In the event Mr. Colellas employment is terminated due to death or total
disability, or Mr. Colella voluntarily terminates his employment (other than for good reason as defined below within two years of a
change-in-control
(as defined in his Employment Agreement)), we will pay his base salary accrued through the last date of employment, plus any annual cash incentive plan bonus earned for the prior calendar year, but not yet paid.
In the event Mr. Colellas employment is terminated without cause or is terminated by Mr. Colella for good reason, in either
case upon or at any time within two years following a
change-in-control,
Mr. Colella will receive a lump sum payment equal to 36 months of his base salary and three
times his target annual bonus amount, payment of any annual cash incentive plan bonus earned for the prior calendar year, but not yet paid, and continued participation in the Companys medical, dental, vision and life insurance plans for 36
months. In the event such payments are determined to be subject to an excise tax imposed by Section 4999 of the Internal Revenue Code, such payments will be payable in full or, if applicable, reduced so that no portion of the payments is
subject to the excise tax, whichever of the foregoing amounts results in receipt by Mr. Colella on an
after-tax
basis of the greater amount, taking into account all applicable taxes, including the penalty
tax. Mr. Colella is not entitled to any
gross-up
payment for any such excise tax due on such payments.
The Employment Agreement requires Mr. Colella to return all or a portion of any incentive pay, and any severance payments computed by
reference thereto, for the performance period(s) in which his termination of employment occurs and any performance period ending within the 36 month period prior to his termination of employment, if it is later determined that these awards were
calculated on the basis of inaccurate information that results in a restatement of our financial statements, or for other required reasons.
The Employment Agreement provides that Mr. Colella may not, during the term of his employment and for a period of one year after
termination of employment (or two years in the event Mr. Colella terminates his employment other than for good reason), (i) engage in any competitive business or activity, (ii) work for any person who was our executive, officer or agent,
or establish any business or partnership with such person that is competitive to the Company, (iii) give, sell or lease any competitive services or goods to any of our customers, or (iv) have any material financial interest in or be a
director, officer, partner, executive or consultant to, or exceed specified shareholding limitations in, any of the Companys competitors.
Mr. Colella is also subject to
non-solicitation
restrictions. During the term of his employment
and for a period of two years after termination, Mr. Colella may not solicit any customer to become a customer, distributor or supplier of any other person or entity or to cease doing business with the Company; or solicit or hire any of our
executives, officers or agents to terminate such persons employment or engagement with the Company or to work for a third party.
In
addition, the Employment Agreement continues to provide Mr. Colella with the same supplemental retirement benefits he was entitled to before his appointment as Chief Executive Officer. The benefits vest (a) upon Mr. Colella reaching
both (i) specified ages, and (ii) 25 years of service with the Company, in each case while employed by the Company, or (b) upon his earlier death, disability, termination without cause (cause is defined as a conviction for the commission
of a felony, material breach of any employment or other agreements between the executive and the Company, or willful failure by the executive to perform his material responsibilities to the Company) or a qualifying termination for good
reason within three years of a
change-in-control
(as defined in the agreement), and are forfeited in the event of termination prior to vesting as described above,
termination for cause or upon violation of the noncompetition, nondisclosure, or nonsolicitation provisions contained in the Employment Agreement. When vested, subject to his execution of and compliance with a customary release, the supplemental
retirement benefit provides for a lump sum payment to Mr. Colella (or in the event of his death, his spouse) of an aggregate amount calculated based upon actuarial assumptions, payable not sooner than six months after the date of termination
(except in the case of death). The benefit amount is determined based upon the actuarial equivalent value of an annuity equal to 50% of Mr. Colellas final average compensation, which is equal to the average of his three highest years of
compensation (salary plus bonus) during the 10 calendar years prior to the year of retirement (or other qualifying termination). The actuarial calculations include assumptions for decreased benefit continuation (determined as a 50% survivor annuity)
for
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