59 / 68
receive the three times base salary and non-equity
incentive award as described above. 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. Under the SERP, in the event
that a participant’s employment with the Company is
terminated within two years after a “change in control”
of the Company other than for death, disability or
cause, or a participant terminates his employment
during such period for “good reason,” the participant
becomes 100% vested in his retirement benefits and is
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” shall generally occur under the same
circumstances described in the paragraph above.
“Cause” for this purpose generally means (i) the
participant’s willful 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 or (ii) the willful engaging by
the participant in conduct materially injurious to the
Company. “Good reason” is defined for this purpose to
include various adverse changes in employment status,
duties, and/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, 2014, 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
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,
2014, 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. Tonoike is
currently employed by the Company without an
employment agreement. Although the amounts shown
on the table that follows include all amounts that Mr.
Tonoike would have been entitled to if his employment
had terminated on December 31, 2014, upon his actual
termination of employment he will not be entitled to
continued compensation and benefits and other
payments that were provided for solely under his
employment agreement. 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,
Cloninger and Tonoike 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.
55