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Distributions attributable to discretionary contributions
are made in the form and at the time specified by the
Company.
A Participant may delay the timing and form of his or
her distributions attributable to his or her deferrals as
long as the change is made at least 12 months before
the initial distribution date. With respect to non-
grandfathered amounts, new elections also must satisfy
the additional requirements of Section 409A. In general,
Section 409A requires that distributions may not be
accelerated (other than for hardships) and any delayed
distribution may not begin earlier than five years after
the original distribution date.
Deferral amounts for which no distribution elections
have been made are distributed in a lump sum six
months after a Participant separates from service.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The Company has employment agreements with each
of the NEOs (although the agreement with Mr. Tonoike
expired on December 31, 2014). Except as described
below, the agreements are similar in nature and contain
provisions relating to termination, disability, death and a
change in control of the Company.
Mr. Daniel P. Amos, in the fourth quarter of 2008,
decided to voluntarily forgo all “golden parachute” and
other severance components in his employment
agreement (the provisions providing for special
payments in connection with a change in control of the
Company or other termination of employment). The
elimination of these potential payments to Mr. Daniel P.
Amos has been reflected in the following 2014 Potential
Payments Upon Termination or Change in Control
table.
For the remaining NEOs (other than Mr. Daniel P.
Amos), the Company remains obligated to continue
compensation and benefits to the NEO for the
scheduled term of the agreement if the employment of
the NEO is terminated by the Company without “good
cause” or by the NEO with “good reason.” Messrs.
Cloninger and Paul S. Amos II are not entitled to
continued compensation after earning the maximum
benefit under the SERP; Mr. Cloninger has earned the
maximum SERP benefit and, therefore, would not
receive continued compensation. In addition, except for
Mr. Kirsch, upon a termination by the Company without
good cause or by the NEO for good reason, all
outstanding equity awards become fully vested.
If the NEO’s employment is terminated by the Company
for “good cause,” or by the NEO without “good reason,”
the Company is generally obligated to pay
compensation and benefits only to the date of
termination (except that the NEO, to the extent
otherwise eligible, is entitled to benefits under the
RPSO or SERP if the termination is not for “good
cause”). “Good cause” generally means (i) the willful
failure by the NEO to substantially perform his
management duties for more than 60 days, (ii)
intentional conduct by the NEO causing substantial
injury to the Company, or (iii) the conviction of or plea of
guilty by the NEO to a felony crime involving moral
turpitude. “Good reason” is defined to include (i) a
material breach of the agreement, (ii) a material
diminution or change in the NEO’s title, duties, or
authority, or (iii) a material relocation of the Company’s
principal offices. Upon voluntary termination without
“good reason” or termination by the Company for “good
cause,” the NEO is prohibited for a two-year period from
directly or indirectly competing with the Company.
The employment agreements of the NEOs (with the
exception of Mr. Kirsch) provide that compensation and
benefits continue for certain specified periods in the
event that the NEO becomes totally disabled although
the amount of continued compensation for Messrs.
Kriss Cloninger and Paul S. Amos II will be reduced by
60% if they are eligible for the maximum benefit
percentage under the SERP. Upon the death of the
NEO (other than Mr. Kirsch), his estate is to be paid an
amount, payable over a three-year period, equal to the
NEO’s base salary and any non-equity incentive award
actually paid during the last three years of his life.
Upon a “change in control” of the Company, the
employment agreements of the NEOs (with the
exception of Messrs. Daniel P. Amos and Kirsch) are
extended for an additional three-year period. If,
following a change in control, the NEOs’ (with the
exception of Messrs. Daniel P. Amos and Kirsch)
employment with the Company is terminated by the
Company without “good cause” or by the NEO for “good
reason,” the Company must pay to the NEO, among
other payments but in lieu of any further salary
payments subsequent to the date of termination, a
lump-sum severance payment equal to three times the
sum of the NEO’s base salary and non-equity incentive
award under the MIP (as paid during periods specified
in the agreement). If either of Messrs. Cloninger or
Paul S. Amos II has attained the maximum benefit
percentage under the SERP at the time of his
termination following the change in control, he will not
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