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receive the three times base salary and non-equity
incentive award as described above. Mr. Cloninger has
earned the maximum SERP benefit and, therefore,
would not receive this amount. Amounts payable upon
a change of control will be reduced to the extent that
they are not deductible by the Company for income tax
purposes.
A “change in control” is generally deemed to occur
when (i) a person or group acquires ownership of 50%
or more of the Company’s Common Stock; (ii) a person
or group acquires ownership of 30% or more of the
Company’s Common Stock over a consecutive twelve
month period; (iii) during any period of twelve
consecutive months, individuals who constitute the
Board are replaced without endorsement by a majority
of the Board members at the beginning of the period; or
(iv) a person or group acquires ownership of 40% or
more of the total gross fair market value of the
Company’s assets.
Each of Messrs. Cloninger and Paul S. Amos II is a
participant in the SERP. Mr. Paul S. Amos II is not fully
vested under the SERP. Under the SERP, in the event
that that the Company terminates a participant’s
employment within two years after a “change in control”
of the Company other than for cause, or a participant
terminates his employment during such period for “good
reason,” the participant will become 100% vested in his
retirement benefits and entitled to receive a lump-sum
amount equal to the actuarial equivalent of the annual
retirement benefit to which he would have been entitled
had he remained in the employ of the Company until (i)
age 55 (in the case of a participant who is not yet 55);
(ii) age 60 (in the case of a participant who is at least
55, but not yet 60); or (iii) age 65 (in the case of a
participant who is at least 60, but not yet 65), as the
case may be. A “change in control” will be deemed to
occur under the same circumstances described in the
paragraph above but only with respect to the Company
(and not with respect to any of its subsidiaries). “Cause”
for this purpose generally means (i) the participant’s
continued failure to substantially perform his duties with
the Company (other than that resulting from illness or
after a participant gives notice of termination of
employment for “good reason”) after a written demand
for substantial performance is delivered to the
participant by the Board, (ii) the participant’s engaging
in conduct materially injurious to the Company, or (iii)
the participant’s conviction of, or plea of guilty or no
contest to a felony or crime involving moral turpitude.
“Good reason” is defined for this purpose to include
various adverse changes in employment status, duties,
or compensation and benefits following a “change in
control.”
The following table reflects the amount of compensation
payable to each of the NEOs in the event of termination
of such executive’s employment under various
termination scenarios. The amounts shown assume in
all cases that the termination was effective on
December 31, 2015, and therefore include amounts
earned through such time and estimates of the amounts
which would be paid to the NEOs upon their
termination. Mr. Kirsch’s employment agreement as in
effect on December 31, 2015, renews each January 1
for an additional one-year period, unless the Company
notifies him in writing of its intent to terminate the
agreement prior to such renewal date. If the Company
had notified Mr. Kirsch of its intent to terminate the
agreement on December 31, 2015, or if his employment
had terminated on that date, Mr. Kirsch would not have
been entitled to salary continuation or other severance
benefits under his employment agreement, and
therefore no such amounts are shown in the table
below. Mr. Kirsch entered into a new agreement
effective January 1, 2016 which provides for additional
termination and change of control compensation and
benefit provisions, but those provisions are not reflected
in the table because they were not applicable as of
December 31, 2015. Due to the number of factors that
affect the nature and amount of any benefits under the
various termination scenarios, actual amounts paid or
distributed may be different. Messrs. Daniel P. Amos
and Cloninger are the only NEOs who are eligible to
receive immediate retirement benefits. See “Pension
Benefits” and “Nonqualified Deferred Compensation”
above for more information about these benefits.
As noted in the table that follows, the benefits provided
and requirements imposed vary with the circumstances
under which the termination occurs. Additional relevant
information is provided under “Pension Benefits” and
“Nonqualified Deferred Compensation” above.
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