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EXHIBIT 10.23
RETENTION AND SEVERANCE AGREEMENT
This Retention and Severance Agreement is made effective as of the 3rd
day of August, 2000 by and between International Total Services, Inc. (the
"Corporation") and Xxxxxxx X. Xxxxxx ("Xxxxxx").
WHEREAS, the Corporation has begun a process involving consideration of
various strategic options which, if pursued and implemented, could result in a
significant change in, or the elimination of, Xxxxxx'x employment relationship
with the Corporation; and
WHEREAS, the Corporation recognizes that the strategic direction and
the achievement of the Corporation's strategic objectives will likely place
additional demands and burdens on Xxxxxx and require special dedication and
efforts by Xxxxxx, while at the same time, presenting Xxxxxx with the
distraction and insecurity associated with the potential loss of employment.
WHEREAS, the Corporation has determined that providing Xxxxxx with a
retention incentive and severance protection is appropriate under the
circumstances so as to reinforce Xxxxxx'x dedication and focus in furtherance of
the Corporation's strategic objectives;
NOW THEREFORE, the Corporation and Xxxxxx agree as follows:
1. Severance Package. In the event that upon or within twenty-four (24) months
following a Change in Control (as defined below), the Corporation terminates
Xxxxxx'x employment other than for Cause (as defined below) or Xxxxxx terminates
employment with the Corporation either (a) on or after the first anniversary of
such Change in Control, or (b) for good reason (as defined below), the
Corporation shall provide Xxxxxx with the following severance package:
A. The Corporation shall pay Xxxxxx a lump sum cash severance payment
equal to the Severance Amount (as defined below), payable within ten (10)
business days following Xxxxxx'x execution and delivery of the mutual release
referred to in Section 2 below. In the event that the severance payment becomes
payable under this Agreement, such payment shall be in lieu of all other
severance benefits and shall be deemed to fully satisfy all of the Corporation's
severance obligations to Xxxxxx.
B. The Corporation shall provide Xxxxxx with continued health care
coverage for a period of two (2) years following Xxxxxx'x termination of
employment with the Corporation, subject to terms and conditions (including the
rate, if any, charged to Xxxxxx) as are otherwise applicable to active
Corporation officers.
Xxxxxx'x "Xxxxxxxxx Amount" means the greater of (i) two (2) times
Xxxxxx'x base annual compensation reduced by one-twelfth (1/12)of base annual
compensation for each full month of Xxxxxx'x employment with the Corporation
after a Change in Control; or (ii) an amount equal to Xxxxxx'x base annual
compensation.
For purposes hereof, the terms "Cause" shall mean Xxxxxx'x fraud or
commission of a felony which results in material injury to the business or
reputation of the Corporation. Xxxxxx shall be deemed to have "Good Reason" to
terminate his/her employment under this Agreement if, at any time, (i) the
Corporation reduces Xxxxxx'x remuneration or materially increases Xxxxxx'x
duties and responsibilities without his/her
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EXHIBIT 10.23
consent; or (ii) Xxxxxx'x place of employment is moved to a location more than
fifty (50) miles from his principal residence.
The term "Change in Control" means the first to occur of the following
events (i) any person or group of commonly controlled persons, other than the
voting trust established and maintained pursuant to the Voting Trust Agreement
(the "Voting Trust") made and entered into as of November 1, 1999 by and among
the Corporation, Xxxxxx X. Xxxxxxx, H. Xxxxxxx Xxxxxxxx, Xxxx X. X'Xxxxx and J.
Xxxxxxx Xxxxx (the "Voting Trust Trustees"), acquire ownership or control,
directly or indirectly, of more than twenty percent (20%) of the voting control
or value of the equity interests in the Corporation; (ii) the shareholders of
the Corporation approve an agreement to merge or consolidate with another
corporation or other entity resulting (whether separately or in connection with
a series of transactions) in a change in ownership of twenty percent (20%) or
more of the voting control or value of the equity interests in the Corporation,
or an agreement to sell or otherwise dispose of all or substantially all of the
Corporation's assets (including, without limitation, a plan of liquidation or
dissolution), or otherwise approve of a fundamental alteration in the nature of
the Corporation's business; (iii) at any time during any period of twenty-four
(24) consecutive months, individuals who were directors at the beginning of the
24-month period no longer constitute a majority of the members of the Board of
Directors of the Corporation, unless the election, or the nomination for
election by the Corporation's shareholders, of each director who was not a
director at the beginning of the period is approved by at least a majority of
the directors who (x) are in office at the time of the election or nomination
and (y) were directors at the beginning of the period (the "Continuing
Directors"); (iv) the election of any director to the Board of Directors of the
Corporation who was not nominated by the Continuing Directors; (v) termination
of the Voting Trust or change in the composition of the Voting Trust Trustees;
or (vi) a change in ownership or control sufficient to trigger the requirements
Section 280G of the Internal Revenue Code of 1986 (the "Code") as amended or the
Treasury Regulations or Proposed Treasury Regulations thereunder.
2. Mutual Release. In the event Xxxxxx'x employment with the Corporation
terminates under circumstances otherwise giving rise to the provision of the
Severance Package under Section 1, the Corporation and Xxxxxx shall promptly
enter into a mutual release in the form attached hereto as Exhibit "A". Failure
by Xxxxxx to promptly execute such release shall result in forfeiture of all
compensation and benefits otherwise due Xxxxxx under Section 1. Failure by the
Corporation to promptly execute such release shall result in the Corporation
owing Xxxxxx, in addition to all other amounts owing Xxxxxx under this
Agreement, liquidated damages for such failure in the amount of Fifty Thousand
Dollars ($50,000.00).
3. Successors and Assigns. This Agreement shall be binding on the Corporation ad
its successors and Assigns.
IN WITNESS WHEREOF, the unsigned parties hereby execute this Agreement
effective as of August 3, 2000.
INTERNATIONAL TOTAL SERVICES, INC.
By: /s/ H. Xxxxxxx Xxxxxxxx
Co-Chairman of the Board of Directors
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
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EXHIBIT 10.23
EXHIBIT "A"
MUTUAL RELEASE
This Mutual Release is made by and between International Total
Services, Inc. (the "Corporation") and Xxxxx X. Xxxxxx ("Xxxxxx"), effective
upon Xxxxxx'x termination of employment with the Corporation.
Xxxxxx hereby fully, finally, and unconditionally releases the
Corporation, its officers, directors, employees, agents and any of their
predecessors, successors and assigns ("Released Parties") from any and all
claims, suits, demands, charges, debts, grievances, costs, attorneys fees or
injuries of every kind or nature, whether known or unknown, absolute or
contingent, suspected or unsuspected, which Xxxxxx had or now has against the
Released Parties based on any matter or thing occurring or arising on or prior
to the effective date of this Mutual Release, including but not limited to
claims arising out of or relating to Xxxxxx'x employment with the Corporation or
the termination of Xxxxxx'x employment, ANY CLAIM FOR UNPAID COMPENSATION, BONUS
COMPENSATION OR SEVERANCE PAY, PENSION OR ANY OTHER BENEFITS, BREACH OF EXPRESS
AND/OR IMPLIED CONTRACT, WRONGFUL DISCHARGE, EMOTIONAL DISTRESS, VIOLATION OF
PUBLIC POLICY, AND/OR EMPLOYMENT DISCRIMINATION IN VIOLATION OF THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. SS. 621, ET SEQ., TITLE VII OF THE
CIVIL RIGHTS ACT OF 1964, 42 U.S.C. SS. 2000, ET SEQ., THE AMERICANS WITH
DISABILITIES ACT, 42 U.S.C. SS. 12101, ET SEQ., OHIO REVISED CODE SS. 4112, ET
SEQ., AND/OR ANY OTHER FEDERAL, STATE OR MUNICIPAL FAIR EMPLOYMENT PRACTICE OR
DISCRIMINATION LAW, STATUTE, OR ORDINANCE. Excluded from this release, however,
are (i) rights under his written Retention and Severance Agreement with the
Corporation (dated effective as of August 3, 2000) and claims or administrative
charges which cannot be waived by law; (ii) rights to plan benefits under any
plan covered by the Xxxxxx Retirement Income Security Act of 1974, as amended
("ERISA"); (iii) rights under any other type of benefit plan not covered by
ERISA; and (iv) rights to indemnification and liability coverage associated with
Xxxxxx'x position with the Corporation.
The Corporation hereby fully, finally, and unconditionally releases
Xxxxxx from any and all claims, suits, demands, charges, debts, grievances,
costs, attorneys fees or injuries of every kind or nature, whether known or
unknown, absolute or contingent, suspected or unsuspected, which the Corporation
had or now has against Xxxxxx based on any matter or thing occurring or arising
on or prior to the effective date of this Mutual Release, including but not
limited to claims arising out of or relating to Xxxxxx'x employment with the
Corporation or the termination of Xxxxxx'x employment. Excluded from this
release, however, are any of the Corporation's rights or claims against Xxxxxx
for the commission of a felony resulting in material injury to the Corporation.
Xxxxxx and the Corporation hereby further acknowledge:
(a) That Xxxxxx has had the opportunity to review and
consider the terms of this Agreement for a period of
twenty-one (21) days;
(b) To the extent that Xxxxxx has taken less than
twenty-one (21) days to consider this Agreement,
Xxxxxx acknowledges that Xxxxxx has had sufficient
time to consider this Agreement and to consult with
counsel, and that Xxxxxx does not desire additional
time;
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EXHIBIT 10.23
(c) That the benefits offered by the Corporation and
accepted by Xxxxxx as provided herein are in excess
of the benefits that Xxxxxx would otherwise be
entitled to receive;
(d) That each understands and had the opportunity to
receive counsel regarding their respective rights,
obligations and liabilities;
(e) That nothing in this Agreement is or shall be
construed as an admission by the Corporation of any
breach of any agreement or any intentional or
unintentional wrongdoing of any nature;
(f) That neither Xxxxxx nor the Corporation has made any
representations concerning the terms or effects of
this Agreement other than those contained in this
Agreement, it being clearly understood that this
Agreement (together with the Employment Agreement) is
the sole agreement between the parties and may not be
modified or terminated orally; and
(g) That the terms of this Agreement are not effective or
enforceable until seven (7) days after its execution,
during which period Xxxxxx may revoke this Agreement
by written notice to the Corporation at 0000 Xxxxx
Xxxxxx, 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000.
The parties hereto understand and agree this release forever bars each
of them from suing, arbitrating or otherwise asserting a claim against the other
on any released claim.
INTERNATIONAL TOTAL SERVICES, INC.
By: __________________________________
Date: __________________________________
___________________________________________
XXXXXXX X. XXXXXX
Date: __________________________________
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