payments and benefits described in this section are subject to the NEOs compliance with certain restrictive covenant obligations, including non-competition, non-solicitation of employees and non-solicitation of customers ranging from 12 to 18 months following the termination of employment.
CHANGE IN CONTROL AND CHANGE IN CONTROL SEVERANCE
Change in Control Without Termination
We provide certain cash amounts and equity award vesting in the event of a change of control without a corresponding termination. In this scenario, each of the NEOs would 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 change in control.
Any outstanding restricted stock, RSUs or NQSOs would fully vest as of the date of a change in control. Additionally, any outstanding PUP awards or PSUs (in the case of Mr. Moster) would be paid at a 100% achievement level, prorated from the grant date of such award to the date of the change in control.
To the extent assumed or replaced by an acquirer, Mr. Barry’s PNQSOs would remain outstanding and eligible to vest and become exercisable based on the achievement of applicable performance goals during the applicable performance period. If the PNQSOs were not assumed or replaced, they would vest and become exercisable at the time of the change of control. As of the date of the change in control, any outstanding PRSU awards to Mr. Moster and Ms. Ingersoll that have achieved the applicable price per share goal would remain outstanding and eligible to vest based on continued service.
Change in Control With Termination
In 2021, all of our NEOs participate in the Executive Severance Plan (Tier I) (the “Executive Severance Plan”), which we adopted in 2013. Under the Executive Severance Plan, a participating NEO is eligible for severance benefits if we terminate the NEO without cause or resignation by the executive for good reason (as those terms are defined in the Executive Severance Plan) within 36 months after a change in control. Under those circumstances, the executive would receive a lump-sum payment, as severance compensation, equal to a multiple of the following sum:
• | The NEO’s highest annual salary during his or her employment term; plus |
• | The NEO’s target cash bonus under the MIP for the fiscal year in which the change in control occurs. |
The multiple is equal to the product of three times a fraction, the numerator of which is 36 minus the number of full months the NEO was employed following a change in control and the denominator of which is 36.
Pursuant to the MIP, upon a change in control, each of the NEOs would be entitled to receive a pro-rata portion of the annual cash incentive granted under the MIP for the year in which the change in control occurs, calculated based on the achievement of performance measures through the date of the change in control.
Any outstanding restricted stock, RSUs, NQSOs and PNQSOs would fully vest as of the date of a termination in connection with a change in control. Any outstanding PUP awards or PSUs (in the case of Mr. Moster) would be paid at a 100% achievement level, prorated from the grant date of such award to the date of the change in control. Any outstanding PRSUs held by Mr. Moster or Ms. Ingersoll that have achieved the applicable price per share goal would vest as of the date of their termination. The remaining unearned PRSUs would remain outstanding and eligible to vest if the termination occurred within 30 days prior to the change in control.
The NEO’s participation in any life, health, and automobile benefits will continue at the same cost as if the NEO was an employee for a prorated three-year period. The NEO would also be eligible for outplacement services. The Executive Severance Plan does not contain any tax gross-up or modified single-trigger provisions.
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