Under the Employment Agreement, Mr. Wobensmith has agreed to protect Gencos confidential information for three years after termination, and not to solicit Gencos employees for other employment for two years after termination. He has also agreed not to engage in certain defined competitive activities described in the Employment Agreement for two years after the termination of his employment with Genco. Certain provisions regarding competitive activities will only apply for six months following a change of control or in the event of termination of Mr. Wobensmith by Genco without cause or by Mr. Wobensmith for good reason. For purposes of the Employment Agreement, change of control is defined generally as the acquisition of beneficial ownership of more than 50% of the aggregate voting power of Genco by any person or group other than certain transactions by certain specified parties; the sale of all or substantially all of Gencos assets within a 12-month period, other than sales to certain specified parties; any merger or similar transaction in which holders of Gencos voting stock immediately prior to such transaction do not hold at least 50% of the voting stock of the surviving entity; or the acquisition of beneficial ownership of more than 40% of the aggregate voting power of Genco by any person or group that is required to file a Schedule 13D, other than transactions by certain specified persons.
If Mr. Wobensmith is terminated without cause or resigns for good reason, Genco will pay him a pro rata bonus for the year of termination, plus a lump sum equal to double the average of his prior three years annual incentive awards, plus double his annualized base salary, and provide medical, dental, long-term disability, and life insurance benefit plan coverage for him and his eligible dependents for a period of two years. If a termination without cause or resignation for good reason occurs within two years of a change in control, (i) the amounts that are doubled above become tripled, (ii) the coverage period of two years becomes three years, and (iii) the average of his prior three years annual incentive awards will instead be the average of his annual incentive awards for the three years immediately preceding the change in control. Mr. Wobensmiths annual incentive award for a given year is his cash bonus earned for that year.
In the event of termination of Mr. Wobensmiths employment due to his death or disability, Genco will pay him, or his estate, a pro rata bonus for the year of termination and one years salary and, in the case of disability, to provide medical, dental, long-term disability, and life insurance benefit plan coverage for him and his eligible dependents for a period of one year.
Accelerated Vesting of RSUs
Under the terms of Mr. Wobensmiths and Mr. Regans RSU grant agreements, the RSUs vest in full six months after the occurrence of a change of control (as defined under the 2015 Plan), subject to the executives continued employment on such date, unless the RSU award is not assumed, continued or substituted for by the acquirer, in which case the RSUs will vest in full immediately upon a change in control. In addition, if the executives service is terminated by Genco without cause (as defined in the 2015 Equity Incentive Plan) or, in Mr. Wobensmiths case, he terminates his service for good reason (as defined the Employment Agreement), the RSUs fully vest immediately. Also, if the executives service is terminated by Genco by reason of his death or disability (as defined in the RSU grant agreement), the RSUs become vested as to a pro rata percentage of the RSUs, calculated monthly, that would otherwise become vested at the next vesting date. For purposes of the RSUs, service means a continuous time period during which the executive is at least one of the following: an employee or a director of, or a consultant to, Genco.
Under the terms of Mr. Zafolias RSU grant agreements, the RSUs vest in full if Mr. Zafolias service is terminated by Genco without cause within twelve months after the occurrence of a change of control, unless the RSU award is not assumed, continued or substituted for by the acquirer, in which case the RSUs will vest in full immediately upon a change in control. In addition, if his service is otherwise terminated by Genco without cause, the portion of the RSUs that would have vested upon the next vesting date will vest immediately. Also, if his service is terminated by Genco by reason of his death or disability, the RSUs become exercisable as to a pro rata percentage of the RSUs, calculated monthly, that would otherwise become exercisable at the next vesting date.
Accelerated Exercisability of Options
Under the terms of Mr. Wobensmiths and Mr. Regans option agreements, the options vest in full and are exercisable for the full exercise period six months after the occurrence of a change of control, subject to the executives continued employment on such date, unless the option award is not assumed, continued or substituted for by the acquirer, in which case the options will vest in full immediately upon a change in control. In either event, the options will become exercisable for the full exercise period. In addition, if the executives service is terminated by