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GPS » Topics » Section 8. Termination Without Cause

This excerpt taken from the GPS 8-K filed Jan 23, 2007.

Section 8. Termination Without Cause

In the event that Executive’s employment as CEO is terminated during the Term by the Company due to a change in control or for any reason other than Cause as defined in Section 9(a) (the “Termination Decision”), subject to the provisions of Sections 8(b)-(e), Executive shall be entitled to receive the payments and benefits described in Section 8(a).

 

(a) Continuation Pay and Benefits. Executive shall remain a non-executive employee of the Company and shall receive the following during the twenty-four (24) months following the date of the Termination Decision (the “Continuation Period”):

 

  (1) Executive’s Base Compensation in effect on the date of the Termination Decision;

 

  (2) The Incentive Compensation Executive would otherwise have received based on the Company’s actual financial performance during the Continuation Period, up to a maximum payment equal to 100% of Executive’s Base Compensation on the date of the Termination Decision, payable if and when paid to other executives;

 

  (3) The vesting of those stock options granted to Executive in Section 5(a) that would vest during the anticipated Continuation Period will accelerate to the date of the Termination Decision and Executive will have three months from the date of the Termination Decision in which to exercise such accelerated options. All stock options with vesting dates two years beyond the date of the Termination Decision will be cancelled immediately; and

 

  (4) Health insurance coverage as provided to other senior executives by the Company.

 

(b) Release of Claims. As a condition to the receipt of the payments and benefits described in this Section, Executive shall be required to execute a release of all claims arising out of Executive’s employment and the termination of employment.

 

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(c) Conditions to Receipt of Payments and Benefits. The obligation of the Company to provide the payments and benefits described in this Section shall cease, and all unvested stock options shall terminate in the event and at such time as Executive breaches (unless immaterial) any of the provisions of this Section 8 or of Section 10 or 11, or in the event that Executive’s employment is terminated under any of the provisions contained in Section 9.

 

(d) Other Employment. In the event Executive accepts other employment with a competitor of the Company (defined as another company primarily engaged in the apparel design or apparel retail business or any retailer with apparel sales in excess of $500 million annually) during the otherwise anticipated Continuation Period, Executive will immediately cease to be an employee and shall forfeit all unaccrued pay and benefits contemplated by this Section 8 (except as otherwise contemplated by Section 8(a)(3)). In the event that Executive accepts any other employment with a for-profit enterprise which is not a competitor of the Company (“New Employment”) during the otherwise anticipated Continuation Period: (i) Executive will immediately cease to be an employee of the Company as of the date of such acceptance (“New Employment Date”); (ii) Executive will continue to receive payments during the otherwise anticipated Continuation Period equal to Executive’s Base Compensation as set forth in Section 8(a)(1), subject to the provisions of Sections 8(b) and 8(c), and further provided that Company’s obligations to make such payments to Executive under this Section will be reduced by the amount of any cash compensation Executive receives for other services during the otherwise anticipated Continuation Period; (iii) Executive will cease to receive all other payments and benefits, including Incentive Compensation and health insurance coverage under Sections 8(a)(2) and 8(a)(4) and any other options not vested as of the New Employment Date; and (iv) Executive agrees to notify the Company’s General Counsel in writing of his New Employment and all related financial terms on or before the New Employment Date.

 

(e) Other Compensation. In the event that Executive accepts any other compensation during the Continuation Period for other services (e.g. services provided to a charitable organization or as a Director, consultant or otherwise), Executive will continue to receive the Continuation Pay and Benefits as a non-executive employee as set forth in Section 8(a), subject to the provisions of Sections 8(b)-8(d), and provided that Company’s obligations to make such payments will be reduced by the amount of any cash compensation Executive receives for such other services and that Executive will promptly notify the Company’s General Counsel in writing of the financial terms.

"Section 8. Termination Without Cause" elsewhere:

Ross Stores (ROST)
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