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Exhibit 10(rr)
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (this "Agreement"), dated as of
September 8, 1999, is by and between Xxxxx Telecom Inc., a Delaware corporation
(the "Corporation"), and X. Xxxxxxxx Xxxxx ("Xxxxx").
RECITALS:
A. The Board of Directors of the Corporation (the "Board") has
recognized that the Corporation may be vulnerable to a change in control
transaction.
B. In order to induce Xxxxx to remain as a consultant to the
Corporation, the Corporation agrees to pay to Xxxxx a Change in Control Payment
(as defined in Section 2(a)) in the event that a Change in Control (as defined
in Section 2(b)) of the Corporation occurs during the Term (as defined in
Section 1) as described below.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxxx and the Corporation agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement (the "Term") shall
commence on September 8, 1999, and shall continue through December 31, 2002;
PROVIDED, HOWEVER, that commencing on January 1, 2000, and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the preceding year, the
Corporation shall have given notice that it does not wish to extend this
Agreement; and PROVIDED, FURTHER, that this Agreement shall automatically
terminate in the event that Xxxxx ceases to be a consultant to the Corporation
for any reason.
2. CHANGE IN CONTROL PAYMENT. (a) AMOUNT. If a Change in Control of the
Corporation shall occur during the Term, the Corporation shall pay to Xxxxx
$250,000.00 (or such higher amount as the Board may determine in its sole
discretion) (the "Change in Control Payment"), subject to the conditions and
pursuant to the terms set forth in this Section 2.
(b) CHANGE IN CONTROL. No benefits shall be payable hereunder unless
there shall have been a change in control of the Corporation during the Term as
set forth below. For purposes of this Agreement, a "Change in Control" of the
Corporation shall be deemed to have occurred if:
(i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation,
or any corporation owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation
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representing 30% or more of the combined voting power of the
Corporation's then outstanding securities;
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board, and any new
Director (other than a Director designated by a person who has entered
into an agreement with the Corporation to effect a transaction
described in clause (i), (iii) or (iv) of this Section 2(b)) whose
election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of the
Directors then still in office who either were Directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least
a majority thereof;
(iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than
(a) a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 80%
of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such
merger or consolidation or (b) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar
transaction) in which no "person" (as defined in Section 2(b)(i))
acquires more than 30% of the combined voting power of the
Corporation's then outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
(c) REDUCTION. Notwithstanding anything to the contrary contained in
this Agreement, in the event that, by reason of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), any payment or benefit received
or to be received by Xxxxx in connection with a change in control of the
Corporation whether payable pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Corporation, its successors, any person
whose actions result in a change in control or any corporation affiliated (or
which, as a result of the completion of the transactions causing a change in
control will become affiliated) (an "Affiliate") with the Corporation within the
meaning or Section 1504 of the Code (collectively, "Total Payments"), would not
be deductible (in whole or in part) by the Corporation, an Affiliate or other
person making such payment or providing such benefit, the Change in Control
Payment shall be reduced until no portion of the Total Payments is not
deductible by reason of Section 280G of the Code.
(d) TIME OF PAYMENT. The payments provided for in this Section 2 shall
be made not later than the fifth business day following the date that the Change
in Control is consummated (the "Closing Date").
3. SUCCESSORS; BINDING AGREEMENT. (a) The Corporation will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Corporation to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would
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be required to perform it if no such succession had taken place. As used in this
Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by Xxxxx and his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees or legatees. If Xxxxx
should die after the occurrence of a Change in Control while any amount would
still be payable to him hereunder had he continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Xxxxx'x devisee, legatee or other designee or, if there is no
such designee, to his estate.
4. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Xxxxx and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto 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 time or at any
prior to subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Ohio without regard to its conflicts of law
principles. All references to Sections of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Corporation under
Section 2 shall survive the expiration of the term of this Agreement.
5. VALIDITY. The invalidity or unenforceability of any provision 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.
6. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
7. ARBITRATION. Following a Change in Control of the Corporation, any
dispute or controversy between the Corporation and Xxxxx arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Cleveland, Ohio, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
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IN WITNESS WHEREOF, Xxxxx has executed, and the Corporation has caused
its duly authorized representative to execute, this Agreement as of the date
first above written.
XXXXX TELECOM INC.
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President
X. XXXXXXXX XXXXX
/s/ X. Xxxxxxxx Xxxxx
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