Executive Officer Termination Benefits
We are parties to employment agreements with each of our executive officers. The employment agreements provide for certain termination benefits in the event that the employment of our executives is terminated by us without “cause,” by the executive for “good reason,” or if the termination of employment is due to death or disability of the executive officer during his or her employment. Our outstanding RSUs and PRSUs also provide for acceleration upon the termination of our executive officers’ employment under certain circumstances. These benefits are described below.
We were also a party to an employment agreement with Jeffrey Pyatt, our former Chief Executive Officer, prior to his resignation from such position. Mr. Pyatt’s employment agreement was consistent with the agreements of the other executive officers, except as otherwise noted below.
Termination of Employment without Cause or for Good Reason
Pursuant to each executive officer’s employment agreement, the executive officer is entitled to receive such officer’s base salary and Company group healthcare premiums as severance pay if we terminate the executive officer’s employment without “cause,” or the executive officer resigns for “good reason.”
“Cause” is defined in the employment agreement to include certain actions by the executive officer including: (i) fraud, theft, intentional dishonesty, or breach of fiduciary duty with respect to the Company or subsidiary, (ii) gross negligence or willful misconduct in the performance of duties, (iii) failure to follow a reasonable directive of the Board or officer to whom the person reports, (iv) material breach of the employment agreement, including violations of non-disclosure, non-compete and non-solicit provisions or (v) conviction or indictment with respect to any felony or any crime involving an act of moral turpitude, or pleading guilty, no contest or nolo contendere with respect to any such crime.
“Good reason” is defined in the employment agreement to include events with respect to an executive officer such as (i) a material diminution in the individual’s duties or title, (ii) a material breach by the Company of the employment agreement, (iii) a relocation of the executive officer’s place of employment more than a certain specified distance without his or her consent, (iv) a reduction in target annual bonus or (v) reduction in annual salary except as part of an across the board reduction for senior executives.
In the event that we terminate an executive officer’s employment without cause, or the officer resigns employment for good reason, then contingent upon the execution of a full release of claims, the executive officer will be entitled to receive such executive officer’s base salary in regular installments in accordance with the Company’s general payroll practice, and Company group healthcare premiums, paid on a monthly basis, for the following periods:
Brian Ward | | | 12 |
David Schneider | | | 12 |
Nevin Boparai | | | 12 |
Linda Koa | | | 6 |
Daniel Hirsty | | | 6 |
Mr. Pyatt’s former employment agreement provided that he would receive the above benefits for a 24 month period.
Termination of Employment due to Death or Disability
In the event that an executive officer’s employment terminates as a result of death or disability, such officer and his or her family, in the event of termination due to disability, or the family, in the event of termination due to death, will be entitled to receive Company group healthcare premiums, paid on a monthly basis for a period of twelve months for Messrs. Ward, Schneider and Boparai, and formerly Mr. Pyatt, and six months for Ms. Koa and Mr. Hirsty. Additionally, if employment is terminated due to death or disability, then any unvested service based RSUs issued to such executive officer will fully vest as of the date of such termination, and PRSUs will vest on a pro-rated basis based upon performance during the full three year performance period, and will be paid at the same time as other holder of the applicable PRSUs.
Termination in Connection with or Following a Change in Control
In the event that an executive officer’s employment is terminated without cause in connection with, or within 30 days before, or during the 24 month period following, a “Change in Control” of the Company (the “Change of Control