4.
The Executive’s Covenants . The Executive agrees that,
subject to the terms and conditions of this Agreement, in the event
of a Potential Change in Control during the Term, the Executive
will remain in the employ of the Company until the earliest of (i)
a date which is six months following the date of such Potential
Change in Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive’s
employment for Good Reason or by reason of death, Disability or
Retirement, or (iv) the termination by the Company of the
Executive’s employment for any reason.
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5.
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Compensation Other Than Severance
Payments.
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5.1 Following
a Change in Control and during the Term, during any period that the
Executive fails to perform the Executive’s full-time duties
with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive’s full
salary to the Executive at the rate in effect at the commencement
of any such period, together with all compensation and benefits
payable to the Executive under the terms of any compensation or
benefit plan, program or arrangement maintained by the Company
during such period (other than any disability plan), until the
Executive’s employment is terminated by the Company for
Disability.
5.2 If
the Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay the Executive’s full salary to the Executive
through the Date of Termination at the rate in effect immediately
prior to the Date of Termination or, if higher, the rate in effect
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all
compensation and benefits payable to the Executive through the Date
of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect
immediately prior to the Date of Termination or, if more favorable
to the Executive, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good
Reason.
5.3 If
the Executive’s employment shall be terminated for any reason
following a Change in Control and during the Term, the Company
shall pay to the Executive the Executive’s normal
post-termination compensation and benefits as such payments become
due. Such post-termination compensation and benefits shall be
determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans,
programs and arrangements as in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as in
effect immediately prior to the occurrence of the first event or
circumstance constituting Good Reason.
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6.
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Severance Payments and Benefits.
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6.1 If
the Executive’s employment is terminated during the Term and
following the first to occur of a Change in Control or July 15,
2008, other than (A) by the Company for Cause, (B) by reason of
death or Disability, or (C) by the Executive without Good Reason,
then the Company shall pay the Executive the amounts, and provide
the Executive the benefits, described in this Section 6.1
(“Severance Payments”) in addition to any payments and
benefits to which the Executive is entitled under Section 5 hereof.
For purposes of this
Agreement,
the Executive’s employment shall be deemed to have been
terminated following a Change in Control by the Company without
Cause or by the Executive with Good Reason, if (i) the
Executive’s employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in
Control ever occurs) and such termination was at the request or
direction of a Person who has entered into an agreement with the
Company the consummation of which would constitute a Change in
Control, (ii) the Executive terminates his employment for Good
Reason prior to a Change in Control (whether or not a Change in
Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of such
Person, or (iii) the Executive’s employment is terminated by
the Company without Cause or by the Executive for Good Reason and
such termination or the circumstance or event which constitutes
Good Reason is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control ever
occurs).
(A) In lieu
of any further salary payments to the Executive for periods
subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay
to the Executive a lump sum severance payment, in cash, equal to
the sum of (i) the Executive’s base salary as in effect
immediately prior to the Date of Termination or, if higher, in
effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, (ii) the Executive’s
target annual bonus under any annual bonus or incentive plan
maintained by the Company in respect of the fiscal year in which
occurs the Date of Termination or, if higher, the fiscal year in
which occurs the first event or circumstance constituting Good
Reason and (iii) a pro rata portion to the Date of Termination of
the annual incentive bonus the Executive could have received for
the year in which the Date of Termination occurs, calculated by
multiplying the amount determined under clause (ii) by a fraction,
the numerator of which is the number days during such the year in
which the Date of Termination occurs up to the Date of Termination
and the denominator of which is 365.
(B) For the
12-month period immediately following the Date of Termination, the
Company shall arrange to provide the Executive and his dependents
life, accident and health insurance benefits substantially similar
to those provided to the Executive and his dependents immediately
prior to the Date of Termination or, if more favorable to the
Executive, those provided to the Executive and his dependents
immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at no greater after tax cost
to the Executive than the after tax cost to the Executive
immediately prior to such date or occurrence;
provided , however , that,
unless the Executive consents to a different method, such health
insurance benefits shall be provided through a third-party insurer.
Benefits otherwise receivable by the Executive pursuant to this
Section 6.1(B) shall be reduced to the extent benefits of the same
type are received by or made available to the Executive during the
12-month period following the Executive’s termination of
employment (and any such benefits received by or made available to
the Executive shall be reported to the Company by the
Executive); provided , however , that the
Company shall reimburse the Executive for the excess, if any, of
the after tax cost of such benefits to the Executive over such cost
immediately prior to the Date of Termination or, if more favorable
to the Executive, the first occurrence of an event or circumstance
constituting Good Reason.
(C) If
requested by the Executive, the Company shall provide the Executive
with outplacement services suitable to the Executive’s
position for a period of 12 months or, if earlier, until the first
acceptance by the Executive of an offer of
employment.
(D) Any
equity awards, including without limitation stock options,
restricted stock and restricted stock units, which have been issued
to the Executive by the Company shall become fully vested and, as
applicable, exercisable, shall remain exercisable for the full term
thereof, and any performance conditions imposed with respect to
such awards shall be deemed to be fully achieved. The Executive
shall also be entitled to similar treatment as benefit active
employees for purposes of implementation, modifications and
amendments of equity awards, including without limitation, employee
cashless exercise programs, equity sale programs, exchange offers,
participation in rights offers, equity adjustments to reflect
transactions, and any other program or offer made available to
active employees generally.
6.2 The
payment provided in subsection (A) of Section 6.1 hereof shall be
made not later than the fifth day following the Date of
Termination; provided , however , that if the
amounts of such payments, cannot be finally determined on or before
such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Executive, of the
minimum amount of such payments to which the Executive is clearly
entitled and shall pay the remainder of such payments (together
with interest on the unpaid remainder (or on all such payments to
the extent the Company fails to make such payments when due) at
120% of the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later
than the 30th day after the Date of Termination. In the event that
the amount of the estimated payments exceeds the amount
subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the
fifth business day after demand by the Company (together with
interest at 120% of the rate provided in section 1274(b)(2)(B) of
the Code). At the time that payments are made under this Agreement,
the Company shall provide the Executive with a written statement
setting forth the manner in which such payments were calculated and
the basis for such calculations including, without limitation, any
opinions or other advice the Company has received from Tax Counsel,
the Auditor or other advisors or consultants (and any such opinions
or advice which are in writing shall be attached to the
statement).
6.3 The
Company also shall reimburse the Executive for all legal fees and
expenses incurred by the Executive in disputing in good faith any
issue hereunder relating to the termination of the
Executive’s employment, in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made
within five business days after delivery of the Executive’s
written requests for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require, but in
no event later than the last day of the Executive’s taxable
year following the taxable year in which the expense was
incurred.
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7.
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Termination
Procedures.
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7.1
Notice of Termination . After a Change in Control and during
the Term, any purported termination of the Executive’s
employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other
party hereto in accordance with Section 10 hereof. For purposes of
this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set 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.
7.2
Date of Termination . “Date of Termination,”
with respect to any purported termination of the Executive’s
employment after a Change in Control and during the Term, shall
mean (i) if the Executive’s employment is terminated for
Disability, 30 days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time
performance of the Executive’s duties
