INVOLUNTARY TERMINATION NOT FOR CAUSE
In February 2007, the Board adopted the Executive Officer Pay Continuation Policy (the “Pay Continuation Policy”) to provide severance cash payments and other benefits if we terminated an executive officer without cause (not for death, disability or cause). Except for Mr. Moster and Mr. Barry, who would receive lump-sum cash payments pursuant to the terms of their respective severance agreements described in the subsection “Voluntary Termination For Good Reason” of this section, executive officers with less than seven years of service would receive six months of salary, and executive officers with seven or more years of service would receive up to one year’s salary. Under the Pay Continuation Policy, executive officers would also receive continued health and welfare benefits for a period of up to twelve months following termination and outplacement services. To receive payments under the Pay Continuation Policy, executives must execute a general release containing a release of all claims against us, a covenant not to sue, a non-competition covenant, and a non-disparagement agreement, all in form and substance satisfactory to us. All benefits under the Pay Continuation Policy will cease on the last day of the month in which the executive officer commences new employment.
Also, in the event of an involuntary termination without cause, any outstanding Stock Price PRSUs held by Mr. Moster or Ms. Ingersoll that have achieved the applicable price per share goal at the time of termination would vest upon termination, and any unearned Stock Price PRSUs would be forfeited.
In the event of an involuntary termination without cause, NQSOs would fully vest as of the date of termination. Additionally, RSUs and PSUs, in each case, that have been outstanding for at least 12 months, would vest upon the lapse of the vesting period on a pro-rata basis (percentage of time from the grant date or the start of the performance period, as applicable, to the termination date).
The equity award vesting is subject to the NEO’s execution of a separation agreement and release of claims, at the Company’s request.
VOLUNTARY TERMINATION FOR GOOD REASON
NQSOs will vest on an accelerated basis upon a resignation for “good reason.” Any outstanding Stock Price PRSUs held by Mr. Moster or Ms. Ingersoll that have achieved the applicable price per share goal at the time of termination would vest upon termination, and any unearned Stock Price PRSUs would be forfeited. All other unvested RSUs and PSUs held by the NEO would be forfeited upon the NEO’s resignation for good reason.
In addition, Messrs. Moster and Barry each have a severance agreement that provides for post-termination payments upon (i) an involuntary termination not for cause by us or (ii) a voluntary termination of employment by either of them for “good reason” as defined under their respective severance agreements. In these scenarios, Messrs. Moster and Barry will each receive the equivalent of two years or one year, respectively, of their base salary, plus a pro-rata portion of the annual cash incentive granted under the MIP for the year in which the termination occurs, to the extent earned, provided that they timely execute a satisfactory release of all claims, waiver of rights, and covenant not to sue. Mr. Moster must also resign from our Board of Directors.
DEATH OR DISABILITY
We provide certain cash amounts and equity award vesting if an NEO’s termination is due to death or disability. Under Mr. Moster’s severance agreement, he is entitled to a lump sum payment of two times his annual salary on termination related to death or disability. The MIP and individual severance agreements for Mr. Moster and Mr. Barry, as appliable, provide that the NEOs will be entitled to receive a pro-rata portion of the annual cash incentive granted under the MIP, calculated based on the achievement of performance measures through the date of the employment termination.
Any outstanding Stock Price PRSUs held by Mr. Moster or Ms. Ingersoll that have achieved the applicable price per share goal at the time of termination would vest upon termination. The NEOs would also receive RSUs (except as described below) and earned PSUs, in each case, that have been outstanding for at least 12 months, upon the lapse of the vesting period on a pro-rata basis (percentage of time from the grant date or the start of the performance period, as applicable, to the termination date). The equity award vesting is subject to the NEO’s execution of a separation agreement and release of claims, at the Company’s request. All other unvested RSUs, PSUs, Stock Price PRSUs, and NQSOs held by the NEO will be forfeited upon the NEO’s termination related to death or disability.
