are not subject to reduction for Social Security payments or other offset amounts. For a discussion of valuation assumptions, see Note 18 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.
As previously discussed, Mr. McBride resigned from the company on August 31, 2018. He also worked for Frontier before the Frontier Pension Plan was frozen.
Employment Arrangements; Potential Payments upon Termination or Change-in-Control
Employment Agreements and Arrangements
Frontier is party to an employment agreement with Mr. McCarthy, Mr. Maduri, Mr. Gable, and Mr. Arndt and each agreement has been publicly filed with the SEC. In accordance with best practices, the agreements do not provide for a set term of employment.
Each NEO receives a base salary and is entitled to participate in the Frontier Bonus Plan and our 2013 and 2017 Equity Incentive Plans. In addition, each NEO is entitled to severance benefits under our Severance Plan.
Potential Payments upon Termination of Employment or Change-in-Control
The following summarizes potential payments that would be made under the Companys Severance Plan or the NEOs employment agreement, as applicable, upon a termination of employment or change-in-control as of December 31, 2018.
If Mr. McCarthys employment is terminated without cause or by Mr. McCarthy with good reason, we would be required to pay Mr. McCarthy an amount equal to the non-change in control severance factor applicable to Mr. McCarthy (as set forth below) multiplied by the sum of his base salary and target bonus. In addition, all his restricted shares would vest, and all performance share awards granted to him or any other performance incentive award pursuant to a performance-based vesting schedule would be vested with respect to any service requirement, but the number of shares earned would be based on actual performance against the pre-established goals. In addition, in such circumstances, Mr. McCarthy would be entitled to an amount equal to 18 times the monthly COBRA charge for the type of employer-provided health coverage in effect for him.
With respect to our other active NEOs, if the executives employment is terminated without cause or by the NEO with good reason, we would be required to pay the executive an amount equal to the non-change in control severance factor applicable to the executive (as set forth below) multiplied by his or her base salary. The executive would also be entitled to purchase from Frontier three months of subsidized COBRA coverage at the active employee rate.
If Mr. McCarthys employment is terminated due to his death or in connection with a disability, Mr. McCarthy or his estate would be entitled to payment of six months base salary (paid in installments as salary continuation pursuant to our standard payroll practices) and a prorated portion of his target bonus for the year of termination (paid in lump sum). In addition, all restricted shares would vest, and performance shares would vest pro-rata, based on time served through the date of termination at the target level of shares granted. Mr. McCarthy, or his spouse, in the event of Mr. McCarthys death, would also be entitled to an amount equal to 18 times the monthly COBRA charge for the type of employer-provided coverage in effect for Mr. McCarthy.
In the event Mr. McCarthys employment is terminated without cause or by Mr. McCarthy with good reason in connection with a change in control, Mr. McCarthy would be entitled to the amounts he would receive in connection with a termination by us without cause or by him with good reason in a non-change in control context, except that (a) the change in control severance factor would apply as set forth below and (b) the number of earned performance shares would be based on actual performance as of the date of the change in control (if determinable), otherwise based on target performance, and these earned shares would vest at the time of the qualifying termination. In addition, if the successor following a change in control declines to assume Frontiers obligations with respect to Mr. McCarthys performance shares, the earned performance shares would vest upon the change in control, regardless of whether his employment was terminated.