Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
Each employment agreement has an initial term of three years that automatically extends for additional one-year terms; provided that, the Corporation must give notice of its intention to terminate at least 60 days before the end of the current term.
Under their respective employment agreements, initial annual base salaries are
Each executive officer also received, on
Under each employment agreement, if an executive officer's employment is terminated without "cause" by the Corporation, by the Corporation's nonrenewal of the then-current term of the agreement, or for "good reason" by the officer, the officer is entitled to receive, subject to execution of a release agreement, an amount equal to the sum of (i) 12 months of base salary, (ii) an amount equal to the Annual Bonus Target in effect for the fiscal year in which the date of such termination occurs, and (iii) an amount equal to the Annual Bonus Target in effect for the fiscal year in which employment terminates (pro rated for the portion of the fiscal year before termination), with the sum payable in 12 equal monthly installments. The Corporation will also pay, or reimburse the officer, for their COBRA premiums for a period of 12 months.
Under each employment agreement, if (i) an executive officer's employment is terminated without "cause" by the Corporation, by the Corporation's nonrenewal of the then-current term of the agreement, or for "good reason" by the officer (each as defined in the agreement), within 12 months following a "change in control" of the Corporation or (ii) an executive officer's employment is terminated without "cause" other than due to "disability" within 90 days prior to a "change in control" of the Corporation because the officer can reasonably demonstrate the eventual acquirer requested such termination, then in each case, the officer will be entitled to an amount equal to the sum of (i) 21 months of base salary and (ii) an amount equal to 175% of the Annual Bonus Target in effect for the fiscal year in which the date of such termination occurs, payable in 21 equal monthly installments.
Under each employment agreement, if an executive officer's employment is terminated for "cause," due to an election not to renew the then-current term of the agreement, by the officer without "good reason," or due to death or "disability," the officer is not entitled to any of the severance benefits described in the preceding paragraphs.
Each employment agreement does not include any excise tax gross ups; however, if any of the payments or benefits provided for under an employment agreement or otherwise payable to an executive officer would constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code and could be subject to the related excise tax, the officer would be entitled to receive either full payment of such payments and benefits or such
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lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the officer.
Each employment agreement also requires that the executive officer keep the Corporation's information confidential. In addition, the officer is subject to provisions related to non-competition and non-solicitation of customers and employees for the longer of (i) 12-months following termination of employment or (ii) the severance payment period.
The above summary description of each employment agreement does not purport to be complete and is qualified in its entirety by reference to the full text of that employment agreement, with terms in quotations as defined in the agreement. The employment agreements are each filed as an exhibit to this Current Report on Form 8-K.
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