SEVERANCE AGREEMENT
THIS AGREEMENT dated as of April 21, 1999 is made by and between
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION, a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxxxxx (the "Executive").
WHEREAS, the Company considers it essential to the best interests of
its stockholders to xxxxxx the continuous employment of key management
personnel; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof.
2. Term of Agreement.
2.1. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000; provided, however, that
commencing on January 1, 2001 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 Company or the Executive
shall have given notice not to extend this Agreement or a Change in Control
shall have occurred prior to such January 1; and further provided, however, if a
Change in Control shall have occurred during the term of this Agreement, this
Agreement shall continue in effect for a period ending on the last day of the
twenty-fourth calendar month beginning after the month in which such Change in
Control occurred.
2.2. During the initial term of this Agreement or any
subsequent renewal term of this Agreement, if, prior to a Change in Control, the
Executive ceases to be employed in the position of Senior Vice President and
General Counsel, but remains employed by the Company in a non-executive
position, this Agreement shall be deemed to have terminated as of the date the
Executive ceases to be employed in an executive position; provided, however, the
Board, in its sole discretion, may designate that this Agreement shall remain in
effect with respect to the Executive's subsequent position with the Company,
and, as a result of this designation, the Company and the Executive shall
continue to be bound by the terms of this Agreement. Notwithstanding the
foregoing, this Section 2.2 shall not apply if the Executive ceases to be
employed in an executive position as the result of any action taken by the
Company in consultation with a Person with whom the Company has entered into an
agreement the consummation of which will constitute a Change in Control or if
the Executive terminates his employment with Good Reason prior to a Change in
Control (determined by treating a Potential Change in Control as a Change in
Control in applying the definition of Good Reason under Section 15(M)(i) through
(vii) hereof) if the circumstance or event that constitutes Good Reason occurs
at the direction of such Person.
3. Company's Covenants Summarized. To induce the Executive to remain in
the employ of the Company and in consideration of the Executive's covenants set
forth in Section 4 hereof, the Company agrees, under the conditions described
herein, to pay the Executive the Severance Payments described in Section 6.1
hereof and the other payments and benefits described herein in the event the
Executive's employment with the Company is terminated following a Change in
Control and during the term of this Agreement. Except as provided in Section 9.1
hereof or Section 6.2 hereof, no amount or benefit shall be payable under this
Agreement unless there shall have been (or, pursuant to Section 6.1 hereof,
there shall be deemed to have been) a termination of the Executive's employment
with the Company following a Change in Control. This Agreement shall not be
construed as creating an express or implied contract of employment and, except
as otherwise agreed in writing between the Executive and the Company, the
Executive shall not have any right to be retained in the employ of the Company.
4. The Executive's Covenants.
4.1. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control
during the term of this Agreement, the Executive will remain in the employ of
the Company until the earliest of (i) a date which is six (6) months from the
date of such Potential Change in Control, (ii) the date of a Change in Control,
(iii) the date of termination by the Executive of the Executive's employment for
Good Reason (determined by treating the Potential Change in Control as a Change
in Control in applying the definition of Good Reason under Section 15(M)(i)
through (vii) hereof) or by reason of death, Disability or retirement, or (iv)
the termination by the Company of the Executive's employment for any reason.
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4.2. While the Executive is employed by the Company and for a
period of one year after the effective date of Executive's termination of
employment if Executive's employment is terminated following a Change in Control
and Executive becomes entitled to receive any payment under Section 6.1 of this
Agreement, the Executive covenants and agrees that he will not, whether for
himself or for any other person, business, partnership, association, firm,
company or corporation, directly or indirectly, call upon, solicit, divert or
take away or attempt to solicit, divert or take away, any of the customers or
employees of the Company that are or were customers or employees at any time
during his employment with the Company. The Executive acknowledges that the
Company would be irreparably injured by a violation of this Section 4.2, and
agrees that the Company, in addition to other remedies available to it for such
breach or threatened breach, shall be entitled to a preliminary injunction,
temporary restraining order or other equitable relief restraining the Executive
from any actual or threatened breach of this Section 4.2 without any bond or
other security being required.
5. Compensation Other Than Severance Payments.
5.1. Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.2. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive when such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, this Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
6. Severance Payments.
6.1. The Company shall pay the Executive the payments
described in this Section 6.1 (the "Severance Payments") upon the termination of
the Executive's employment following a Change in Control and during the term of
this Agreement, in addition to the payments and benefits described in Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death or Disability, or (iii) by the Executive without Good Reason. The
Executive's employment shall be deemed to have been terminated, following a
Change in Control by the Company without Cause or by the Executive with Good
Reason if the Executive's employment is terminated prior to a Change in Control
without Cause after consultation with a Person who has entered into an agreement
with the Company the consummation of which will constitute a Change in Control
or if the Executive terminates his employment with Good Reason prior to a Change
in Control (determined by treating a Potential Change in Control as a Change in
Control in applying the definition of Good Reason under Section 15(M)(i) through
(vii) hereof) if the circumstance or event that constitutes Good Reason occurs
at the direction of such Person.
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(A) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to the Applicable
Multiplier times the sum of (i) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or such salary in effect immediately
prior to the Change in Control, and (ii) the higher of (x) the target bonus for
the year in which the Notice of Termination is provided or (y) the highest
actual bonus paid or payable to the Executive pursuant to the Company's Bonus
Plan or any successor thereto (the "Bonus Plan") for any of the five years
completed immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based.
(B) Notwithstanding any provision of the Bonus Plan,
the Company shall pay to the Executive a lump sum amount, in cash, equal to the
sum of (i) any bonus amount which has been allocated or awarded to the Executive
for a completed fiscal year or other measuring period preceding the Date of
Termination under the Bonus Plan but has not yet been paid (pursuant to Section
5.2 hereof or otherwise) and (ii) a pro rata portion to the Date of Termination
of the aggregate value of all contingent bonus awards to the Executive for all
uncompleted periods under the Bonus Plan calculated as to each such award by
assuming the achievement of the target performance level within the performance
range established with respect to such award and basing such pro-rata portion
upon the portion of the award period that has elapsed as of the Date of
Termination;
(C) For a thirty-six (36) month period after the Date
of Termination the Company shall arrange to provide the Executive with life,
disability, accident and health insurance benefits substantially similar to
those which the Executive is receiving immediately prior to the Notice of
Termination (without giving effect to any reduction in such benefits subsequent
to a Change in Control if such reduction constitutes Good Reason). Benefits
otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be
reduced to the extent comparable benefits are actually received by or made
available to the Executive without cost during the above-referenced period. In
addition, any such benefits actually received by the Executive shall be reported
to the Company by the Executive.
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6.2. (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the Total Payments will be subject to the Excise
Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments and any federal, state and local income tax
and Excise Tax upon the payment provided for by this Section 6.2, shall be equal
to the excess of the Total Payments over the payment provided for by this
Section 6.2.
(B) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) any payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person (the
"Total Payments") shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably acceptable to the
Executive, such payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code,
and all "excess parachute payments" (within the meaning of section 280G(b)(1) of
the Code) shall be treated as subject to the Excise Tax unless, in the opinion
of such tax counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to
the Excise Tax, and (ii) the value of any noncash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made, FICA taxes at the highest rate applicable with respect to wages in excess
of the Social Security taxable wage base in effect for the year of payment, and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the Date of Termination (or
such other time as is hereinafter described), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
(C) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment (or such other time as is
hereinafter described), the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
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 the
Executive to the extent that such repayment results in a reduction in Excise Tax
or a federal, state or local income tax deduction) plus interest on the amount
of such repayment at the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the termination of the Executive's employment
(or such other time as is hereinafter described) (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 shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or addition payable by the
Executive with respect to such excess) at the time that the amount of such
excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments. If an Executive who remains in the
employ of the Company becomes entitled to the payment provided for by this
paragraph, such payment shall be made no later than the later of (i) the fifth
day following the date on which the Executive notifies the Company that he is
subject to the Excise Tax and (ii) twenty days prior to the date on which the
Excise Tax is initially due.
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6.3. The payments provided for in section 6.1 hereof (other
than Section 6.1(C)) and in Section 6.2 hereof shall be made not later than the
fifth day following the Date of Termination; provided, however, that, if the
amounts of such payments cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, as determined in
good faith by the Company of the minimum amount of such payments to which the
Executive is clearly entitled and shall pay the remainder of such payments
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event later than
the thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code). At the time that payments are made under this section, the Company shall
provide the Executive with a written statement setting forth the manner in which
such payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Company has received from
outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).
6.4. The Company also shall pay to the Executive all legal
fees and expenses incurred in good faith by the Executive as a result of a
termination of the Executive's employment following a Change in Control and
during the term of this Agreement (including all such fees and expenses, if any,
incurred in disputing in good faith any such termination or in seeking in good
faith to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder). For purposes of this Section 6.4, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was frivolous. Such payments shall be
made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses incurred
as the Company reasonably may require.
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7. Termination Procedures and Compensation During Dispute.
7.1. After a Change in Control and during the term of this
Agreement, any purported termination of the Executive's employment (other than
by reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10 hereof.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the affirmative vote
of not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's Counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive
engaged in conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
7.2. "Date of Termination," with respect to any purported
termination of the Executive's employment after a Change in Control and during
the term of this Agreement, shall mean (i) If the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination by
the Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days from the date
such Notice of Termination is given).
7.3. If prior to the Date of Termination (as determined
without regard to this Section 7.3), either party notifies the other party that
a dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice of
dispute provided by the Executive only if such notice in given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.
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7.4. If a purported termination occurs following a Change in
Control and during the term of this Agreement, and such termination is disputed
in accordance with Section 7.3 hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given until the Date of Termination, determined in accordance with Section
7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other
amounts due under this Agreement (other than those due under Section 5.2 hereof)
and shall not be offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that if the Executive's employment
by the Company is terminated during the term of this Agreement, the Executive is
not required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to this Agreement.
Further, the amount of any payment or benefit provided for in this Agreement
(other than Section 6.1(C)) shall not be reduced by any compensation earned by
the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.
9. Successors; Binding Agreement.
9.1. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive were to terminate the Executive's employment for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination.
9.2. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
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10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
states registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Systems & Computer Technology Corporation
0 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Chairman and Chief Executive Officer
To the Executive:
Xxxxxxx X. Xxxxxxxxxx
000 Xxxxxxxxx Xxxx
Xx. Xxxxxx, XX 00000
11. 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 the Executive 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 same or at any
prior or 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 this Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania. 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 and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under Sections 4.2, 6 and 7 shall survive the
expiration of the term of this Agreement.
12. 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.
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13. Counterparts; Coordination with Employment Agreement.
13.1. 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 instruments.
13.2. The terms of this Agreement shall be coordinated with
and applied in conjunction with the terms of the Executive's employment
agreement, if any, with the Company. In general, it is the intent of the parties
that, subsequent to a Change in Control and during the term of this Agreement,
the provisions of this Agreement shall supersede and substitute for those
provisions of the employment agreement relating to the Executive's entitlement
to benefits in connection with any termination of the Executive's employment,
but shall not supersede for any period the provisions of such employment
agreement pertaining to the terms of the Executive's employment. Except for
circumstances relating to a termination of employment following a Change in
Control during the term of this Agreement, as provided for herein, all terms and
conditions of the Executive's employment with the Company shall be governed by
the terms of the Executive's employment agreement (including but not limited to
any such term granting additional years of service to the Executive for purposes
of any of the Company's employee benefit plans).
14. Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Board shall afford a reasonable opportunity to
the Executive for a review of the decision denying a claim and shall further
allow the Executive to appeal to the Board a decision of the Board within sixty
(60) days after notification by the Board that the Executive's claim has been
denied. Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Philadelphia,
Pennsylvania 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; provided, however, that the Executive shall be
entitled to seek specific performance of the Executive's right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Applicable Multiplier" means 3.
(B) "Base Amount" shall have the meaning defined in
section 280G(b)(3) of the Code.
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(C) "Board" shall mean the Board of Directors of the
Company.
(D) "Cause" for termination by the Company of the
Executive's employment, after any Change in Control, shall mean (i) the willful
and continued failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.1 hereof) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be "Willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Company.
(E) A "Change in Control" shall be deemed to have
occurred if the events set forth in any one of the following paragraphs shall
have occurred:
(i) The acquisition in one or more
transactions by any "Person" (as the term person is used for purposes of
Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used
for purposes of Rule 13d-3 promulgated under the 0000 Xxx) of fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
voting securities (the "Voting Securities"), provided that for purposes of this
Section 15(E)(i), the Voting Securities acquired directly from the Company by
any Person shall be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall be included in
the calculation of the total number of Voting Securities then outstanding); or
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(ii) Approval by shareholders of the Company
of (A) a merger, reorganization or consolidation involving the Company if the
shareholders of the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) (1) a complete liquidation or dissolution of the Company
or (2) an agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) Acceptance by shareholders of the
Company of shares in a share exchange if the shareholders of the Company
immediately before such share exchange do not or will not own directly or
indirectly immediately following such share exchange more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such share exchange in substantially the
same proportion as the ownership of the Voting Securities outstanding
immediately before such share exchange.
Notwithstanding the foregoing, a Change in Control shall not include
any event, circumstance or transaction occurring during the six-month period
following a Potential Change in Control which Potential Change in Control
results from the action of any entity or group which includes the Executive (a
"Management Group"); provided, however, that such action shall not be taken into
account for this purpose if it occurs within a six-month period following a
Potential Change in Control resulting from the action of any Person which is not
a member of the Management Group.
(F) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time. References to specific sections of the code
shall include any successors thereto.
(G) "Company" shall mean SYSTEMS & COMPUTER
TECHNOLOGY CORPORATION, a Delaware corporation, and any successor to its
business or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise (except in determining, under Section 15(E)
hereof, whether or not any Change in Control of the Company has occurred in
connection with such succession).
(H) "Date of Termination" shall have the meaning
stated in Section 7.2 hereof.
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(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(J) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed
under section 4999 of the Code.
(L) "Executive" shall mean the individual named in
the first paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive of
the Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure to
act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment by the Company to the
Executive of any duties inconsistent with the Executive's status as an executive
of the Company or a substantial adverse alteration in the nature or status of
the Executive's responsibilities from those in effect immediately prior to the
Change in Control;
(ii) a reduction by the Company in the
Executive's annual base salary as in effect on the date hereof or as the same
may be increased from time to time;
(iii) the relocation by the Company of its
principal executive offices to a location more than 30 miles from the location
of such office immediately prior to the Change in Control or the Company's
requiring the Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's business to an
extent substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company to pay to
the Executive any portion of the Executive's current compensation, or to pay to
the Executive any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven (7) days of the date
such compensation is due;
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(v) the failure by the Company to continue
in effect any compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's total
compensation, including but not limited to the Bonus Plan and any similar or
substitute plan adopted prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or alternative plan) on
a basis not materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to other
participants, as existed at the time of the Change in Control;
(vi) the failure by the Company to continue
to provide the Executive with benefits substantially similar to those enjoyed by
the Executive under any of the Company's pension, life insurance medical, health
and accident, or disability plans in which the Executive was participating at
the time of the Change in Control, the taking of any action by the Company which
would directly or indirectly materially reduce any of such benefits or deprive
the Executive of any material fringe benefit enjoyed by the Executive at the
time of the Change in Control, or the failure by the Company to provide the
Executive with the number of paid vacation days to which the Executive is
entitled on the basis of years of service with the Company in accordance, with
the Company's normal vacation policy in effect at the time of the Change in
Control; or
(vii) any purported termination by the
Company of the Executive's employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 7.1; for purposes of this
Agreement, no such purported termination shall be effective.
In addition, Good Reason for termination by the Executive shall exist
during a thirty (30) day period commencing on the first anniversary of a Change
in Control if the Executive continues in service as an employee during the year
preceding the first anniversary of the Change in Control. For this purpose, the
term "Change in Control" shall not include any "Potential Change in Control,"
notwithstanding any provision of this Agreement to the contrary.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(N) "Gross-Up Payment" shall have the meaning stated
in Section 6.2 hereof.
(O) "Notice of Termination" shall have the meaning
stated in Section 7.1 hereof.
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(P) "Person" shall have the meaning given in section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; provided, however, that a Person shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(Q) "Potential Change in Control" shall be deemed to
have occurred if the events set forth in any one of the following paragraphs
shall have occurred:
(i) the Company enters into an agreement,
the consummation of which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly
announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;
(iii) any Person who both (x) is on the date
hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing at least 10% or more of the combined
voting power of the Company's then outstanding securities and (y) increases his
or her beneficial ownership of such securities by 5% or more over the percentage
so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(R) "Severance Payments" shall have the meaning
stated in Section 6.1 hereof.
(S) "Total Payments" shall have the meaning stated in
Section 6.2 hereof. (A)
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IN WITNESS WHEREOF, this Agreement has been executed, as of the date
first above written, on behalf of this Company by its duly authorized officer
and by the Executive.
ATTEST: SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
/s/ Xxxxxxx X. XxXxxxxx By: /s/ Xxxxxxx X. Xxxx
----------------------- ------------------------------------
Assistant Secretary Xxxxxxx X. Xxxx
Chairman & CEO
EXECUTIVE
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxxx
