and one-half (1 ½) times the Executive’s
then-existing Base Salary exceeds the limitations of Subsections 5
(c) (ii)(A) or (B) above, then the Executive shall
be entitled to an additional lump sum payment equal to the
difference between (x) one and one-half (1 ½) times the
Executive’s then existing Base Salary and (y) the amount
payable to Executive under Subsection 5(c)(ii), such lump sum
payble to Executive on the first regular payroll date of the
Company to occur following the date that is six months after the
Termination Date:
(iv)
the Executive shall be entitled to a
payment in an amount equal to one and one-half (1 ½ ) times
the actual Annual Bonus award which would otherwise be payable for
the calendar year during which the Termination Date occurs, as if
the Executive had been employed for all of such calendar year based
on actual performance, to be paid at such time as the Annual Bonus
award would otherwise be paid in accordance with the
Company’s policies;
(v)
the Executive shall continue to be
covered, upon the same terms and conditions described in
Section 4(e) hereof, by the same or equivalent medical
and/or
8
dental insurance plans, programs
and/or arrangements as in effect for the Executive immediately
prior to the Termination Date, beginning on the Termination Date
and continuing until the earlier of: (A) the eighteen
(18) month anniversary following the date of the Executive’s
Termination Date, and (B) the date the Executive receives
substantially equivalent coverage under the plans, programs and/or
arrangements of a subsequent employer; provided that Executive
timely pays the Executive’s portion of such coverage, and
provided further that if the Company determines that the coverage
to be provided under this Section 5(c)(v) would cause a
self-insured plan maintained by the Company to be in violation of
the nondiscrimination requirements of Section 105(h) of
the Code, then such coverage will be paid for by the Executive by
means of the Company reporting imputed income to Executive on a
monthly basis for the fair market value of such coverage plus
additional imputed amounts to pay any income tax at source on
resulting wages subject to FICA or the income tax withholding
provisions of federal or state tax law, including pyramiding wages
and taxes (and the Company shall be responsible for depositing all
applicable withholding amounts in a timely manner with the
appropriate tax authority), with the intent that any amounts
payable under this Section 5(c)(v) that are not otherwise
excluded from deferred compensation under Code Section 409A
shall be excluded from deferred compensation pursuant to a
“separation pay plan due to involuntary separation from
service” under Treas. Reg.
§1.409A-1(b)(9)(iii);
(vi)
the Executive shall receive a lump
sum payment in an amount equal to the amount the Company would
otherwise expend for 18 month’s coverage for its share of the
premiums for life and disability insurance plans or programs as in
effect for Executive immediately prior to the Termination Date,
payable to Executive within thirty (30) days following the
Termination Date; and
(vii)
for the period commencing on the
Termination Date and ending not later than the last day of the
second calendar year after the Termination Date, the Executive
shall be entitled to receive executive level career transition
assistance services provided by a career transition assistance firm
selected by the Executive and paid for by the Companies in an
amount not to exceed ten percent (10%) of the Executive’s
then existing Base Salary. The Executive shall not be
eligible to receive cash in lieu of executive level career
transition assistance services.
(d)
If during the Employment Period, a
Change of Control occurs and the Employment Period is terminated by
the Companies for any reason other than Cause or Disability or by
the Executive for Good Reason within two (2) years from the
date of such Change of Control, and, in the case of
Executive’s resignation for Good Reason, the
Executive’s separation from service occurs within two years
following the initial existence of the condition giving rise to
Good Reason, then:
(i)
the Executive shall be entitled to
receive from the Company the Executive’s Accrued Benefits in
accordance with Section 5(a);
9
(ii)
the Executive shall be entitled to a
lump-sum payment in an amount equal to two (2) times the
Executive’s then existing Base Salary, to be paid within
thirty (30) days following the Termination Date;
(iii)
the Executive shall be entitled to a
lump-sum payment in an amount equal to two (2) times the
Executive’s target incentive compensation award for the
calendar year during which the Termination Date occurs, to be paid
within thirty (30) days following the Termination Date;
(iv)
the Executive shall be entitled to a
lump-sum payment to be paid within thirty (30) days following the
Termination Date in an amount equal to the pro-rata target
incentive compensation award for the calendar year during which the
Termination Date occurs. Such pro-rata target incentive
compensation award shall be determined by multiplying the target
incentive compensation award amount by a fraction, the numerator of
which is the number of days in the calendar year of the Termination
Date elapsed prior to the Termination Date and the denominator of
which is three hundred and sixty-five (365).
(v)
the Executive shall continue to be
covered, upon the same terms and conditions described in
Section 4(e) hereof, by the same or equivalent medical
and/or dental insurance plans, programs and/or arrangements as in
effect for the Executive immediately prior to the Change of
Control, beginning on the Termination Date and continuing until the
earlier of: (A) the second anniversary following the
date of the Executive’s Termination Date, and (B) the
date the Executive receives substantially equivalent coverage under
the plans, programs and/or arrangements of a subsequent employer;
provided that Executive timely pays the Executive’s portion
of such coverage, and provided further that if the Company
determines that the coverage to be provided under this
Section 5(d)(v) would cause a self-insured plan
maintained by the Company to be in violation of the
nondiscrimination requirements of Section 105(h) of the
Code, then such coverage will be paid for by the Executive by means
of the Company reporting imputed income to Executive on a monthly
basis for the fair market value of such coverage plus additional
imputed amounts to pay any income tax at source on resulting wages
subject to FICA or the income tax withholding provisions of federal
or state tax law, including pyramiding wages and taxes (and the
Company shall be responsible for depositing all applicable
withholding amounts in a timely manner with the appropriate tax
authority), with the intent that any amounts payable under this
Section 5(d)(v) that are not otherwise excluded from
deferred compensation under Code Section 409A shall be
excluded from deferred compensation pursuant to a “separation
pay plan due to involuntary separation from service” under
Treas. Reg. §1.409A-1(b)(9)(iii);
(vi)
the Executive shall receive a lump
sum payment in an amount equal to the amount the Company would
otherwise expend for 24-month’s coverage for its share of the
premiums for life and disability insurance plans or programs as in
effect for Executive immediately prior to the Termination Date,
payable to Executive within thirty (30) days following the
Termination Date;
10
(vii)
the Executive
