EXHIBIT 10.26
RIGHT MANAGEMENT CONSULTANTS, INC.
CHANGE OF CONTROL AGREEMENT
EVP VERSION
This Change of Control Agreement (the "Agreement") is made and entered
into effective as of ________________ (the "Effective Date"), by and between
______________________ (the "Employee") and Right Management Consultants, Inc.,
a Pennsylvania corporation ("Right"). Certain capitalized terms used in this
Agreement are defined in Section 1 below.
R E C I T A L S
A. It is expected that Right from time to time will consider the possibility of
a Change of Control, as defined in this Agreement. The Board of Directors of
Right (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 Right and its
stockholders to provide the Employee with an incentive to continue his or her
employment and to maximize the value of Right upon a Change of Control for the
benefit of its stockholders.
C. In order to encourage the Employee to remain with Right 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 under certain circumstances following a Change of
Control.
D. This agreement supersedes any and all prior agreements that have as their
primary purpose the provision of benefits upon termination of employment under
certain circumstances following a Change of Control.
AGREEMENT
In consideration of the mutual covenants contained in this Agreement
and the continued employment of Employee by Right, 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 dishonesty taken by the Employee in
connection with his or her responsibilities as an employee which is intended to
result in personal enrichment of the Employee, other than a minor infraction
cured by the Employee upon request of Right, (ii) Employee's conviction of a
felony that the Board believes has had or will have a material detrimental
effect on Right' reputation or business, (iii) a willful act or willful failure
to act by the Employee that constitutes misconduct and is injurious to Right,
(iv) any material breach by Employee of any agreement with Right, after there
has been delivered to the Employee a written notice of breach and Employee has
been given a reasonable opportunity to cure such breach, or (v) continued
willful violations by the Employee of the Employee's obligations to Right or
responsibilities/duties as an employee after there has been delivered to the
Employee a written demand for performance from Right which describes the basis
for Right's belief that the Employee has not substantially performed his or her
duties, and Employee has been given a reasonable opportunity to cure the
violations.
(b) Change of Control. "Change of Control" shall mean the occurrence of any of
the following events:
(i) the approval by Right shareholders of a merger or consolidation of Right
with any other corporation, other than a merger or consolidation which would
result in the voting securities of Right 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 Right or such
surviving entity outstanding immediately after such merger or consolidation;
(ii) the approval by Right shareholders of a plan of complete liquidation of
Right or an agreement for the sale or disposition by Right of all or
substantially all of its assets;
(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
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Act), directly or indirectly, of securities of Right representing 50% or more of
the total voting power represented by Right's then outstanding voting
securities; or
(iv) a change in the composition of the Board, as a result of which fewer than a
majority of the directors are Incumbent Directors. "Incumbent Directors" shall
mean directors who either (A) are directors of Right as of the date hereof, or
(B) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of those directors whose election or nomination was
not in connection with any transactions described in subsections (i), (ii), or
(iii) or in connection with an actual or threatened proxy contest relating to
the election of directors of Right.
(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; provided, however, that a reduction in duties,
position or responsibilities solely by virtue of Right being acquired and made
part of a larger entity (as, for example, when the Chief Financial Officer of
Right remains as such following a Change of Control but is not made the Chief
Financial Officer of the acquiring corporation) shall not constitute an
"Involuntary Termination;" (ii) without the Employee's express written consent,
a significant reduction, without good business reasons, of the facilities and
perquisites (including office space and location) available to the Employee
immediately prior to such reduction; (iii) without the Employee's express
written consent, a reduction by Right of the Employee's base salary or incentive
opportunity as in effect immediately prior to such reduction; (iv) without the
Employee's express written consent, a material reduction by Right in the kind or
level of employee benefits to which the Employee is entitled immediately prior
to such reduction with the result that the Employee's overall benefits package
is significantly reduced; (v) without the Employee's express written consent,
the relocation of the Employee to a facility or a location more than twenty-five
(25) miles from his or her current location; (vi) any termination of the
Employee by Right that is not effected for Cause or for which the grounds relied
upon are not
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valid; or (vii) the failure of Right 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 under this Agreement.
2. Term of Agreement. This Agreement shall terminate on the earlier of (a) the
date that all obligations of the parties under this Agreement have been
satisfied or (b) on a date, prior to a Change of Control, when the Employee is
no longer employed by Right.
3. At-Will Employment. Right and the Employee acknowledge that the Employee's
employment is and shall continue to be at-will, as defined under applicable law.
If, prior to any Change of Control, the Employee leaves the employment of Right
either voluntarily or involuntarily for any reason, this Agreement will
terminate by Operation of Section 2 and the Employee shall not be entitled to
any payments, benefits, damages, awards or compensation other than as may
otherwise be established under Right's then existing employee benefit plans or
policies at the Termination Date, or as otherwise agreed by the parties at such
time.
4. Option Acceleration Upon A Change of Control. If a Change of Control occurs
while the Employee is employed by Right, regardless of whether Employee's
employment relationship with Right continues following such Change of Control,
then all stock options granted by Right to the Employee prior to the Change of
Control shall become fully vested and exercisable as of the date of the Change
of Control to the extent such stock options are outstanding and unexercisable at
the time of such termination.
5. Severance Benefits In the Event of an Involuntary Termination.
(a) Termination Following A Change of Control. If the Employee's employment with
Right terminates as a result of an Involuntary Termination at any time within
eighteen (18) months after a Change of Control, Employee shall be entitled to
the following severance benefits:
(i) Two (2) times the greater of: (A) the Employee's average base salary and
bonus paid for the three fiscal years prior to the Termination Date, or (B) the
base salary and bonus paid for the prior fiscal year, less applicable
withholding; payable in a lump sum within thirty (30) days of
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the Termination Date; plus a bonus for the year in which employment is
terminated in the amount of the greater of (A) the target bonus for such year
pro rated for the portion of the year from the start of the fiscal year to the
Termination Date; or (B) the bonus based on the annualized year to date
financial results of Right, with such bonus pro rated to reflect the portion of
the year from the start of the fiscal year to the Termination Date;
(ii) the same level of health (i.e., medical, vision and dental) coverage and
benefits as in effect for the Employee on the day immediately preceding the day
of the Employee's termination of employment for a period of twenty-four (24)
months; and
(iii) outplacement/administrative support for a period of twelve (12) months
following the Termination Date.
(iv) In the event Employee has not worked three full fiscal years as of the
Termination Date, the calculations to be made under Subsection 5(a)(i) shall be
based on the actual periods worked, with compensation for any unworked period
prior to the start of employment based on the compensation for the period worked
within the three fiscal year period. In the event Employee has not worked one
full fiscal year as of the Termination Date, the severance benefit of Subsection
5(a)(i) shall be based on Employee's base salary and target bonus as of the
Termination Date.
(b) Termination Apart from an Involuntary Termination following a Change of
Control. If the Employee's employment with Right terminates other than as a
result of an Involuntary Termination within eighteen (18) months following a
Change of Control, then the Employee shall not be entitled to receive severance
or other benefits as described in this Section 5, but may be eligible for those
benefits (if any) as may then be established under Right's then existing
severance and benefits plans and policies at the time of such termination.
(c) Accrued Wages and Vacation; Expenses. Without regard to the reason for, or
the timing of, Employee's termination of employment: (i) Right shall pay the
Employee any unpaid base salary due for periods prior to the Termination Date;
(ii) Right shall pay the Employee all of the Employee's accrued and unused
vacation through the Termination Date; and (iii) following submission of proper
expense reports by the Employee, Right shall reimburse the Employee for
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all expenses reasonably and necessarily incurred by the Employee in connection
with the business of Right prior to the Termination Date. These payments shall
be made promptly upon termination and within the period of time mandated by law.
6. Successors.
(a) Company's Successors. Any successor to Right (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of Right's business and/or assets shall assume Right's
obligations under this Agreement and agree expressly to perform Right's
obligations under this Agreement in the same manner and to the same extent as
Right 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 Right'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 Right, 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 they are
personally delivered or when they are 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 the Employee at the home address which the
Employee most recently communicated to Right in writing. In the case of Right,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by Right for Cause or by the Employee
as a result of a voluntary resignation or an Involuntary Termination shall be
communicated by
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a notice of termination to the other party to this Agreement given in accordance
with this Section. Such notice shall (i) indicate the specific termination
provision in this Agreement relied upon, (ii) set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination under the
provision so indicated, and (iii) specify the Termination Date (which shall be
not more than 30 days after the giving of such notice). If the Employee fails to
include in the notice any fact or circumstance which contributes to a showing of
Involuntary Termination, that failure shall not waive any right of the Employee
under this Agreement or preclude the Employee from asserting such fact or
circumstance in enforcing his or her rights under this Agreement.
8. 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 Right (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 and any outstanding stock option agreements and
restricted stock purchase agreements referenced in this Agreement represent the
entire agreement and understanding between the parties as to the subject matter
of this Agreement and supersede all prior or contemporaneous agreements, whether
written or oral, with respect to this Agreement and any stock option agreement
or restricted stock purchase 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 Pennsylvania.
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(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 of this Agreement, 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.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of Right by its duly authorized officer, as of the day and year first written
above.
COMPANY: RIGHT MANAGEMENT CONSULTANTS, INC.
By:________________________________
Title:
EMPLOYEE: ___________________________________
Signature
___________________________________
Printed Name
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