Termination Benefits Clause Example from Business Contracts

Termination Benefits. (a) If a Change in Control occurs during the term of this Agreement and within one year thereafter, the Executive's employment terminates involuntarily without Cause or if Executive voluntarily terminates his employment with Good Reason the Bank shall make or cause to be made: (i)a lump sum cash payment equal to one (1) times the Executive's then current base salary. Such payment shall be made not later than ten (10) days following Executive's termination of employment. Notwithstanding the foreg...oing, if applicable, the payment will not be made to the Executive under this Section 3 until after obtaining the proper regulatory approval to make the payment and, if that is the case, the Bank will make the payment within ten (10) days of obtaining such regulatory approval. 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. (ii)Continued medical, dental and life insurance coverage for Executive and his dependents at the Bank's expense. The medical, dental and life insurance coverage shall continue for twelve months following termination of employment. (b) Notwithstanding the preceding provisions of this Section 3, in no event shall the aggregate payments or benefits to be made or afforded to Executive under this Agreement (the "Termination Benefits") constitute an "excess parachute payment" under Section 280G of the Code or any successor thereto, and to avoid such a result, Termination Benefits will be reduced, if necessary, to an amount (the "Non-Triggering Amount"), the value of which is one dollar ($1.00) less than an amount equal to three (3) times Executive's "base amount," as determined in accordance with said Section 280G. The allocation of the reduction required hereby among the Termination Benefits provided by this Section 3 shall first be made from any cash severance due Executive. 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 this Section 3, below zero. 3 (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 welfare 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 Event of Termination 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 Corporation for the calendar year preceding the year in which Executive has an Event of Termination, 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 occurs the Event of Termination. The payment of the "permitted amount" shall be made within sixty (60) days of the occurrence of the Event of Termination. Any payment in excess of the permitted amount shall be made to Executive on the first day of the seventh month following the Event of Termination. "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 shall be a "Specified Employee" only if the Bank is a publicly-traded institution or the subsidiary of a publicly-traded holding company. (d) If under the terms of the applicable policy or policies for the insurance benefits specified in Section 3(a)(ii) of this Agreement it is not possible to continue coverage for the Executive and his dependents, the Bank 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 following a Change in Control. View More