2.20 Subsidiary means any entity in an unbroken chain of entities beginning with the Company if each of the entities (other than the last entity in the unbroken chain) owns stock (or units or interests, as the case may be) possessing 50% or more of the total combined voting power of all classes of stock (or units or interests, as the case may be) in one of the other entities in the chain.
3. Eligibility for Severance Benefits. An individual is eligible for the Severance Benefits under the Plan, in the amount set forth in Section 4, only if he or she is a Covered Employee on the date he or she experiences a Qualifying Termination or CIC Qualifying Termination, as applicable.
4. Severance Benefits. Notwithstanding anything to the contrary in this Section 4, the Company shall pay the Covered Employees earned but unpaid base salary and other vested but unpaid cash entitlements for the period through and including the date of Separation, including unused earned vacation pay and unreimbursed documented business expenses incurred by the Covered Employee prior to the date of Separation (collectively, Accrued Compensation and Expenses). In addition, the Covered Employee shall be entitled to any other vested benefits earned by the Covered Employee for the period through and including the date of Separation under any other employee benefit plans and arrangements maintained by the Company or a Subsidiary, in accordance with the terms of such plans and arrangements, except as may be modified herein (collectively, Accrued Benefits). Any Accrued Compensation and Expenses to which the Covered Employee is entitled shall be paid to the Covered Employee in cash as soon as administratively practicable after the Separation, and, in any event, no later than two and one-half (2-1/2) months after the end of the taxable year in which the Separation occurs or at such earlier time as may be required by applicable law. Any Accrued Benefits to which the Covered Employee is entitled shall be paid to the Covered Employee as provided in the relevant plans and arrangements. In addition, the Covered Employee may be eligible to receive additional payments and benefits, as set forth in more detail below.
4.1 CIC Qualifying Termination. If the Covered Employee is subject to a CIC Qualifying Termination, then, subject to Sections 5 and 7 below, the Covered Employee will be entitled to the following payments and benefits:
4.1.1 Base Salary Cash Severance Benefits. The Company shall pay the Covered Employee, as cash severance, an amount equal to a number of months, as set forth in such Covered Employees Participation Agreement, of his or her monthly base salary rate in effect immediately prior to the CIC Qualifying Termination. The Covered Employee will receive his or her severance payment in a cash lump sum, which will be paid on the first business day occurring after the sixtieth (60th) day following the CIC Qualifying Termination, provided that the Release Conditions have been satisfied.
4.1.2 Cash Bonus Severance Benefits. The Company shall pay the Covered Employee, as additional cash severance, a lump sum cash payment equal to a percentage, as set forth in such Covered Employees Participation Agreement, of such Covered Employees target annual bonus as set forth in writing in such Covered Employees offer letter agreement or other governing employment documents with the Company, less deductions and withholdings, to be paid with the severance payment set forth above in Section 4.1.1.
4.1.3 Equity Vesting Benefit. Except as set forth below, each of the Covered Employees then outstanding unvested Equity Awards shall accelerate and become vested (and, if applicable, exercisable) with respect to 100% of the then unvested shares subject thereto. Equity Awards means all options to purchase shares of Company common stock, restricted stock units, and all other stock-based awards granted to the Covered Employee, including but not limited to stock bonus awards, restricted stock and stock appreciation rights. Subject to Section 5.1, the accelerated vesting described above shall be effective as of the CIC Qualifying Termination. Notwithstanding the foregoing, to the extent an Equity Award vests based upon the satisfaction of any performance criteria, only the time-based aspect (if any) of the vesting schedule of such Equity Award shall accelerate pursuant to the terms of this Section 4.1.3, and any remaining performance-based aspect of the vesting schedule of such Equity Award shall remain subject to the terms of such Equity Award and shall not be subject to accelerated vesting pursuant to the terms of this Section 4.1.3.