A "termination without cause" clause allows either party to end the contract without providing a specific reason, usually following a notice period. This provision offers flexibility but requires adherence to any stipulated notice or compensation requirements outlined in the agreement.
The Amended Plan provides that upon termination without Cause or resignation for Good Reason, our named executive officers are entitled to a cash severance payment equal to their base salary (or 2x base salary, in the case of the termination without Cause of Eric Greager, the Company’s President and Chief Executive Officer), payable in equal installments over a 12-month period (or a 24-month period, in the case of Mr. Greager’s termination without Cause). If such termination occurs within 12 months following a Change in Control, (a) such cash severance payment is payable in a lump sum instead of installments, (b) for Mr. Greager, the cash severance payment is 2.5x base salary, (c) for Brant DeMuth, the Company’s Executive Vice President and Chief Financial Officer, Cyrus Marter, the Company’s Executive Vice President, General Counsel and Secretary, and Dean Tinsley, Senior Vice President, Operations, the cash severance payment is 2x base salary, and (d) for Sandi Garbiso, Vice President and Chief Accounting Officer, the cash severance payment is 1x base salary.
Additionally, upon termination without Cause or resignation for Good Reason, our named executive officers are entitled to a multiple of a cash Annual Bonus, payable in equal installments over a 12-month period (or a 24-month period, in the case of Mr. Greager’s termination without Cause). The multiple is 2x for Mr. Greager’s termination without Cause, 1x for Mr. Greager’s resignation for Good Reason, and 0.5x for a termination without Cause or a resignation for Good Reason of the Company’s other named executive officers. If such termination occurs within 12 months following a Change in Control, such Annual Bonus is payable in a lump sum instead of installments, (b) for Mr. Greager, the multiple is 2.5x, (c) for Messrs. DeMuth, Marter, and Tinsley, the multiple is 2x, and (d) for Ms. Garbiso the multiple is 1x.
“Termination Without Cause” means the termination of the Executive’s employment by the Company for any reason other than (i) Termination With Cause or (ii) termination by the Company due to the Executive’s death or Permanent Disability.
Retirement; Grandfathered Retirement; Involuntary Termination Without Cause. If the Grantee incurs a Separation from Service during the First Year due to Retirement, Grandfathered Retirement or Involuntary Termination Without Cause, the Grantee shall vest, on the date of Separation from Service, in any Performance RSUs tentatively earned under Sections 3(a)(1) and 3(a)(2) at the rate of one forty-eighth (1/48th) of such Performance RSUs for each full month of employment with the Company (or a Subsidiary or Affiliate of the Company) completed by the Grantee following the Grant Date and prior to Retirement, Grandfathered Retirement or Involuntary Termination Without Cause; provided, however, that the Total At Risk RSUs shall be used in place of the First Year At Risk RSUs.
(2)Retirement; Involuntary Termination Without Cause. If the Grantee incurs a Separation from Service during the Second Year due to Retirement or Involuntary Termination Without Cause, the Grantee shall vest, on the date of Separation from Service, in any Performance RSUs tentatively earned under Sections 3(a)(1), 3(a)(2), and 3(a)(3) at the rate of one forty-eighth (1/48th) of such Performance RSUs for each full month of employment with the Company (or a Subsidiary or Affiliate of the Company) completed by the Grantee following the Grant Date and prior to Retirement or Involuntary Termination Without Cause; provided, however, that the sum of the Second Year At Risk RSUs and Third Year At Risk RSUs shall be used in place of the Second Year At Risk RSUs.
The restricted stock award agreements with Mr. De Costanzo dated January 4, 2018 and January 2, 2019 provide that on his termination without cause or resignation for good reason, 33% of the restricted stock awarded to him under such agreements will become vested.
A Termination Without Cause means Kyndryl’s termination of your employment with the Company involuntarily for any reason other than for Cause or due to death or disability. A Change in Control Termination means your Termination Without Cause or Termination for Good Reason during the twenty-four-month period immediately following a Change in Control. You do not have a Termination Without Cause or a Change in Control Termination if you accept an offer for, or are transferred to, another position with the Company or if you resign or otherwise leave Kyndryl voluntarily or if you do not continue working for the Company until your designated termination date.
Involuntary Termination Without Cause. The Company may terminate the Executive’s employment at any time Without Cause (as defined below) by delivering to the Executive a written notice specifying the date termination is to be effective. If all requirements of this Agreement are met, the Company will make the following payments to the Executive as of the effective date of Involuntary Termination Without Cause: [1] Base Salary. For eighteen (18) months beginning on the date of Involuntary Termination Without Cause, the Company will continue to pay the Executive’s base salary at the rate in effect on the effective date of Involuntary Termination Without Cause. If such amount exceeds two times the annual compensation limit prescribed by Section 401(a)(17) of the Internal Revenue Code of 1986 (the “Involuntary Termination Limit”), then the Company will pay the severance obligation described in this Section 2.02[1] in two payment streams. The first payment stream will be equal to the Involuntary Termination Limit, and the Company will pay this amount in eighteen (18) monthly installments or thirty-six (36) equal biweekly installments, beginning on the date of Involuntary Termination Without Cause. The amount of the second payment stream will equal the amount in excess of the Involuntary Termination Limit. The Company will pay this amount in twelve (12) monthly installments or twenty-four (24) equal biweekly installments beginning on the date that is six months after the date of the Executive’s Involuntary Termination Without Cause. As a condition of this salary continuation, the Executive is expected to promptly and reasonably pursue new employment subject to the non-competition provisions set forth in Section 1.05 above. If during the salary continuation period the Executive becomes employed either as an employee or a consultant, the Executive’s base salary paid by the Company will be reduced by fifty percent (50%) of the base salary amount for the remainder of the salary continuation period. The Executive agrees to immediately notify the Company of any subsequent employment or consulting work during the period of salary continuation. [2] Health Care. The Company will reimburse the Executive for the cost of maintaining continuing health coverage under COBRA for a period of no more than eighteen (18) months following the effective date of Involuntary Termination Without Cause, less the amount the Executive is expected to pay as a regular employee premium for such coverage. Such reimbursements will cease if the Executive becomes eligible for similar coverage under another benefit plan. The Executive agrees to immediately notify the Company of any if the Executive becomes eligible for coverage for under another benefit plan.
If Mr. Miller is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, he will be entitled to a severance package of 12 months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule and insurance program, but subject to the execution of a valid release in favor of the Company and its related parties.
Upon a Termination Without Cause, Mr. Peterson is entitled to 1.5x Annualized Total Compensation (base salary and target annual bonus) as if all targets and objectives had been met, paid over the applicable severance period.
Upon Termination Without Cause after a Change in Control, Mr. Peterson is entitled to 2x Annual Total Compensation if all targets and objectives had been met. Mr. Peterson is also entitled to his pro-rated annual bonus for the year in which the termination after a Change in Control occurs, payable at the same time as and to the extent that all other annual bonuses are paid. This bonus is not reflected in this table as, assuming a termination date of December 31, 2021, Mr. Peterson would have been entitled to this bonus pursuant to the terms of the AIP under which the annual bonus is paid (which provides for payment of the bonus to any participant who is on the payroll of the Company as of December 31) which are the same terms generally available to all salaried employees who participate in the plan.
Termination without cause refers to the ending of an employment contract by an employer without the employee being at fault. This type of termination occurs for reasons such as company restructuring, cost-cutting, or changes in business direction. It is not related to any misconduct or performance issues of the employee.
Termination without cause is typically used when an employer needs to downsize, restructure, or eliminate positions no longer necessary due to business needs. It is also applicable when the termination decision is strategic rather than performance-based.
When writing a termination without cause, it is essential to be clear, empathetic, and professional. Here is an example format:
Subject: Termination of Employment
Dear [Employee’s Name],
We regret to inform you that your position with [Company Name] will be terminated effective [Date]. This decision is not a reflection of your performance but is due to [reason, e.g., company restructuring].
You will receive [details on compensation, severance, final paycheck, benefits, etc.].
We appreciate your contributions during your time with us and wish you the best in your future endeavors.
Sincerely,
[Your Name]
[Your Position]
Termination without cause clauses are typically found in:
Employment Agreements: Many standard employment agreements include a termination without cause provision. This outlines the terms and conditions under which an employer can terminate the contract.
Executive Contracts: Contracts for high-level executives often detail termination terms, including severance packages.
Union Contracts: Collective bargaining agreements sometimes include standardized termination procedures, including clauses for termination without cause.
Such clauses provide a mechanism for both parties to end their contractual obligations while protecting certain rights, such as notice periods or severance packages.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A termination clause outlines the conditions under which a contract may be legally ended by either party. It typically specifies acceptable grounds for termination, necessary notice periods, and any associated penalties or procedures to be followed.
A third party beneficiary clause identifies individuals or entities who, although not direct parties to the contract, stand to benefit from its provisions. This clause grants these third parties the right to enforce the contract terms for their benefit, provided it aligns with the contracting parties' intentions.
A Third Party Rights clause specifies whether a contract grants any rights or benefits to individuals or entities who are not direct parties to the agreement. Typically, this clause clarifies that third parties cannot enforce terms of the contract unless explicitly stated otherwise, thereby limiting the ability of non-signatories to impact the contractual relationship.
Try our AI contract analysis and extract important clauses and information from existing contracts.
< <
Fill out the form and we will get in touch with you to give you a personal, customized demo of fynk.
Greetings!
I'm Markus, co-founder of fynk. After you've submitted the form, I'll swiftly get in touch with you.
Also, right after you submit your details, you can pick a time that works best for you for our meeting.
