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EXHIBIT 10(i)
July 15, 1999
Xx. Xxxxxxx X. Xxxxx
0000 Xxx Xxxxxxx Xxxx
Xx. Xxxxx, XX 00000
RE: SEVERANCE BENEFIT IN THE EVENT OF TERMINATION OF YOUR
EMPLOYMENT WITH CITATION COMPUTER SYSTEMS, INC.
UNDER CERTAIN CIRCUMSTANCES FOLLOWING A CHANGE IN CONTROL
Dear Xxxx:
The purpose of this letter is to record an agreement under which you will
receive certain severance benefits in the event of the termination of your
employment by CITATION Computer Systems, Inc. under certain circumstances within
12 months following a Change in Control. By entering into this agreement with
you, CITATION Computer Systems, Inc. is endeavoring to xxxxxx and encourage your
continued employment and dedication to your assigned duties should certain
potentially disturbing changes occur.
IN CONSIDERATION OF YOUR CONTINUING SERVICE TO CITATION COMPUTER SYSTEMS, INC.
THE FOLLOWING PROVISIONS SHALL apply:
4. THE COMPANY. As used herein, the "COMPANY" means CITATION Computer
Systems, Inc., a Missouri corporation, any successors in interest, and
any affiliates. An "AFFILIATE" is any person other than a natural
person who, with respect to the Company, is an affiliate as defined in
Rule 405 promulgated under the Securities Act of 1933, as amended, or
under any successor rule.
5. CHANGE IN CONTROL. A "CHANGE IN CONTROL" of the Company shall be
deemed to have occurred if, after the date hereof: (I) any person
(other than the Company, or any company owned directly or indirectly
by the shareholders of the Company in substantially the same
proportion as their ownership of voting securities of the Company),
becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 50 percent or more of the combined voting
power of the Company's then outstanding voting securities; or (ii) the
shareholders of the Company approve a merger or consolidation of the
Company with any other company, other than (a) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting
securities
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of the surviving entity) more than 50 percent of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (b) a
merger or consolidation effected to implement a recapitalization of
the Company or similar transaction in which no person acquires more
than 50 percent of the combined voting power of the Company's then
outstanding voting securities; or (iii) the shareholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
As used herein, "PERSON" means a natural person, company, partnership,
limited liability company, limited partnership, trust, syndicate,
other entity, government, political subdivision, agency, or
instrumentality of a government.
As used herein, "BENEFICIAL OWNER" means any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares:
(iii) Voting power, which includes the power to vote or direct
the voting of, voting securities of the Company; and/or
(iv) Investment power, which includes the power to dispose or
direct the disposition of, voting securities of the Company.
All voting securities of the Company, regardless of the form which such
beneficial ownership takes, shall be aggregated in calculating a
person's beneficial ownership. Moreover, a person shall be deemed to be
the beneficial owner of voting securities of the Company if that person
has the right to acquire beneficial ownership (via the exercise of an
option, through conversion rights, or otherwise) of such voting
securities within 60 days after the date on which such person's
beneficial ownership of voting securities is being determined. Any
voting securities of the Company which are subject to such a right to
acquire beneficial ownership shall be deemed to be outstanding for the
purpose of computing the percentage of outstanding voting securities of
the Company of which such person in the beneficial owner.
As used herein "VOTING SECURITIES" means shares of stock or other
securities which entitle the holder to vote in the election of
directors of the Company.
It is specifically agreed that a Change in Control shall NOT include
any of the following:
(iv) A public offering of voting securities of the Company; or
(v) A sale of voting securities of the Company to a group of
investors which includes material direct or indirect
ownership by members of management of the Company at the
time of such purchase; or
(vi) Any acquisition of voting securities of the Company by an
employee benefit plan sponsored or maintained by the
Company.
6. INVOLUNTARY CHANGE OF CIRCUMSTANCES. As used herein, the term
"INVOLUNTARY CHANGE OF CIRCUMSTANCES", as it relates to your
employment by the Company means:
(c) The amount of cash compensation (regular, salary, bonus, and
commissions) that you have the reasonable (but not assured)
opportunity to earn during the next 12 months is reduced by more
than 10 percent from the level that existed immediately preceding
the Change in Control, unless you consent in writing to such
change; or
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(d) Without your consent you are required by the Company to relocate
your primary place of business to a location that is greater than
50 miles from the Company's principal executive offices.
Termination of your employment with the Company under any of the
following circumstances shall NOT constitute an Involuntary Change of
Circumstances after a Change in Control;
(d) Termination by reason of your death; or
(e) Termination as a result of your "LONG-TERM DISABILITY." You will
be determined to have a long-term Disability if you are
receiving, or are currently entitled to receive, benefits under
the Company's long-term disability insurance plan, if any. If no
such long-term disability insurance plan is in effect, you will
be deemed to have commenced a Long-term Disability if: (I) you
cannot perform the essential functions of your employment
position, with or without a reasonable accommodation for your
disability; or (ii) you cannot perform the essential functions of
your employment position without an accommodation that would be
an undue hardship for the Company to provide. The foregoing
definition of Long-term Disability is not intended to and shall
not affect the definition of "disability" or any similar or
related term in any insurance policy the Company may provide; or
(f) Termination for Cause, as defined below.
As used herein, the term "TERMINATION FOR CAUSE" means
termination of your employment with the Company at any age
because of:
(f) Failing to substantially perform your employment duties
(other than by reason of Long-term Disability); or
(g) Willfully engaging in conduct that the Company determined
does or will likely be materially damaging or detrimental to
the Company; or
(h) Acting with personal dishonesty or breaching your fiduciary
duty to the Company that in either case results or was
intended to result in personal profit to you at the expense
of the Company; or
(i) Willfully violating any law, rule, or regulation (other than
traffic violations, misdemeanors, or similar offenses),
which is or will likely be materially damaging or
detrimental to the Company; or
(j) Your conviction of, or your entry of a guilty plea to, a
felony or other crime involving moral turpitude.
For purposes of defining Termination for Cause, no act, or failure to
act, on your part shall be considered "WILLFUL" unless done, or
omitted to be done, by you not in good faith and without reasonable
belief that the act or omission was in the best interest of the
Company.
4. CONDITION PRECEDENT FOR SEVERANCE BENEFIT. If, within 12 months
following a Change in Control (I) your employment with the Company is
terminated by the Company without your express written consent after
or coincident with an Involuntary Change of Circumstances or (ii) you
voluntarily terminate your employment with the Company after an
Involuntary Change of Circumstances, then in such event you shall
become entitled to a Severance Benefit as herein provided, subject to
all of the terms and conditions set forth herein.
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5. SEVERANCE BENEFIT. If the conditions precedent set forth above occur,
you shall be entitled to receive a Severance Benefit equal to one
times your Annual Compensation (as herein defined). You may elect to
receive this Severance Benefit in either (I) one lump sum payment or
(ii) in your choice of up to 12 equal monthly installments (without
interest).
As used herein, the term "ANNUAL COMPENSATION" means the average of
the total cash compensation received by you from the Company and
includable in your gross federal taxable income during each of the one
calendar year immediately preceding any termination of your
employment.
11. CONFIDENTIAL INFORMATION. Notwithstanding any other provision of this
agreement, in the event that, after termination of employment with the
Company, you divulge any trade secrets and/or confidential information
of the Company, you shall not be entitled to any Severance Benefits
pursuant to this agreement.
12. NOT AN EMPLOYMENT AGREEMENT. Neither anything contained in this
agreement nor any acts done pursuant hereto shall be construed as
entitling you to be continued in the employ of the Company for any
period of time or as obliging the Company to keep you in its employ
for any period of time.
13. GENERAL PROVISIONS. No provisions of this agreement may be modified,
waived, or discharged unless such waiver, modification, or discharge
is agreed to in writing signed by you and the Company. No waiver by
either party at any time of any breach by the other party of, or
compliance with, any condition or provision of this agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior to
subsequent time. All notices required or permitted hereunder shall be
in writing. This agreement shall be governed and construed by and in
accordance with the internal laws of the State of Missouri. The
invalidity or unenforceability of any provision or provisions of this
agreement shall not affect the validity or enforceability of any other
provision of this agreement, which shall remain in full force and
effect. Headings of paragraphs are for convenience only and shall not
affect the interpretation of this agreement.
14. ARBITRATION. Any controversy or claim relating to this agreement, or
the breach thereof (including the question of whether any particular
matter is arbitrable hereunder) shall be settled by arbitration in the
St. Louis, Missouri metropolitan area in accordance with the rules of
the American Arbitration Association then in force. The Company and
you agree to abide by all awards rendered by such arbitration
proceedings, and all such awards may be filed with and enforced by any
court having proper jurisdiction.
15. TERM. This agreement shall expire upon the later to occur of (I) 12
months following any Change in Control or (ii) 36 months after the
date of this letter; provided, however, that any such expiration shall
not affect your right to receive any Severance Benefit to which you
become entitled hereunder prior to such expiration. It is understood
that no rights under this agreement shall arise with respect to any
termination of your employment prior to the occurrence of any Change
in Control.
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You may make the foregoing agreement effective as respects you by executing a
copy of this letter where indicated below, thereby acknowledging your
understanding, acceptance of, and agreement to its terms and conditions, and
returning such signed copy to me within 10 days after the date of this letter.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
Sincerely,
CITATION Computer Systems, Inc.(R)
X. Xxxxxx Xxxxxx
Chairman and Chief Executive Officer
ACCEPTANCE AND AGREEMENT
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The terms and conditions of the foregoing agreement are understood, agreed to,
and accepted by me.
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Xxxxxxx X. Xxxxx
Date:
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