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EXHIBIT 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT by and between HPSC, Inc., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Executive"), is
made as of August 4, 2000, and amends and restates that certain Employment
Agreement by and between the Company and the Executive dated as of July 19,
1999.
WITNESSETH
WHEREAS, the Executive has served as Chairman and Chief Executive Officer
of the Company since July 19, 1993;
WHEREAS, the Company wishes to provide for the continued employment by the
Company of the Executive, and the Executive wishes to continue to serve the
Company, on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. EMPLOYMENT PERIOD. The Company shall employ the Executive, and the
Executive shall be an employee of the Company, on the terms and conditions set
forth in this Agreement, for a period (the "Employment Period") commencing on
July 19, 1999 (the "Effective Date") and ending on the third anniversary of the
Effective Date; provided, however, that, on the third anniversary of the
Effective Date and each subsequent anniversary thereof (each of such third and
subsequent anniversaries, an "Extension Date"), the Employment Period shall
automatically be extended for one additional year unless, at least six months
prior to the applicable Extension Date, the Company or the Executive shall have
given notice not to extend this Agreement. The Employment Period shall end upon
the termination of the Executive's employment hereunder, as of the Date of
Termination (as defined in Section 4(d)).
2. SCOPE OF EMPLOYMENT. (a) POSITION. During the Employment Period, the
Executive shall continue to serve as Chairman of the Board of the Directors and
Chief Executive Officer of the Company. The Executive shall adhere to policies
established by the Board of Directors of the Company (the "Board").
(b) DUTIES. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
shall devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive under this Agreement, use the
Executive's reasonable best efforts to carry out such responsibilities
faithfully and efficiently. It shall not be considered a violation of the
foregoing for the Executive to serve on corporate, industry, civic or charitable
boards or committees, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement.
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(c) LOCATION. The Company's headquarters shall be located in Boston,
Massachusetts, and the Executive shall be based and reside in the general area
of Boston, except for reasonable travel obligations.
3. COMPENSATION. The Executive's compensation during the Employment
Period shall be determined by the Board upon the recommendation of the committee
of the Board having responsibility for approving the compensation of senior
executives (the "Compensation Committee"), subject to Sections 3(a) through
3(d).
(a) BASE SALARY. During the Employment Period, commencing on the
Effective Date, the Executive shall receive an annual base salary ("Base
Salary") as determined by the Compensation Committee from time to time.
Commencing January 1, 2000, the Executive's Base Salary shall be at a rate of
not less than $345,000. The Base Salary shall be payable in accordance with the
Company's regular payroll practice for its senior executives, as in effect from
time to time.
(b) INCENTIVE PLAN. The Compensation Committee has developed an
incentive compensation plan ("Incentive Plan") for key management employees. The
Incentive Plan is designed to pay the Executive up to One Hundred Percent (100%)
of his annual base salary for achieving the results established by the
Compensation Committee. The Executive shall be eligible to receive awards under
the Incentive Plan, as determined annually by the Compensation Committee.
(c) OTHER INCENTIVE COMPENSATION. During the Employment Period, the
Executive shall be eligible for additional awards under the Company's Amended
and Restated 1998 Stock Incentive Plan, as it may be amended from time to time,
or under any subsequent similar plans, as determined by the Compensation
Committee.
(d) OTHER BENEFITS. During the Employment Period, (i) the Executive
shall participate in all applicable savings and retirement plans, practices,
policies and programs of the Company that are from time to time applicable to
senior executives of the Company including the Company's Employee Stock
Ownership Plan and Supplemental Executive Retirement Plan; (ii) the Executive
and/or the Executive's eligible dependents, as the case may be, shall be
eligible for participation in, and shall receive all benefits under, all
applicable welfare benefit plans, practices, policies and programs provided by
the Company, including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs on the same
basis and subject to the same terms, conditions, cost-sharing requirements and
the like as senior executives of the Company; and (iii) the Executive shall be
entitled to receive fringe benefits on a basis not less favorable than provided
to other senior executives of the Company. Specifically, the Executive shall be
entitled to four (4) weeks of vacation annually and an appropriate vehicle
provided by the Company.
4. TERMINATION OF EMPLOYMENT. This Employment Agreement may be terminated
as provided in Sections 4(a) through 4(d). Termination pursuant to any of
Sections 4(a) through 4(d) is subject to the provisions of Section 5.
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(a) DEATH OR DISABILITY. The Executive's employment shall terminate
automatically upon the Executive's death. The Company shall be entitled to
terminate the Executive's employment because of the Executive's Disability (as
defined in the Company's long-term disability insurance policies). A termination
of the Executive's employment by the Company for Disability shall be
communicated to the Executive by written notice, and shall be effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(b) TERMINATION BY THE COMPANY. (i) FOR CAUSE. The Company may
terminate the Executive's employment for Cause at any time during the Employment
Period as follows.
(A) "Cause" means the conviction of the Executive for the
commission of a crime involving moral turpitude, or willful gross
misconduct by the Executive in connection with his employment by the
Company that results in material and demonstrable financial harm to
the Company. No act or failure to act on the part of the Executive
shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that
the Executive's action or omission was in the best interests of the
Company. Any act or failure to act that is based upon authority given
pursuant to a resolution duly adopted by the Board, or the advice of
counsel for the Company, shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best
interests of the Company. In the event of a dispute concerning the
application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the
Board by clear and convincing evidence that Cause exists.
(B) A termination of the Executive's employment for Cause shall
not be effective unless it is accomplished in accordance with the
following procedures. The Company shall give the Executive written
notice ("Notice of Termination for Cause") of its intention to
terminate the Executive's employment for Cause, setting forth in
reasonable detail the specific conduct of the Executive that it
considers to constitute Cause and the specific provisions of this
Agreement on which it relies, and stating the date, time and place of
the Special Board Meeting for Cause. The "Special Board Meeting for
Cause" means a meeting of the Board called and held specifically and
exclusively for the purpose of considering the Executive's termination
for Cause, that takes place not less than twenty nor more than thirty
business days after the Executive receives the Notice of Termination
for Cause. The Executive shall be given an opportunity, together with
counsel, to be heard at the Special Board Meeting for Cause. The
Executive's termination for Cause shall be effective when and if a
resolution is duly adopted at the Special Board Meeting for Cause by
the affirmative vote of three-quarters of the entire membership of the
Board stating that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in the
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Notice of Termination for Cause and that such conduct constitutes
Cause under this Agreement.
(ii) Without Cause. The Company may terminate the Executive's
employment without cause at any time during the Employment Period.
(c) TERMINATION BY THE EXECUTIVE. (i) FOR GOOD REASON. The Executive
may terminate employment for Good Reason at any time during the Employment
Period as follows.
A. "Good Reason" means:
I. the assignment to the Executive of any duties or
responsibilities inconsistent in any respect with those customarily
associated with the position of Chairman of the Board and Chief
Executive Officer (including status, offices, titles and reporting
requirements) or any other action by the Company that results in a
diminution or other material adverse change in the Executive's
position, authority, duties or responsibilities, other than an
isolated, insubstantial and inadvertent action that is not taken in
bad faith and is remedied by the Company promptly after receipt of
notice thereof from the Executive;
II. any failure by the Company to comply with any provision
of Section 3 of this Agreement, other than an isolated, insubstantial
and inadvertent failure that is not taken in bad faith and is remedied
by the Company promptly after receipt of notice thereof from the
Executive;
III. any requirement by the Company that the Executive be
principally based at any office or location more than 25 miles from
the Company's current offices in Boston, Massachusetts; or
IV. any failure by the Company to comply with Section 11(c)
of this Agreement;
(B) For purposes of this Section 4(c), any reasonable
determination of "Good Reason" made by the Executive shall be
conclusive. A termination of employment by the Executive for Good
Reason shall be effectuated by giving the Company written notice
("Notice of Termination for Good Reason") of the termination, setting
forth in reasonable detail the specific conduct of the Company that
constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies. A termination of employment
by the Executive for Good Reason shall be effective on the fifth
business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which
date shall in no event be later than 30 days after the notice is
given).
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(C) The failure to set forth any fact or circumstance in a
Notice of Termination for Good Reason shall not constitute a waiver of
the right to assert, and shall not preclude the Executive from
asserting, such fact or circumstance in an attempt to enforce any
right under or provision of this Agreement.
(ii) WITHOUT GOOD REASON. The Executive may terminate his
employment without Good Reason at any time during the Employment Period by
giving the Company written notice of the termination.
(d) DATE OF TERMINATION. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, the date on which the
Executive gives the Company notice of a termination of his employment without
Good Reason, or the date of expiration of this Agreement, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) BY THE COMPANY OTHER
THAN FOR CAUSE; UPON NON-RENEWAL BY THE COMPANY OR THE EXECUTIVE; OR BY THE
EXECUTIVE FOR ANY REASON. Except as provided in Section 6 below, if, during the
Employment Period, the Company terminates the Executive's employment for any
reason, other than Cause or the Executive's death or Disability; the Company or
the Executive notifies the other pursuant to Section 1 of its or his intent not
to extend this Agreement; or the Executive terminates his employment for any
reason; the Company shall
(i) continue to pay the Executive his Base Salary for a period
of twelve months following the Date of Termination;
(ii) pay the Executive twelve monthly payments, each equal to
one-twelfth (1/12) of the maximum incentive compensation the Executive
could have earned during the twelve months following the Date of
Termination;
(iii) continue benefits to the Executive and/or the Executive's
family for a period of twelve months following the Date of Termination at
least equal to those which would have been provided in accordance with the
applicable health, medical, life, disability and other welfare benefit
plans, programs, and practices described in Section 3(d) as if the
Executive's employment had not been terminated; and
(iv) except in the case of termination by the Executive without
Good Reason, cause all of the Executive's outstanding equity awards, to the
extent then unvested or forfeitable, to immediately and fully vest and, to
the extent then not exercisable, to become immediately and fully
exercisable.
(b) DEATH OR DISABILITY. If the Executive's employment is terminated
by reason of the Executive's death or Disability during the Employment Period,
the Company shall
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(i) continue to pay to the Executive or, in the case of the
Executive's death, to the Executive's designated beneficiaries (or, if
there is no such beneficiary, to the Executive's estate or legal
representative) the Executive's Base Salary for a period of six months
following the Date of Termination; and
(ii) continue benefits to the Executive and/or the Executive's
family for a period of six months following the Date of Termination at
least equal to those which would have been provided in accordance with the
applicable health, medical, life, disability and other welfare benefit
plans, programs, and practices described in Section 3(d) as if the
Executive's employment had not been terminated.
(iii) cause all of the Executive's outstanding equity awards, to
the extent then unvested or forfeitable, to immediately and fully vest and,
to the extent then not exercisable, to become immediately and fully
exercisable.
(c) BY THE COMPANY FOR CAUSE. If the Executive's employment is
terminated by the Company for Cause, the Company's only obligation to the
Executive will be to pay any arrearages of salary or incentive compensation as
of the Date of Termination.
6. CHANGE OF CONTROL. Notwithstanding the provisions of Section 5 to the
contrary, in the event a Change in Control (as such term is defined in the
Company's 1998 Amended and Restated Stock Incentive Plan) occurs, the following
shall apply.
(a) If, during the three (3) year period following a Change in
Control, the Executive's employment is terminated by the Company for any reason
other than for Cause, if the Executive's employment is terminated by reason of
the Executive's death or Disability, or if the Executive terminates his
employment for Good Reason:
(i) The Company shall pay the Executive in a lump sum payable
within 30 days after the Date of Termination an amount equal to the average
of his total compensation from the Company which was includable in the
Executive's gross income for federal income tax purposes (as reported on
IRS Form W-2) for each of the preceding five (5) calendar years ending
before the date of the Change of Control multiplied by 2.99; provided,
however, that the Executive may choose, in his discretion, to receive a
lesser amount than he is entitled to receive under this Section 6(a)(i) if
after consultation with the Compensation Committee he determines that it is
in his best interests to accept a lesser amount;
(ii) The Company shall cause all of the Executive's outstanding
equity awards, to the extent then unvested or forfeitable, to immediately
and fully vest and, to the extent then not exercisable, to become
immediately and fully exercisable; and
(iii) The Company shall continue benefits to the Executive and/or
the Executive's family for a period of twelve months following the Date of
Termination at
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least equal to those which would have been provided in accordance with the
applicable health, medical, life, disability and other welfare benefit
plans, programs, and practices described in Section 3(d) as if the
Executive's employment had not been terminated.
(b) If, during the three (3) year period following a Change in
Control, the Executive terminates his employment for any reason other than for
Good Reason:
(i) the Company shall continue to pay the Executive his Base
Salary for the twelve (12) months following the Date of Termination and the
Company shall pay the Executive twelve monthly payments, each equal to
one-twelfth (1/12) of the maximum incentive compensation the Executive
could have earned during the twelve (12) months following the Date of
Termination; and
(ii) The Company shall continue benefits to the Executive and/or
the Executive's family for a period of twelve months following the Date of
Termination at least equal to those which would have been provided in
accordance with the applicable health, medical, life, disability and other
welfare benefit plans, programs, and practices described in Section 3(d) as
if the Executive's employment had not been terminated.
(c) If, during the three (3) year period following a Change in
Control, the Executive is terminated by the Company for Cause, the Company's
only obligation to the Executive will be to pay any arrearages of salary or
incentive compensation as of the Date of Termination.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
for which the Executive may qualify (including, but not limited to, the Employee
Stock Ownership Plan and the Supplemental Executive Retirement Plan), nor shall
anything in this Agreement limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Vested benefits and other amounts that the Executive
is otherwise entitled to receive under any plan, policy, practice or program of,
or any contract of agreement with, the Company or any of its affiliated
companies on or after the Date of Termination shall be payable in accordance
with the terms of each such plan, policy, practice, program, contract or
agreement, as the case may be, except as explicitly modified by this Agreement.
8. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced, regardless of whether the Executive obtains other employment.
9. CONFIDENTIAL INFORMATION; NON-COMPETITION. (a) The Executive shall
hold in a fiduciary capacity for the benefit of the Company all secret or
confidential
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information, knowledge or data relating to the Company or any of its affiliated
companies and their respective businesses that the Executive obtains during the
Executive's employment by the Company or any of its affiliated companies and
that is not public knowledge (other than as a result of the Executive's
violation of this Section 9) ("Confidential Information"). The Executive shall
not communicate, divulge or disseminate Confidential Information at any time
during or after the Executive's employment with the Company, except with the
prior written consent of the Company or as otherwise required by law or legal
process.
(b) If the Executive has terminated his employment for any reason
other than Good Reason, the Executive agrees not to compete with the business of
the Company or be employed by a competitor of the Company while the Executive is
receiving termination payments under Section 5.
10. INDEMNIFICATION; ATTORNEYS' FEES. The Company shall pay or indemnify
the Executive to the full extent permitted by law and the by-laws of the Company
for all expenses, costs, liabilities and legal fees which the Executive may
incur in the discharge of his duties hereunder. The Company also agrees to pay,
as incurred, to the fullest extent permitted by law, or indemnify Executive if
such payment is not legally permitted, for all legal fees and expenses that the
Executive may in good faith incur as a result of any contest by the Company, the
Executive or others of the validity or enforceability of or liability under, or
otherwise involving, any provision of this Agreement, upon receipt of the
Executive's undertaking to repay any such amount advanced if the Company
prevails upon the final disposition of such action.
11. SUCCESSORS. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall 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 Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "the Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation of law or otherwise.
12. MISCELLANEOUS. (a) This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts, without
reference to its principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
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(b) All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to the Company:
HPSC, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
or to such other address as either party furnishes to the other in writing in
accordance with this Section 12(b). Notices and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 4) shall not be
deemed to be a waiver of such provision or right or of any other provision of or
right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement between them concerning the subject matter
hereof.
(g) The rights and benefits of the Executive under this Agreement may
not be anticipated, assigned, alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign, sell, transfer,
pledge, encumber or charge the same shall be void. Payments hereunder shall not
be considered assets of the Executive in the event of insolvency or bankruptcy.
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(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
(i) The obligations of the Company and the Executive under Sections
5, 6, 7, 8, 9, 10, 11 and 13 shall survive the expiration or termination for any
reason of this Agreement.
13. GROSS-UP PAYMENT
(a) DEFINITIONS.
"Code" means the Internal Revenue Code of 1986, as amended, and
regulations and proposed regulations thereunder.
"Excise Tax" means the excise tax imposed by Code Section 4999.
"Gross-Up Payment" means the additional amount to be paid by the
Company under this Agreement, as determined by paragraph (b) of this section.
"Payment" means any payment or benefit received or to be received by
or on behalf of the Executive pursuant to the terms of this Agreement or
received or to be received by or on behalf of the Executive pursuant to any plan
or arrangement or other agreement with the Company (or any affiliate of the
Company pursuant to the provisions of Code Section 280G(d)(5)).
"Tax Counsel" means the tax counsel selected by the Company and
reasonably acceptable to the Executive.
(b) AMOUNT.
In the event that any Payment is (or is determined by Tax Counsel to
be) subject to the Excise Tax, the Company shall pay to or on behalf of the
Executive at the time specified in paragraph (c) of this section, a Gross-Up
Payment determined such that the net amount retained by the Executive, after
deduction of (i) the Excise Tax on all Payments, and (ii) any federal, state and
local income tax and Excise Tax upon the Gross-Up Payments provided for by this
paragraph (b), and (iii) any interest, penalties or additions to tax payable by
the Executive with respect thereto, shall be equal to the total present value
(determined at a discount rate of 7% compounded annually) of all of the Payments
at the time such Payments are to be made. For purposes of determining whether
any of the Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) (I) the total amount of the Payments shall be treated as
"Parachute Payments" within the meaning of Code Section 280G(b)(2), and (II) all
"Excess Parachute Payments" within the meaning of Code Section 280G(b)(1) shall
be treated as subject to the Excise Tax, except to the extent that, in the
opinion of Tax Counsel, a Payment (in whole or in part) does not constitute a
"Parachute Payment" within the meaning of Code Section 280G(b)(2), or such
"Excess Parachute Payments" (in whole or in part) are not subject to the
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Excise Tax, (ii) the amount of the Payments that shall be treated as subject to
the Excise Tax shall be equal to the lesser of (I) the total amount of the
Payments or (II) the amount of "Excess Parachute Payments" within the meaning of
Code Section 280G(b)(1) (after applying clause (i) hereof), and (iii) the value
of any non-cash benefits or any deferred payment or benefit shall be determined
by Tax Counsel in accordance with the principles of Code Sections 280G(d)(3) and
(4). For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income tax at the highest marginal rate
of federal income taxation applicable to individuals in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation applicable to individuals as are in effect in
the state and locality of his or her residence in the calendar year in which the
Gross-Up Payment is to be made, net of the maximum reduction in federal income
taxes that can be obtained from deduction of such state and local taxes, taking
into account any limitations applicable to individuals subject to federal income
tax at the highest marginal rate.
(c) PAYMENT.
The Gross-Up Payments provided for in paragraph (b) of this section
shall be made upon the earlier of (i) the payment to the Executive of any
Payment or (ii) the imposition upon or payment by the Executive of any Excise
Tax. Notwithstanding the foregoing, to the extent that the Company or Tax
Counsel determines that the Excise Tax or any portion of any Gross-Up Payment is
required to be withheld from the compensation of the Executive and to be
deposited with the applicable federal, state and local tax authorities, the
Company shall increase the amount of the Executive's compensation by the
required amount of such withholding, and then shall withhold and pay all such
required withholding taxes to the appropriate tax authorities, and upon doing so
shall be deemed to have met the payment requirements of this paragraph. For
purposes of this section, if anyone other than the Executive is subjected to the
Excise Tax with respect to any Payments, such person shall be entitled to the
same Gross-Up Payments with respect to such Payment that the Executive would
have been entitled to under this section.
(d) ADJUSTMENT.
If it is established pursuant to a final determination of a court or
an Internal Revenue Service proceeding or the opinion of Tax Counsel that the
Excise Tax is less than the amount taken into account under paragraph (b) of
this section, the Executive (or other payee, as the case may be) shall repay to
the Company within five days of his or her receipt of notice of such final
determination or opinion the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income tax imposed on the Gross-Up
Payment being repaid by him or her if such repayment results in a reduction in
Excise Tax or a federal, state and local income tax deduction) plus any interest
received by him or her on the amount of such repayment. If it is established
pursuant to a final determination of a court or an Internal Revenue Service
proceeding or the opinion of Tax Counsel that the Excise Tax exceeds the amount
taken into account under paragraph (b) of this section (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company
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shall make an additional Gross-Up Payment in respect of such excess within five
days of the Company's receipt of notice of such final determination or opinion.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
HPSC, INC.
By: /s/ J. Xxxxxx Xxxxxxxxxx
-----------------------------
J. Xxxxxx Xxxxxxxxxx
Chairman of the Compensation
Committee of the Board of
Directors
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
EXECUTIVE
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