Document:

ufs-ex106_220.htm

 

 

Exhibit 10.6

PERFORMANCE SHARE UNIT AGREEMENT 

FOR AWARDS GRANTED IN 2016

PERFORMANCE SHARE UNIT AGREEMENT (the “Agreement”) dated as of the Grant Date set forth in the Notice of Grant (as defined below), by and between Domtar Corporation, a Delaware corporation (the “Company”), and the participant whose name appears in the Notice of Grant (the “Participant”).

1.  Grant of Performance Share Units.  The Company hereby evidences and confirms its grant to the Participant, effective as of the Grant Date, of the number of performance-based restricted stock units (the “Performance Share Units”) specified in the Domtar Corporation 2007 Omnibus Incentive Plan Performance Share Unit Grant Notice delivered by the Company to the Participant (the “Notice of Grant”).  This Agreement is subordinate to, and the terms and conditions of the Performance Share Units granted hereunder are subject to, the terms and conditions of the Amended and Restated Domtar Corporation 2007 Omnibus Incentive Plan (the “Plan”), which are incorporated by reference herein.  If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern.  Any capitalized terms used herein without definition shall have the meanings set forth in the Plan.  The Performance Share Units shall be considered Performance Awards under the Plan.

2.  Vesting of Performance Share Units.  

(a)  Vesting.  Except as otherwise provided in this Section 2, the Performance Share Units shall become vested, if at all, on the vesting date(s) set forth in the Notice of Grant (each, a “Vesting Date”), subject to the continued employment of the Participant by the Company or any Subsidiary thereof through such date, and to the achievement of the Performance Goals (the “Goals”) established by the Committee pursuant to the Plan for the Performance Share Units for the performance period(s) (each a “Performance Period”) set forth in the Notice of Grant.  As soon as feasible after the end of each Performance Period, the Committee will determine whether the Goals have been satisfied, in whole or in part.  Based upon the foregoing determination, the number of Performance Share Units will vest on the Vesting Date on a percentage basis, as set forth in the Notice of Grant.  Performance Share Units that have not vested by the Vesting Date in accordance with this Section 2 shall be forfeited.  

(b)  Termination of Employment.  

(i)  Death.  If the Participant’s employment is terminated due to death prior to the end of a Performance Period, 100% of the Performance Share Units relating to such Performance Period, multiplied by a fraction, the numerator of which is the number of days elapsed from the commencement of the Performance Period through the date of the Participant’s death and the denominator of which is the number of days in the Performance Period, shall become fully vested and 

 

 

nonforfeitable and shall be paid as provided in Section 3.  If the Participant’s employment is terminated due to death after the end of any Performance Period but prior to the settlement date, the Participant shall be entitled to receive, and such Performance Share Units shall be deemed vested to the extent of, the number of shares of Stock that would have been payable with respect to the Performance Share Units relating to such Performance Period had the Participant’s Service continued until the settlement date, subject to achievement of the Goals, and the remainder of such Performance Share Units shall be forfeited and canceled as of the date of termination.

(ii)  Disability or Retirement.  If the Participant’s employment is terminated due to Disability or Retirement prior to the Vesting Date, then, on the Vesting Date the Participant shall be deemed vested to the extent of the number of Performance Share Units that would have vested had the Participant’s Service continued until the Vesting Date, subject to achievement of the Goals, multiplied by a fraction, the numerator of which is the number of days elapsed from the commencement of the Performance Period through the date of the Participant’s termination due to Disability or Retirement, as applicable, and the denominator of which is the number of days in the Performance Period, and the remainder of the Performance Share Units shall be forfeited and canceled as of the date of such termination due to Disability or Retirement, as applicable.  Vested Performance Share Units shall be settled as set forth in Section 3.

(iii)  Any Other Reason.  If the Participant’s employment is terminated prior to the Vesting Date for any reason other than death, Disability or Retirement, all Performance Share Units shall immediately be forfeited and canceled effective as of the date of the Participant’s termination.

(c)  Change in Control.  In the event of a Change in Control, then the Performance Share Units shall vest or continue as set forth in the Plan.

(d)  Committee Discretion.  Notwithstanding anything contained in this Agreement to the contrary, the Committee, in its sole discretion, may accelerate the vesting with respect to any Performance Share Units under this Agreement, at such times and upon such terms and conditions as the Committee shall determine.

3.  Settlement of Performance Share Units.  Subject to Section 7(d), the Company shall deliver to the Participant the value of one share of Stock in settlement of each outstanding Performance Share Unit that has vested as provided in Section 2 on the first to occur of (i) as soon as practicable after the date (the “Committee Determination Date”) that the Committee determines that the Goals for the last Performance Period(s) have been satisfied, but in no event later than 21⁄2 months after the end of the Performance Period; (ii) in the event of a Termination of Service due to death, January 31 of the year following the Participant’s Termination of Service, (iii) with respect to Performance 

2

 

 

Share Units that are not a Specified Award, a Change in Control in which the Performance Share Units do not continue, and (iv) with respect to Performance Share Units that are a Specified Award, a Specified Change in Control, in each case (A) by a cash payment equal to the Fair Market Value of the Stock on the Committee Determination Date or (B) if the Participant is a member of the Management Committee, at the Company’s sole discretion, in Stock, by either (1) issuing one or more certificates evidencing the Stock to the Participant or (2) registering the issuance of the Stock in the name of the Participant through a book entry credit in the records of the Company’s transfer agent or (C) in the event of settlement upon a Change in Control or a Specified Change in Control, as applicable, a cash payment equal to the Change in Control Price, in each case, multiplied by the number of vested Performance Share Units.  With respect to Specified Awards, in the event of a Change in Control that is not a Specified Change in Control, if no Alternative Awards are available, or Alternative Awards may not be issued in a manner that complies with Section 409A of the Code or without the imposition of any additional taxes or interest under Section 409A of the Code, the Committee, as constituted immediately prior to the Change in Control, may determine that Specified Awards shall be settled through a cash payment equal to the Change in Control Price multiplied by the number of vested Specified Awards plus interest from the later of the Vesting Date and the Change in Control through the date of payment at a rate determined by the Committee as constituted immediately prior to the Change in Control to the extent that such settlement shall not subject the Participant to any additional taxes or interest under Section 409A of the Code or in such other manner that shall comply with Section 409A of the Code.  No fractional shares of Stock shall be issued in settlement of Performance Share Units.  Fractional Performance Share Units shall be settled through a cash payment equal to the Fair Market Value of the Stock on the  Committee Determination Date.

4.  Securities Law Compliance.  Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Stock acquired upon vesting of the Performance Share Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act.  The sale of such shares must also comply with other applicable laws and regulations governing the shares and Participant may not sell the shares of Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

5.  Participant’s Rights with Respect to the Performance Share Units.

(a)  Restrictions on Transferability.  The Performance Share Units granted hereby are not assignable or transferable, in whole or in part, and may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including without limitation by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the 

3

 

 

Participant upon the Participant’s death; provided that the deceased Participant’s beneficiary or representative of the Participant’s estate shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant.

(b)  No Rights as Stockholder.  The Participant shall not have any rights as a stockholder including any voting, dividend or other rights or privileges as a stockholder of the Company with respect to any Stock corresponding to the Performance Share Units granted hereby unless and until shares of Stock are issued to the Participant in respect thereof.  

6.  Adjustment in Capitalization.  The number, class, Performance Goals or other terms of any outstanding Performance Share Units shall be adjusted by the Board to reflect any extraordinary dividend, stock dividend, stock split or share combination or any recapitalization, business combination, merger, consolidation, spin-off, exchange of shares, liquidation or dissolution of the Company or other similar transaction affecting the Stock in such manner as it determines in its sole discretion.

7.  Miscellaneous.

(a)  Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns.  Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(b)  No Right to Continued Employment.  Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries.

(c)  Interpretation.  The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award.  Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

(d)  Tax Withholding.  The Company and its Subsidiaries shall have the right to deduct from all amounts paid to the Participant in cash (whether under the Plan or otherwise) any amount of taxes required by law to be withheld in respect of settlement of the Performance Share Units under the Plan as may be necessary in the opinion of the Employer to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital 

4

 

 

gains taxes, transfer taxes, and social security contributions that are required by law to be withheld.  The Company may require the recipient of the cash or shares of Stock, as applicable, to remit to the Company an amount in cash sufficient to satisfy the amount of taxes required to be withheld as a condition to the payment of cash or issuance of shares in settlement of the Performance Share Units.  The Committee may, in its discretion, require the Participant, or permit the Participant to elect, subject to such conditions as the Committee shall impose, to meet such obligations by having the Company withhold from the cash payment in settlement of the Performance Share Units or withhold or sell the least number of whole shares of Stock having a Fair Market Value sufficient to satisfy all or part of the amount required to be withheld.  The Company may defer settlement until such requirements are satisfied.

(e)  Forfeiture for Financial Reporting Misconduct.  If the Company is required to prepare an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct or knowingly or grossly negligently failed to prevent the misconduct as determined by the Committee, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, then the Participant shall forfeit and disgorge to the Company (i) any Stock and cash received in respect of Performance Share Units granted or vested and all gains earned or accrued due to the sale of any Stock received in settlement of the Performance Share Units during the 12-month period following the filing of the financial document embodying such financial reporting requirement and (ii) any Stock and cash received in respect of Performance Share Units that vested based on the materially non- complying financial reporting.  The Company may also cancel or reduce, or require a Participant to forfeit and disgorge to the Company or reimburse the Company for, any Performance Share Units granted or vested and any gains earned or accrued, due to the vesting or settlement of Performance Share Units or sale of any Stock acquired in settlement of a Performance Share Unit, to the extent permitted or required by, or pursuant to any Company policy implemented as required by, applicable law, regulation or stock exchange rule as from time to time may be in effect (including but not limited to The Dodd–Frank Wall Street Reform and Consumer Protection Act and regulations and stock exchange rules promulgated pursuant to or as a result of such Act).

(f)  Applicable Law.  This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(g)  Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.  By entering into this Agreement and accepting the Performance Share Units evidenced hereby, the Participant acknowledges: (a) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) that the Award does not create any contractual or other right to receive future grants of Awards; (c) that participation in the Plan is voluntary; (d) that the value of the Performance Share 

5

 

 

Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and (e) that the future value of the Stock is unknown and cannot be predicted with certainty. 

(h)  Employee Data Privacy.  By entering into this Agreement and accepting the Performance Share Units evidenced hereby, the Participant: (a) authorizes the Company and the Participant’s employer, if different, any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; (b) waives any data privacy rights the Participant may have with respect to such information; and (c) authorizes the Company and its agents to store and transmit such information in electronic form.

(i)  Consent to Electronic Delivery.  By entering into this Agreement and accepting the Performance Share Units evidenced hereby, Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Performance Share Units via Company web site or other electronic delivery.

(j)  Specified Employee Delay.  Notwithstanding anything to the contrary in this Agreement, if settlement is to occur upon a Termination of Service other than due to death or Disability and the Participant is a Specified Employee and the Performance Share Units are a Specified Award, to the extent necessary to comply with, and avoid imposition on the Participant of any additional tax or interest imposed under, Section 409A of the Code, settlement shall instead occur on the first business day following the six-month anniversary of the Participant’s Termination of Service (or, if earlier, upon the Participant’s death), or as soon thereafter as practicable (but no later than 90 days thereafter). 

(k)  Headings and Captions.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(l)  Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

6ufs-ex107_221.htm

 

 

Exhibit 10.7

 

		
	

	
SEVERANCE PROGRAM FOR MANAGEMENT COMMITTEE MEMBERS

 

Purpose

	
1.1
	
This severance program is designed to provide eligible executives with guidelines relative to the benefits they would receive upon an involuntary termination of employment for business reasons whether or not in connection with the occurrence of a Change in Control in order to allow for equitable, objective and uniform treatment of similar situations.

Key Elements

	
2.1
	
This severance program is composed of the following key elements which will be offered in whole or in part by Domtar Corporation or its subsidiaries (the “Corporation”), depending on each situation:

•Severance allowance;

•Maintenance of medical and dental benefits;

•Outplacement services.

 

Any entitlement to payments or benefits other than those specifically addressed in this severance policy shall be determined in accordance with the applicable plan or policy.  

Eligible Executives

	
3.1
	
An executive is eligible for this severance program if he or she is a member of the Management Committee of the Corporation (as duly appointed by the Board of Directors of the Corporation (the “Board”) upon recommendation of the Corporation’s Chief Executive Officer), if the executive’s employment (a) is involuntarily terminated for business reasons by the Corporation or (b) in connection with a Change in Control is involuntarily terminated by the Corporation without Cause or is terminated by the executive due to Good Reason, and in all cases the executive executes, delivers and does not revoke within the applicable statutory time period, a written release in a form satisfactory to the Human Resources Committee of the Board (such committee, the “HR Committee” and any such release, a “Release”);  provided that this program does not apply to those executives for whom another program, agreement or arrangement is applicable or has been approved.  An executive will no longer be eligible for this severance program upon cessation of his or her service as a member of the Management Committee for reasons other than those listed in this paragraph. 

 

	
3.2
	
This severance program will not be offered if the executive:

	
 
	
•
	
is dismissed for cause;

	
 
	
•
	
terminates employment voluntarily (other than for Good Reason in connection with a Change in Control as contemplated by Section 7.5); or

	
 
	
•
	
is offered continuous employment in a position with comparable terms and conditions of employment by a purchaser of a business from the Corporation.  

Effective Date of Program

	
4.1
	
This severance program will take effect March 7, 2007.

Restriction

	
5.1
	
If on the date an executive’s employment is terminated the executive is receiving benefits under the Corporation’s Short-Term or Long-Term Disability Plans, the executive will not be entitled to a severance allowance under this program.  However, if the executive ceases to be eligible for those benefits for reasons other than retirement, the executive will be entitled to the severance program if he or she regains the ability to carry out his or her duties prior to the effective date of his or her termination of employment.

Administration

	
6.1
	
This program will be administered by the HR Committee, whose actions and decisions will be conclusive and binding on the executive and on the Corporation.

	
6.2
	
Domtar reserves the right to terminate, delete, amend or add to this policy or any of its provisions at any time and from time to time.

Severance Allowance

	
7.1
	
An eligible executive shall be entitled to a severance allowance of 12 months of base salary, plus an additional 3 months of base salary for each full year of continuous service as a member of the Management Committee, up to a maximum of 24 months of base salary (the “Severance Period”), unless otherwise determined by the HR Committee, upon recommendation of the Corporation’s Chief Executive Officer.

	
7.2
	
The base salary used to calculate an executive’s severance allowance will be the executive’s base salary on the date his or her employment is terminated.  The minimum payments as outlined by the different provincial legislations will be paid within the time limit prescribed by the applicable legislation.  The remaining balance will be paid in a lump sum or in accordance with our normal payroll practices during the Severance Period, as decided upon by the person responsible for the termination, except if the executive’s severance allowance is subject to Section 409A, the remaining balance shall be paid as described below under the heading ”Provisions Applicable to U.S. Taxpayers.”

	
7.3
	
The severance allowance pursuant to this program shall not be less than that required by the applicable legislation.  However, this severance program shall not be interpreted or applied as a minimum severance allowance.

2

 

	
7.4
	
The severance allowance pursuant to this program includes any pay in lieu of notice and severance pay required by law.  

	
7.5
	
Notwithstanding the allowance amounts described above, if,within 3 months prior to or 24 months following the occurrence of a Change in Control, an executive’s employment is involuntarily terminated without Cause or the executive voluntarily terminates his or her employment for Good Reason, the severance allowance will be equal to the sum of (A) 24 months of base salary and (B) two (2) times the executive’s target bonus award under the Domtar Corporation Annual Incentive Plan (“AIP), regardless of the employee’s actual continuous service as a member of the Management Committee. For this purpose, the Severance Period will be equal to 24 months, and base salary and target bonus award shall be as of the date of termination or the occurrence of the Change in Control, whichever is greater.

The following definitions apply:

	
 
	
(1)
	
“Cause” will have the same definition as in the Domtar Corporation 2007 Omnibus Incentive Plan (“Omnibus Plan”).

	
 
	
(2)
	
“Change in Control” will have the same definition as in the Omnibus Plan.

(3) “Good Reason” means the occurrence of any of the following after a Change in Control: 

(a) a material reduction by the Corporation in the executive’s base salary or target annual bonus, as in effect immediately prior to the Change in Control or as increased from time to time. Executive shall not have a basis to resign for Good Reason if (i) such reduction is part of an across-the-board reduction in base salary rate or target annual incentive opportunity similarly affecting other Management Committee members or (ii) no bonus is paid, or the amount of the bonus is reduced as a result of the failure of the executive or the Corporation to achieve the applicable performance goals; 

(b) a material diminution in the executive’s position, duties or responsibilities (including due to the assignment to the executive of duties materially inconsistent with his or her position, duties or responsibilities as in effect immediately prior to Change in Control), excluding for this purpose (i) a change in title or reporting relationship alone, and (ii) an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Corporation promptly after receipt of notice thereof given by the executive; 

(c) a requirement that the executive move his or her principal place of business to a location that is (i) more than 50 miles from the location at which the executive was stationed immediately prior to a Change in Control, and (ii) farther from the executive’s primary residence than was the location at which the executive was stationed immediately prior to the Change in Control; and

(d) a material breach by the Corporation of any agreement under which the executive provides services:

in each case, provided that the executive provides written notice to the Corporation of the condition giving rise to good Reason within 90 days of the initial existence of the condition, such condition is not remedied within 30 days of receipt of such notice, and the executive terminates employment within two years of the occurrence of the Change in Control.

3

 

	
 
	
(4)
	
The term “Corporation” as used in this severance program shall mean the Corporation as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by this severance program.

Annual Incentive Plan

	
8.1
	
An executive who has been involuntarily terminated by the Corporation for business reasons, whether or not in connection with a Change in Control, or who in the three months prior to or 24 months following a Change in Control has terminated his or her employment for Good Reason or has been terminated by the Corporation without Cause will be eligible for a prorated bonus under the Domtar Corporation Annual Incentive Plan (“AIP”) for the year in which the termination of employment occurred.  Payment will be based on the pre-established goals under the AIP for the applicable plan year and the executive’s performance.  It will be calculated prorated on base salary earned during the year of termination. Payment will be made the year following termination at the same time as payment is made to all other employees and in any event no later than March 15 of such calendar year.  In situations where an executive is terminated prior to the payment of the previous year’s AIP, he/she will also be eligible for payment of the previous year’s AIP, which will also be paid at the same time payment is made to all other employees under the AIP and in any event no later than March 15 of the year following the year in which the related services were performed.  

Other Benefits

	
9.1
	
A terminated executive’s coverage under the Corporation’s medical and dental insurance policies will remain in effect until the last day of the Severance Period, except if the executive’s benefits are subject to taxation in the United States, as described below under the heading “Provisions Applicable to U.S. Taxpayers.”  In the event that the executive obtains equivalent or better coverage elsewhere, this coverage will terminate. 

	
9.2
	
Notwithstanding section 9.1 above, the group insurance coverage to which the executive was subject immediately prior to his/her termination will be maintained, to the extent provided by applicable law.

	
9.3
	
A terminated executive will be entitled to reasonable outplacement services.  This benefit will terminate in the event the executive obtains new employment.  In no event will this benefit continue beyond December 31 of the second year beginning after the date of termination.

Successors

	
10.1
	
Any successor of or to the Corporation, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), shall assume the obligations under this severance program in the same manner and to the same extent that the Corporation would be obligated under this severance program if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this severance program, the Corporation shall require such successor expressly and unconditionally to assume and agree to perform the Corporation’s obligations under this severance program, in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

4

 

Provisions Applicable to U.S. Taxpayers

	
11.1
	
Any payment or benefit provided under this program that is subject to U.S. taxation and section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the applicable rules, regulations and guidance promulgated thereunder (“Section 409A”), will only be paid or provided if the termination of an executive’s employment for business reasons by the Corporation or other termination entitling the executive to benefits under this severance program constitutes a “Separation from Service” within the meaning of Section 409A.  

	
11.2
	
Payments or benefits subject to Section 409A shall be administered and paid as follows: 

	

	
Subject to the execution and delivery by the executive of a Release within 45 days of the date of his or her Separation from Service and such Release becoming irrevocable (such execution and revocation period, the “Release Period”):

	
 
	
•
	
the portion of the executive’s severance allowance that is subject to Section 409A (after taking into account all exclusions applicable to the executive’s severance allowance under Section 409A) will be paid in a lump sum within 90 days of the date of the executive’s Separation from Service, but in no event later than March 15 of the calendar year following the calendar year in which the executive’s Separation from Service takes place provided that, if  such 90-day period spans more than one calendar year, the payment shall be made in the second calendar year.

	
 
	
•
	
If the executive would otherwise be eligible to elect continued health coverage under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”) (COBRA) (i) if permitted by the applicable plan and applicable law, the executive’s coverage under the applicable health insurance policies maintained by the Corporation will remain in effect or (ii) if not so permitted, the Corporation shall pay or reimburse the executive for the excess of the cost of COBRA coverage over what would have been the executive’s cost for continued coverage under the applicable health insurance policies had he or she been permitted to continue coverage, in each case until the earlier to occur of the last day of the Severance Period and the last day on which the executive would otherwise be eligible for COBRA coverage if he or she had elected such coverage and paid the applicable premiums.  In the event that the executive obtains equivalent or better coverage elsewhere, this coverage will terminate.

	
 
	
•
	
If the executive would not otherwise be eligible to elect COBRA coverage, the executive’s coverage under the applicable health insurance policies maintained by the Corporation will remain in effect until the earlier to occur of the last day of the Severance Period and the 18-month anniversary of the date of the executive’s Separation from Service.  In the event that the executive obtains equivalent or better coverage elsewhere, this coverage will terminate.

	
11.3
	
The amount of any reimbursement or in-kind benefit provided under this program in one taxable year shall not affect the amount of any reimbursement or in-kind benefit provided in any other taxable year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid).  Any reimbursement shall be paid to the executive on or before the last day of the taxable year following the taxable year in which the expense was incurred.  No entitlement to any reimbursement or in-kind benefit provided under this program shall be subject to liquidation or exchange for any other benefit.  

5

 

	
11.4
	
Notwithstanding anything to the contrary contained herein, if an executive is a “specified employee” within the meaning of any specified employee policy of the Corporation or, if no such policy is in effect at the time of termination, Section 409A, (i) any portion of an executive’s severance allowance under this policy that is subject to Section 409A (after taking into account all exclusions applicable to the executive’s severance allowance under Section 409A) and that would otherwise be payable or provided within six months following the date of the executive’s Separation from Service will be accumulated and paid on the first payroll date following the six-month anniversary of the date of the executive’s Separation from Service and (ii) the executive will pay the full cost of any non-COBRA health care benefits provided to him or her under Section 9.1 that are subject to Section 409A for the six-month period following the date of his or her Separation from Service, with the full amount of such costs to be reimbursed to the executive on the first payroll date following the six-month anniversary of the date of his or her Separation from Service, in each case to the extent necessary to comply with Section 409A.

	
11.5
	
Neither the Corporation nor any of its directors, officers or employees shall have any liability to an executive in the event Section 409A applies to any benefit provided pursuant to this policy in a manner that results in adverse tax consequences for such executive or any of his or her beneficiaries or transferees.  The HR Committee may unilaterally amend, modify or terminate any benefit provided under this policy if it determines, in its sole discretion, that such amendment, modification or termination is necessary or advisable to comply with applicable U.S. law as a result of changes in law or regulation or to avoid the imposition of an additional tax, interest or penalty under Section 409A.

 

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00267-of-00352.parquet"}]]