EXHIBIT 10.05
SEVERANCE COMPENSATION AGREEMENT
This Severance Compensation Agreement, dated as of November
29, 1994, is entered into by and between Comdata Holdings
Corporation, a Delaware corporation (the "Company") and Xxxxxx X.
XxXxxxxx (the "Executive").
The Company's Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention
and dedication of certain members of the Company's senior
management, including the Executive, to their assigned duties
without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the
Company.
This Agreement sets forth the severance compensation which
the Company agrees it will pay to the Executive if the
Executive's employment with the Company terminates under one of
the circumstances described herein following a Change in Control
of the Company (as defined herein).
1. Term. This Agreement shall terminate, except to the
extent that any obligation of the Company hereunder remains
unpaid as of such time, upon the earliest of (i) three years from
the date hereof if a Change in Control of the Company has not
occurred within such three-year period; (ii) the termination of
the Executive's employment with the Company based on death,
Disability (as defined in Section 3(b)), Retirement (as defined
in Section 3(c)) or Cause (as defined in Section 3(d)) or by the
Executive other than for Good Reason (as defined in Section
3(e)); and (iii) eighteen months from the date of a Change in
Control of the Company if the Executive has not terminated his
employment for Good Reason as of such time.
2. Change in Control. No compensation shall be payable
under this Agreement unless and until (a) there shall have been a
Change in Control of the Company, while the Executive is still an
employee of the Company and (b) the Executive's employment by the
Company thereafter shall have been terminated in accordance with
Section 3. For purposes of this Agreement, a Change in Control
means the happening of any of the following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities and Exchange
Act of 1934, other than the Company, a wholly-owned
subsidiary thereof, any employee benefit plan of the Company
or any of its Subsidiaries or a person or entity that
beneficially owns 5% or more of the Common Stock of the
Company as of the date hereof, becomes the beneficial owner
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of the Company's securities having 30% or more of the
combined voting power of the then outstanding securities of
the Company that may be cast for the election of directors
of the Company (other than as a result of an issuance of
securities initiated by the Company in the ordinary course
of business); or
(ii) as the result of, or in connection with, any cash
tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions less than a
majority of the combined voting power of the then
outstanding securities of the Company or any successor
corporation or entity entitled to vote generally in the
election of the directors of the Company or such other
corporation or entity after such transactions are held in
the aggregate by the holders of the Company's securities
entitled to vote generally in the election of directors of
the Company immediately prior
to such transaction; or
(iii) during any period of two consecutive years,
individuals who at the beginning of any such period
constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the
nomination for election by the Company's shareholders, of
each director of the Company first elected during such
period was approved by a vote of at least two-thirds of the
directors of the Company then still in office who were
directors of the Company at the beginning of any such
period.
3. Termination Following Change in Control. (a) If a
Change in Control of the Company shall have occurred while the
Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon
the subsequent termination of the Executive's employment with the
Company by the Executive or by the Company unless such
termination is as a result of (i) the Executive's death; (ii) the
Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c)
below); (iv) the Executive's termination by the Company for Cause
(as defined in Section 3(d) below); or (v) the Executive's
decision to terminate employment other than for Good Reason (as
defined in Section 3(e) below). If the lump sum severance
payment under Section 4, either alone or together with other
payments which the Executive has the right to receive from the
Company, would constitute a "parachute payment" (as define in
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code")), such lump sum payment shall be "grossed-up" by the
Company so that the Executive is in the same after-tax position
as if he did not have to pay the excise tax imposed by Section
4999 of the Code.
(b) Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall
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have been absent from his duties with the Company on a full-time
basis for six months and within 30 days after written notice of
termination is thereafter given by the Company the Executive
shall not have returned to the full-time performance of the
Executive's duties, the Company may terminate this Agreement for
"Disability."
(c) Retirement. The term "Retirement" as used in this
Agreement shall mean termination by the Company or the Executive
of the Executive's employment based on the Executive's having
reached age 65 or such other age as shall have been fixed in any
arrangement established with the Executive's consent with respect
to the Executive.
(d) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement only, the
Company shall have "Cause" to terminate the Executive's
employment hereunder only on the basis of fraud, misappropriation
or embezzlement on the part of the Executive. Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the
membership of the Company's Board of Directors (excluding the
Executive) at a meeting of the Board called and held for the
purpose (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 was guilty of conduct
set forth in the second sentence of this Section 3(d) and
specifying the particulars thereof in detail.
(e) Good Reason. The Executive may terminate the
Executive's employment for Good Reason at any time during the
term of this Agreement. For purposes of this Agreement "Good
Reason" shall mean any of the following (without the Executive's
express written consent):
(i) the assignment to the Executive by the Company of
duties inconsistent with the Executive's position, duties,
responsibilities and status with the Company immediately prior to
a Change in Control of the Company, or a change in the
Executive's titles or offices as in effect immediately prior to a
Change in Control of the Company, or any removal of the Executive
from or any failure to reelect the Executive to any of such
positions, except in connection with the termination of his
employment for Disability, Retirement or Cause or as a result of
the Executive's death or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the Executive'sbase
salary as in effect on the date hereof or as the same may be
increased from time to time during the term of this Agreement;
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(iii) a relocation of the Company's principal executive
offices to a location outside of Nashville (or Brentwood),
Tennessee, or the Executive's relocation to any place other
than the location at which the Executive performed the
Executive's duties prior to a Change in Control of the
Company, except for required travel by the Executive on the
Company's business to an extent substantially consistent
with the Executive's business travel obligations at the time
of a Change in Control of the Company;
(iv) any material breach by the Company of any
provision of this Agreement;
(v) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of
the Company; or
(vi) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 3(f), and for
purposes of this Agreement, no such purported termination shall
be effective.
(f) Notice of Termination. Any termination by the
Company pursuant to Section 3(b), 3(c) or 3(d) shall be
communicated by a Notice of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice
which shall indicate those specific termination provisions in
this Agreement relied upon and which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provisions so
indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice
of Termination.
(g) Date of Termination. "Date of Termination" shall
mean (a) if this Agreement is terminated by the Company for
Disability, 30 days after the Notice of Termination is given to
the Executive (provided that the Executive shall not have
returned to the performance of the Executive's duties on a full-
time basis during such 30-day period) or (b) if the Executive's
employment is terminated by the Company for any other reason, the
date on which a Notice of Termination is given.
4. Severance Compensation upon Termination of Employment.
(a) If the Company shall terminate the Executive's employment
other than pursuant to Section 3(b), 3(c) or 3(d) or if the
Executive shall terminate his employment for Good Reason, then
the Company shall pay to the Executive as severance pay in a lump
sum, in cash, on the fifth day following the Date of Termination,
an amount equal to the sum of (i) three times the average of the
aggregate annual salary paid to the Executive by the Company
during the three calendar years preceding the Change in Control
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of the Company and (ii) three times the highest bonus
compensation paid to the Executive for any of the three calendar
years preceding the Change in Control of the Company.
(b) In addition to the lump sum payment provided in
Section 4(a), if the Company shall terminate the Executive's
employment other than pursuant to Section 3(b), 3(c) or 3(d) or
if the Executive shall terminate his employment for Good Reason,
then the Company (at its expense) shall provide to the Executive
term life insurance and health and disability insurance
equivalent to that provided to the Executive immediately prior to
termination for a period of two years following the Date of
Termination.
(c) In addition to the benefits provided in Sections
4(a) and (b), if the Company shall terminate the Executive's
employment other than pursuant to Section 3(b), 3(c) or 3(d) or
if the Executive shall terminate his employment for Good Reason,
then all of the Executive's stock awards, including, without
limitation, restricted stock and stock options awarded to the
Executive by the Company pursuant to the Company's Stock Option
and Restricted Stock Purchase Plan, shall to the extent not
already vested and exercisable become fully vested and
exercisable. The Executive's stock options shall be exercisable
for a period of one year from the Date of Termination unless a
shorter period is required by applicable law.
5. No Obligation To Mitigate Damages; No Effect on Other
Contractual Rights. (a) The Executive shall not be required to
mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of
Termination, or otherwise.
(b) The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish the Executive's existing rights,
or rights which would accrue solely as a result of the passage of
time, under any benefit plan, incentive plan or stock option
plan, employment agreement or other contract, plan or
arrangement.
6. Successor to the Company. (a) The Company will require
any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly,
absolutely and unconditionally to 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 or
assignment had taken place. Any failure of the Company to obtain
such agreement prior to the effectiveness of any such succession
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or assignment shall be a material breach of this Agreement and
shall entitle the Executive to terminate the Executive's
employment for Good Reason. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor
or assign to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section
6 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of the law. If at any
time during the term of this Agreement the Executive is employed
by any corporation a majority of the voting securities of which
is then owned by the Company, "Company" as used in Sections 3, 4
and 11 hereof shall in addition include such employer. In such
event, the Company agrees that it shall pay or shall cause such
employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof.
(b) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die
while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
7. Notice. For purposes 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
delivered or mailed by United States registered mail, return
receipt requested, postage prepaid as follows:
If to the Company:
Comdata Holdings Corporation
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to the Executive:
Xxxxxx X. XxXxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing signed by the Executive and
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
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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 set forth
expressly in this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Tennessee.
9. Validity. The invalidity or unenforceability of any
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.
10. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
11. Legal Fees and Expenses. The Company shall pay all
legal fees and expenses which the Executive may incur as a result
of the Company's contesting the validity, enforceability or the
Executive's interpretation of, or determinations under, this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
COMDATA HOLDINGS CORPORATION
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
EXECUTIVE:
/s/Xxxxxx X. XxXxxxxx
Xxxxxx X. XxXxxxxx
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