EXHIBIT 10.46
September 26, 2002
VIA HAND DELIVERY
Xxxxxxx X. Xxxxx
Dear Xxxx:
This letter confirms our agreement to amend and restate the severance
arrangements provided in our letter agreement with you dated August 25, 2000.
This document will speak as of its original date, i.e., August 25, 2000. In
connection with the planned corporate restructuring announced today, and to
recognize the value of your contribution to the effort and encourage you to
remain employed with Colorado MEDtech, Inc. ("CMED" or the "Company"), through
the restructuring, you are eligible for the following:
1. If, prior to June 30, 2004, CMED completes:
(a) a merger, stock swap, change in control, or sale of
substantially all of its assets (an "entity trigger event"), then:
(i) If, at the time of, or within forty-five
days prior to closing of an entity trigger event, or within twelve (12) months
after closing of an entity trigger event your employment is terminated by the
Company without cause, or if you voluntarily terminate your employment for good
reason, then severance is payable. Severance payments shall commence two weeks
after closing of an entity trigger event.
(ii) If your employment is not terminated, or
within 10 days after the entity trigger event you are offered substitute
employment with the successor entity at a level which would not give you good
reason not to accept, then no severance is payable. If you are not terminated or
if you accept such offered employment, a 12-month tail period will begin. If
within the tail period your employment is terminated by the Company or the
successor employer without cause, or if you voluntarily terminate your
employment for good reason, then severance is payable, and severance payments
shall commence two weeks after termination.
or:
(b) a sale of a significant portion of the assets of any
operating division of CMED (treating CIVCO as an operating division, and
including a merger, stock swap or change in control of CIVCO) or closure and
discontinuance of operation of any such operating division (a "division trigger
event"), then the same rules apply as in subparagraph (a), above, but if you
remain employed by the Company after a division trigger event then the tail
period shall restart after each division trigger event.
2. For purposes of this letter:
(a) "Severance", which shall be considered liquidated damages
in lieu of any other payments or obligations of the Company in connection with
your employment or termination, means continuation of your base salary payments:
for twelve (12) months following the date of termination ("Severance Period").
Payment of severance will be conditioned upon your execution of, and full
compliance with, a Request for Post-Employment Allowance in the form attached
hereto as Exhibit A. The Company shall make adequate provision for payment of
all severance payment obligations.
(b) For purposes of this letter, your employment with the
Company shall be deemed terminated for "Cause" only if it is terminated by the
Company for:
(i) misappropriation of corporate confidential
information (or unauthorized disclosure thereof) or funds by you or with your
direct involvement;
(ii) fraud, embezzlement, theft or dishonesty by you \
reasonably suspected by the Company; or
(iii) negligent or willful misconduct or dereliction of
duty by you; provided, however, that no discharge shall be deemed for Cause
under this clause (iii) unless you shall have first received written notice from
the Company advising you of the specific acts or omissions alleged to constitute
such negligent or willful misconduct, and such misconduct continues uncured by
you for a period of twenty (20) days.
(c) "Good Reason" shall exist if you: (1) are demoted
from the position you held prior to an entity trigger event or division trigger
event; (2) are assigned duties inconsistent with your roles and responsibilities
prior to an entity trigger event or division trigger event; (3) are required to
materially increase your travel obligations from those you had prior to an
entity trigger event or division trigger event; (4) are relocated to an office
or site greater than 50 miles from your location prior to an entity trigger
event or division trigger event; or (5) your compensation or benefits are
materially reduced (including paid time off and vacation).
(d) A "change of control of the Company" will be deemed to
occur under either of the following circumstances: (A) any "person" (as that
term is used in Section 13(d) and 14(d) of the Exchange Act), other than the
Company or any "person" who on the date hereof is a director or officer of the
Company, is or becomes the "beneficial owner" (as defined in
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Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing forty percent (40%) or more of the combined voting power of
the Company's then outstanding securities, or (B) if, at any time during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing
at least two-thirds of the directors then in office who were directors at the
beginning of the period.
3. If, after termination, you elect to continue your group health
insurance coverage through COBRA, the Company will also pay the monthly medical
insurance premium payment required to maintain your then current medical
insurance coverage (less any amount you are paying for such insurance at the
time of termination, which amount will continue to be required from you by the
beginning of each month) after termination for the duration of the Severance
Period or until you obtain new employment, whichever occurs first. If you fail
to make any required payment, the Company's payment obligations under this
paragraph will terminate.
4. In the event you retain counsel to enforce this letter the Company
will reimburse you for reasonable attorneys fees and costs associated with such
effort. If any action at law or in equity is necessary to enforce or interpret
the terms of this letter, the prevailing party shall be entitled to reasonable
attorneys fees, costs and necessary disbursements in addition to any other
relief to which that party may be entitled.
5. The terms and existence of this letter agreement are confidential.
This letter shall not by itself constitute an agreement for a specific
term of employment. EITHER YOU OR THE COMPANY MAY TERMINATE YOUR EMPLOYMENT AT
ANY TIME AND FOR ANY REASON.
COLORADO MEDTECH, INC. AGREED AND ACCEPTED:
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx
President and Chief Executive Officer
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EXHIBIT A
REQUEST FOR POST-EMPLOYMENT ALLOWANCE
This request for severance allowance is made by Xxxxxxx X. Xxxxx ("the
Employee") pursuant to the provisions of the letter agreement (the "Agreement")
between the Employee and Colorado MEDtech, Inc. (the "Company").
1. In consideration of the execution of this request for
post-employment allowance, the Company agrees to pay me the
amount set forth in the Agreement.
2. Upon receipt of these payments, I fully and finally release,
waive and discharge Company, including any of its parents,
subsidiaries, or otherwise affiliated corporations,
partnerships or business enterprises, and their respective
present and former directors, shareholders, employees,
assigns, insurers and employee benefit administrators
(hereinafter "Released Parties") from all charges, claims and
causes of action of any sort which I may have, including but
not limited to, claims arising from or related to my
employment or termination of my employment, any age, race, any
unlawful employment practices of any kind, whether such claims
arise under federal, state, local, common, contract, tort or
other laws or regulations, specifically including Title VII of
the Civil Rights Act of 1964 as amended by the Equal
Employment Opportunity Act of 1972 and the Age Discrimination
in Employment Act, 42 U.S.C. Section 1981. BY SIGNING THIS
AGREEMENT, I ACKNOWLEDGE THAT COMPANY HAS ADVISED ME TO
DISCUSS THIS AGREEMENT WITH AN ATTORNEY BEFORE SIGNING IT. I
further acknowledge and agree that the Company is not
responsible for any of my costs, expenses, and attorneys'
fees, if any, incurred in connection with the review and
signing of this Agreement. I acknowledge that I have been
given a period of at least twenty-one (21) days in which to
consider the terms of this Agreement. If I have chosen to
waive the twenty-one day period, I represent that I did so
voluntarily without any pressure by Company. I also
understands that I have the right to revoke this Agreement at
any time within seven (7) days after signing it, by providing
written notice to Company, and that upon such revocation, this
Agreement will not have any further legal effect.
3. I represent and warrant that I have returned all property of
the Company in my possession, including but not limited to,
documents, manuals, pertinent business contacts (names and
addresses), shareholder lists, software, computers and
computer disks, notes, keys, cellular phone, and other
articles or equipment I used in the course of my employment.
4. It is understood that the Company does not admit the existence
or validity of any such claims or any liability of any sort
nor has the Company made any agreement or promise to do or
omit to do any act or thing not herein set forth.
5. I agree that I will not disclose this document or its terms or
provisions without first obtaining the written consent of the
Company.
6. I understand that this Request shall be governed by Colorado
law.
7. I have read and completely understand this request and
recognize that it constitutes a general release and waiver of
all claims, and I agree that this is an acceptable compromise
of any such claims and knowingly and voluntarily intend to be
bound by these provisions without any further promises or
consideration by the Company. I further agree that this
agreement terminates all other agreements between myself and
the Company, excluding any non-disclosure or non-compete
obligations which may survive my employment. As such, except
as provided in this Agreement, I am not entitled to any other
benefits as a result of my separation.
EMPLOYEE:
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Date
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