AGREEMENT
Exhibit
10.2
AGREEMENT
This
Agreement (the “Agreement”) is made and entered into effective as of June 18,
2007 (the “Effective Date”), by and between Xxxxxx X. Xxxxxxxxx (the “Employee”)
and The Bureau of National Affairs, Inc., a Delaware corporation (the
“Company”). Certain capitalized terms used in this Agreement are defined
in Section 1 below.
R
E C
I T A L S
A.
It is possible that the Company from time to time may consider the possibility
of a Change of Control. The Board of Directors of the Company (the
“Board”) recognizes that such consideration can be a distraction to the Employee
and can cause the Employee to consider alternative employment
opportunities.
B.
The Board believes that it is in the best interests of the Company and its
shareholders to provide the Employee with an incentive to continue his
employment and to maximize the value of the Company upon a Change of Control
for
the benefit of its shareholders.
C.
In order to provide the Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the possibility of
a
Change of Control, the Board believes that it is imperative to provide the
Employee with certain severance benefits upon the Employee’s termination of
employment following a Change of Control.
AGREEMENT
In
consideration of the mutual covenants herein contained and the continued
employment of Employee by the Company, the parties agree as
follows:
1.
Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a)
Cause. “Cause” shall mean (i) any act of personal dishonesty taken
by the Employee in connection with his responsibilities as an employee which
is
intended to result in substantial personal enrichment of the Employee,
(ii) Employee’s conviction of a felony which the Board and/or the Company
reasonably believes has had or will have a material detrimental effect on the
Company’s reputation or business, (iii) a willful act by the Employee which
constitutes misconduct and is injurious to the Company, and (iv) continued
willful violations by the Employee of the Employee’s obligations to the Company
after there has been delivered to the Employee a written demand for performance
from the Company which describes the basis for the Company’s belief that the
Employee has not substantially performed his duties.
(b)
Change of Control. “Change of Control” shall mean the occurrence of
any of the following events:
(i)
the approval by shareholders of the Company of a merger or consolidation of
the
Company with any other corporation, other than 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 by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities
of
the Company or such surviving entity outstanding immediately after such merger
or consolidation;
(ii)
the approval by the shareholders of the Company of 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; or
(iii)
any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities.
(c)
Involuntary Termination. “Involuntary Termination” shall mean
(i) without the Employee’s express written consent, a significant reduction
of the Employee’s duties, position or responsibilities relative to the
Employee’s duties, position or responsibilities in effect immediately prior to
such reduction, or the removal of the Employee from such position, duties and
responsibilities, unless the Employee is provided with comparable duties,
position and responsibilities (as, for example, following a Change of Control,
the Chief Financial Officer of the Company is made the Chief Financial Officer
of the acquiring entity); (ii) any purported termination of the Employee by
the Company which is not effected for Cause or for which the grounds relied
upon
are not valid; or (iii) the failure of the Company to obtain the assumption
of this Agreement by any successors contemplated in Section 6
below.
(d)
Termination Date. “Termination Date” shall mean the effective date
of any notice of termination delivered by one party to the other
hereunder.
2.
Term of Agreement. This Agreement shall continue until the date
which is the earlier of (i) the date that the Employee ceases to be an employee
of the Company, or (ii) June 30, 2010. Any benefits accruing to the
Employee under Section 4 hereof shall survive termination of the
Agreement.
3.
At-Will Employment. The Company and the Employee acknowledge that
the Employee’s employment is and shall continue to be at-will, as defined under
applicable law. If the Employee’s employment terminates for any reason,
the Employee shall not be entitled to any payments, benefits, damages, awards
or
compensation other than as provided by this Agreement, or as may otherwise
be
established under the Company’s then existing employee benefit plans or policies
at the time of termination.
4.
Severance Payment. The Employee shall be eligible for a
severance payment in the event of an occurrence of either of the following
events and provided the Employee executes and delivers a release of all claims
against the Company:
(a) Involuntary
Termination. If, at any time during the first twenty-four (24)
months of this Agreement (i) the Employee is subject to an Involuntary
Termination, and (ii) the Company has not been subject to a Change in Control,
the Employee shall be entitled to a severance payment equal to twelve (12)
months of the Employee’s base annual salary in effect as of the date of such
termination, less applicable withholding.
(b)
Termination Following A Change of Control. If (i) the Company is
subject to a Change in Control at any time during the term of this Agreement,
and (ii) the Employee’s employment with the Company terminates as a result of an
Involuntary Termination at any time within twelve (12) months after such Change
of Control, Employee shall be entitled to a severance payment as
follows:
(i) If
the Change of Control becomes effective during the Employee’s first or second
year of employment, the severance payment shall be equal to twenty-four (24)
months of the Employee’s base annual salary as in effect as of the date of such
termination, less applicable withholding;
(ii) If
the Change of Control becomes effective during the third year of employment
but
prior to the expiration of this Agreement, the severance payment shall be equal
to twelve (12) months of the Employee’s base annual salary as in effect as of
the date of such termination, less applicable withholding.
(c) The
severance payment payable under 4(a) or 4(b) above shall be paid in a lump
sum
within ten (10) business days of the effective date of a Release delivered
by
the Employee to the Company following such Involuntary Termination, in the
form
attached hereto as Exhibit A. In no event shall the Employee be
entitled to a severance payment under both (a) and (b) above.
(d)
Termination Apart from Involuntary Termination or a Change of
Control. If the Employee’s employment with the Company terminates
other than as a result of the events described in 4(a) or 4(b) above (e.g.,
if
termination is due to Cause, death, disability or voluntary resignation), then
the Employee shall not be entitled to receive severance hereunder.
(c)
Accrued Wages and Vacation; Expenses. Without regard to the reason
for, or the timing of, Employee’s termination of employment: (i) the
Company shall pay the Employee any unpaid base salary due for periods prior
to
the Termination Date; (ii) the Company shall pay the Employee all of the
Employee’s accrued and unused annual leave through the Termination Date; and
(iii) following submission of proper expense reports by the Employee, the
Company shall reimburse the Employee for all expenses reasonably and necessarily
incurred by the Employee in connection with the business of the Company prior
to
the Termination Date. These payments shall be made promptly upon
termination and within the period of time mandated by law.
5.
Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee
(i) constitute “parachute payments” within the meaning of Section 280G
of the Code, and (ii) would be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then Employee’s benefits under
this Agreement shall be either
(a)
delivered in full, or
(b)
delivered as to such lesser extent which would result in no portion of such
benefits being subject to the Excise Tax,
whichever
of the foregoing amounts, taking into account the applicable federal, state
and
local income taxes and the Excise Tax, results in the receipt by Employee on
an
after-tax basis, of the greatest amount of benefits, notwithstanding that all
or
some portion of such benefits may be taxable under Section 4999 of the
Code.
Unless
the Company and the Employee otherwise agree in writing, any determination
required under this Section shall be made in writing by the Company’s
independent public accountants (the “Accountants”), whose determination shall be
conclusive and binding upon the Employee and the Company for all purposes.
For purposes of making the calculations required by this Section, the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Section 280G and 4999 of the Code. The
Company and the Employee shall furnish to the Accountants such information
and
documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section.
6.
Successors.
(a)
Company’s Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets shall assume the Company’s obligations under this Agreement and agree
expressly to perform the Company’s obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of
this Agreement by operation of law.
(b)
Employee’s Successors. Without the written consent of
the Company, Employee shall not assign or transfer this Agreement or any right
or obligation under this Agreement to any other person or
entity. Notwithstanding the foregoing, the terms of this Agreement
and all rights of Employee hereunder shall inure to the benefit of, and be
enforceable by, Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
7.
Notices.
(a)
General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its President.
(b)
Notice of Termination. Any termination by the Company for Cause or
by the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section. Such notice shall indicate
the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
Termination Date (which shall be not more than 30 days after the giving of
such
notice). The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall
not
waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing his rights
hereunder.
8.
Arbitration.
(a)
Any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof, shall be settled by binding arbitration to
be
held in Arlington, Virginia, in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association (the “Rules”). The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator
shall be final, conclusive and binding on the parties to the arbitration.
Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction.
(b)
The arbitrator(s) shall apply Virginia law to the merits of any dispute or
claim, without reference to conflicts of law rules. The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to state arbitration law. Employee hereby consents to
the personal jurisdiction of the state and federal courts located in Virginia
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.
(c)
Employee understands that nothing in this Section modifies Employee’s at-will
employment status. Either Employee or the Company can terminate the
employment relationship at any time, with or without Cause.
(d)
EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT
OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING
ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:
(i)
ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT,
BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION.
(ii)
ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, AND
THE
VIRGINIA AND DISTRICT OF COLUMBIA HUMAN RIGHTS ACTS;
(iii)
ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
9.
Miscellaneous Provisions.
(a)
No Duty to Mitigate. The Employee shall not be required to mitigate
the amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Employee may receive from any other
source.
(b)
Waiver. No provision of this Agreement may be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other
party
shall be considered a waiver of any other condition or provision or of the
same
condition or provision at another time.
(c)
Integration. This Agreement represents the entire agreement and
understanding between the parties as to the subject matter herein and supersede
all prior or contemporaneous agreements, whether written or oral, with respect
to this Agreement.
(d)
Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the Commonwealth of
Virginia.
(e)
Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and
effect.
(f)
Employment Taxes. All payments made pursuant to this Agreement
shall be subject to withholding of applicable income and employment
taxes.
(g)
Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
(h) Survival. Notwithstanding
any termination of the Agreement, the terms of Sections 1 (Definitions), 3
(At-Will Employment), 4 (Severance Payment), 5 (Limitation on Payments), 6
(Successors), 7 (Notices), 8 (Arbitration), and this Section 9 (Miscellaneous),
shall survive such termination and remain in full force and effect.
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of
the Company by its duly authorized officer, as of the day and year first above
written.
| THE BUREAU OF NATIONAL AFFAIRS, INC. | XXXXXX X. XXXXXXXXX |
| By/s/Xxxx X. Xxxxxx | By/s/Xxxxxx X. Xxxxxxxxx |
| Xxxx X. Xxxxxx | Xxxxxx X. Xxxxxxxxx |
| Chief Executive Officer | |
| June 8, 2007 | June 7, 2007 |
| Date | Date |
