Sections (b) and (c). The Company shall pay to you severance equal to the sum of twelve (12) months of Base Salary and 100% of your Target Bonus. Notwithstanding the foregoing, in the event of termination without cause (including Constructive Termination) pursuant to a Change of Control, your severance will equal the sum of eighteen (18) months of Base Salary and 100% of your pro-rated Target Bonus. The Severance Pay shall be paid in installments in accordance with its regular payroll practices, beginning with the Payment Date (as defined below). For this purpose, Base Salary means your highest base salary rate on or before your Date of Termination.
(c) COBRA Premiums. Should you timely elect and be eligible to continue receiving group health insurance pursuant to the COBRA law, the Company will, until the earliest of (x) the date that is twelve (12) months following the Separation Date, (y) the date on which you obtain alternative coverage or (z) the date on which your COBRA eligibility ends (as applicable, the COBRA Contribution Period), continue to pay the Companys share of the premiums for such coverage to the same extent it pays for similarly-situated, active employees. The Companys payment of those premiums may take the form of reimbursement of premium costs to you after you have paid them, or payment to you of funds equal to the amount of the premiums, so that you can then make payments directly to the COBRA insurance carrier. In any case, you agree that any premium costs shall be paid by you, not the Company, to the COBRA insurance carrier. That is, any premium costs during the COBRA Contribution Period, and all premium costs thereafter, shall be paid by you on a monthly basis for as long as, and to the extent that, you remain eligible for COBRA continuation. You agree that, should you obtain alternative medical and/or dental insurance coverage prior to the date that is twelve (12) months following the Separation Date, you will so inform the Company in writing within five (5) business days of obtaining such coverage.
For the purpose of this Section 4, the following definitions apply:
(i) Cause means (i) material breach by you of any other agreement with the Company or any of its affiliates; (ii) other conduct by you that is materially harmful to the business, interests or reputation of the Company or any of its affiliates, (iii) your conviction of, or pleading guilty or no contest to, any crime involving fraud, embezzlement or other material dishonesty by you with respect to the Company or any of its affiliates; (iv) your conviction of, or pleading guilty or no contest to, any crime involving moral turpitude; (v) a breach of any confidentiality agreement with the Company; or (vi) a breach of any non-competition/non-solicitation agreement with the Company. With respect to a breach of (i) or (ii), you shall be given 30 days, after written notice of such breach, to cure a breach to the reasonable satisfaction of the Company.
(ii) Constructive Termination means any action on the part of the Company not consented to by you in writing that has the following effect or effects: (i) a material reduction in reporting relationship, authority, duties or responsibilities in accordance with applicable law, provided however, that a sale or transfer of less than all or substantially all of the business of the Company or any of its subsidiaries or other reduction of less than all or substantially all of its business or that of its subsidiaries, or the fact that the Company has become a subsidiary of another company or that the securities of the Company are no longer publicly traded, in and of itself shall not constitute a material diminution in your authority, duties or responsibilities has occurred; or (ii) any material reduction in your base salary. Notwithstanding the foregoing, if the Company has become a subsidiary of another company and your employment with the Company continues for a period of 12 months following such time as the Company becomes a subsidiary without your consent in writing, termination of your employment by you within 30 days of such first anniversary shall be deemed a Constructive Termination for purposes of this Section 4.
5. Insurance Benefits. You will be eligible to participate in the Companys Medical and Dental insurance programs as well as the Life, AD&D, Short- and Long-Term Disability plans, and 401(k) plan subject to the terms and conditions of those plans. Presently, the Company pays for 85% of the premium cost of the HMO plan and 75% of the deductible for both medical plans (HMO and PPO), and 100% of the cost of Life and AD&D insurance as well as Short- and Long-Term Disability plans.