Termination Benefits Clause Example from Business Contracts

Termination Benefits. (a) If within one (1) year of a Change in Control, Executive's employment is involuntarily terminated for reasons other than Just Cause or Executive elects to terminate her employment for "Good Reason" (in accordance with Section 2(a) of this Agreement) Executive shall receive: (i)a lump sum cash payment equal to eighteen (18) months of the Executive's then current base salary or her base salary as of the date of the Change in Control, whichever is greater. Such payment shall be made not later t...han five (5) days following Executive's termination of employment. In addition to the cash severance benefit provided for under this Section 3(a)(i) the Bank shall provide or cause to be provided post-termination insurance coverage described in Section 3(a)(ii) below, subject to the provisions of Section 3(c) of this Agreement. 2 (ii)Continued health and dental insurance coverage for Executive and her dependents at the Bank's expense. The health and dental insurance coverage shall continue until the first to occur: (x) Executive's attainment of age 65, (y) Executive's death or (z) twelve (12) months after Executive's termination of employment. To the extent that benefits required under this Section 3(a)(ii) cannot be provided under the terms of any employee benefit plan maintained by the Bank or a successor to the Bank, the Bank (or its successor) shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Bank's projected cost to maintain that particular insurance benefit (and associated income tax gross-up benefit, if applicable) had the Executive's employment not terminated, assuming continued coverage for twelve (12) months. (b) Notwithstanding any other provisions of this Agreement, in the event that the aggregate payments or benefits to be made or afforded to the Executive under this Agreement or otherwise, which are deemed to be parachute payments as defined in Section 280G of the Code or any successor thereof (the "Termination Benefits"), would be deemed to include an "excess parachute payment" under Section 280G of the Code, then the Termination Benefits shall be reduced to a value which is one dollar ($1.00) less than an amount equal to three (3) times the Executive's "base amount," as determined in accordance with Section 280G of the Code. The allocation of the reduction required hereby among the Termination Benefits shall first be made from any cash severance benefit due under Section 3(a)(i) of this Agreement. Nothing contained in this Agreement shall result in a reduction of any payments or benefits to which the Executive may be entitled upon termination of employment other than pursuant to Sections 3 hereof or a reduction in the payments and benefits specified, below zero. (c) The parties to this Agreement intend for the payments to satisfy the short-term deferral exception under Section 409A of the Code or, in the case of health and dental benefits, not constitute deferred compensation (since such amounts are not taxable to Executive). However, notwithstanding anything to the contrary in this Agreement, to the extent payments do not meet the short-term deferral exception of Section 409A of the Code and, in the event Executive is a "Specified Employee" (as defined herein) no payment shall be made to Executive under this Agreement prior to the first day of the seventh month following the Executive's termination of employment in excess of the "permitted amount" under Section 409A of the Code. For these purposes the "permitted amount" shall be an amount that does not exceed two times the lesser of: (A) the sum of Executive's annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which Executive terminates employment, or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which Executive's termination of employment occurs. The payment of the "permitted amount" shall be made within five (5) days of the Executive's termination of employment. Any payment in excess of the permitted amount shall be made to Executive on the first day of the seventh month following Executive's termination of employment. "Specified Employee" shall be interpreted to comply with Section 409A of the Code and shall mean a key employee within the meaning of Section 416(i) of the Code (without regard to paragraph 5 thereof), but an individual 3 shall be a "Specified Employee" only if the Bank is a publicly-traded institution or the subsidiary of a publicly-traded holding company. View More