Exhibit 10.12
SEVERANCE COMPENSATION AGREEMENT
THIS SEVERANCE COMPENSATION AGREEMENT ("Agreement") dated as of October 16,
1997 is made between GLOBE BUSINESS RESOURCES, INC., an Ohio corporation (the
"Company"), and XXXXXXX X. XXXXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company's Board of Directors has, after due deliberation,
determined that it is appropriate, and in the best interests of the Company and
its shareholders, to reinforce and to encourage the continued attention and
dedication of the Executive to his assigned duties;
NOW, THEREFORE, this Agreement sets forth the severance compensation which
the Company will pay to the Executive if the Executive's employment with the
Company terminates under one or more of the circumstances described herein:
1. Term. This Agreement shall terminate upon the earlier to occur of:
(a) the termination of the Executive's employment with the Company based on
death, Disability (as defined in Section 3(a)), Retirement (as defined in
Section 3(b)) or Cause (as defined in Section 3(c)) or by the Executive other
than for Good Reason (as defined in Section 3(d)); or
(b) two (2) years from the date of a Change in Control of the Company (as
defined herein) if the Executive has not terminated his employment for Good
Reason as of such time.
2. Definition of Change in Control. For purposes of this Agreement, a
"Change in Control of the Company" shall be deemed to have occurred if:
(i) there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger: (x) less than
fifty percent (50%) of the outstanding common shares and fifty percent
(50%) of the voting power of the outstanding shares of the surviving or
resulting corporation are owned, immediately after such consolidation or
merger, by the owners of the Company's common shares immediately prior to
such consolidation or merger; or (y) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended and as in effect on the date of this Agreement (the "Exchange
Act")) shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act, as in effect on the date of this Agreement) of
twenty-five percent (25%) or more of the surviving or resulting
corporation's outstanding common shares, or of twenty five percent (25%) or
more of the voting power of the outstanding shares of the surviving or
resulting corporation, and (z) in each such case, within two (2) years
after the consummation of such consolidation or merger, individuals who
were directors of the Company immediately prior to the public announcement
of such consolidation or
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merger cease to constitute a majority of the Board of Directors of the
Company or its successor by consolidation or merger; or
(ii) any sale, lease, exchange or other transfer or disposition (in
one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company shall be consummated; or
(iii) the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company, or
(iv) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act, as in effect on the date of this Agreement) shall
become the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act, as in effect on the date of this Agreement) of twenty-five
percent (25%) or more of the Company's outstanding common shares, or of
twenty-five percent (25%) or more of the voting power of the Company's
outstanding shares, and, within two (2) years after such person becomes
such beneficial owner, individuals who were directors of the Company
immediately prior to the public announcement of the transaction pursuant to
which such person became such beneficial owner cease to constitute a
majority of the Board of Directors of the Company; or
(v) during any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the entire Board of Directors shall
cease for any reason to constitute a majority thereof unless the election
or the nomination for election by the Company's shareholders of each new
director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Events; Notice of Termination; Date of Termination.
(a) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
with the Company on a full-time basis for six (6) months and, within thirty (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."
(b) 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 sixty-five (65) or such other age as shall
have been fixed in any arrangement established with the Executive's consent with
respect to the Executive.
(c) Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, 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
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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 (3/4) of the entire membership of the Company's Board
of Directors at a meeting of the Board of Directors called and held for the
specific purpose of considering the termination of the Executive's employment
(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 the Executive was guilty of conduct set forth in the second sentence of
this Section 3(c) and specifying the particulars thereof in reasonable detail.
(d) 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's base salary;
(iii) any failure by the Company to continue in effect any benefit
plan or arrangement (including, without limitation, the Company's
retirement plan, group life insurance plan, and medical, dental, accident
and disability plans) in which the Executive is participating without
substituting other plans providing the Executive with substantially similar
benefits (hereinafter referred to as "Benefit Plans"), or the taking of any
action by the Company which would adversely affect the Executive's
participation in, or materially reduce the Executive's benefits under, any
such Benefit Plan or deprive the Executive of any material fringe benefit
enjoyed by the Executive;
(iv) any failure by the Company to continue the Executive's
eligibility to participate in annual executive bonus arrangements (if any)
in which the Executive is participating without substituting other plans
or arrangements providing him with substantially similar benefits
(hereinafter referred to as "Incentive Plans") or the taking of any action
by the Company which would significantly reduce the Executive's opportunity
to earn incentive compensation which is related to performance results as
compared to performance expectations periodically determined by the
Company;
(v) a relocation of the Company's principal executive offices to a
location outside the Greater Cincinnati Metropolitan area, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations;
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(vi) any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled;
(vii) any material breach by the Company of any provision of this
Agreement;
(viii) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company; or
(ix) 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).
(e) Notice of Termination. Any termination by the Company pursuant to
Section 3(a), 3(b) or 3(c) shall be communicated to the Executive 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 provision so indicated. For purposes of this
Agreement, no purported termination by the Company shall be effective or have
any legal force or effect without such Notice of Termination.
(f) Date of Termination. "Date of Termination" shall mean: (i) if this
Agreement is terminated by the Company for Disability, thirty (30) days after
Notice of Termination is given to the Executive (if (and only if) the Executive
shall not have returned to the performance of the Executive's duties on a
full-time basis during such thirty (30) day period); or (ii) if the Executive's
employment is terminated by the Company for any other reason, the date on which
a Notice of Termination is given to the Executive by the Company.
4. When Compensation is Payable.
(a) Whether or not a Change in Control of the Company has occurred while
the Executive is still an employee of the Company, the Executive shall be
entitled to compensation under this Agreement if and when the Company terminates
the Executive's employment for any reason other than death, Disability (as
defined in Section 3(a)), Retirement (as defined in Section 3(b)) or Cause (as
defined in Section 3(c)).
(b) 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 compensation under this Agreement upon the subsequent termination of the
Executive's employment with the Company by the Executive or by the Company
unless such termination is a result of: (i) the
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Executive's death; (ii) the Executive's Disability (as defined in Section 3(a));
(iii) the Executive's Retirement (as defined in Section 3(b)); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(c));
or (v) the Executive's decision to terminate employment other than for Good
Reason (as defined in Section 3(d)).
5. Severance Compensation Upon Termination of Employment; Non-Competition
Covenant.
(a) If compensation is payable under this Agreement pursuant to either
Section 4(a) or Section 4(b), then the Company shall pay to the Executive: (i)
the full base salary to which the Executive is entitled through the Date of
Termination, (ii) credit for any unused vacation; and (iii) severance pay in an
amount equal to the excess over $100 of two (2) times the average of the
aggregate annual compensation paid to the Executive by the Company and any of
its subsidiaries during the two (2) calendar years preceding the termination;
provided, however, that if the severance payment under clause (iii), either
alone or together with the other payments which the Executive has the right to
receive from the Company, would constitute a "parachute payment" (as defined in
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")),
such severance payment shall be reduced to the largest amount as will result in
no portion of the severance payment under clause (iii) being subject to the
excise tax imposed by Section 4999 of the Code; and, provided, further, that, if
at the time compensation is payable under this Agreement, the Executive's
principal residence is not in the Greater Cincinnati metropolitan area, then the
severance payment amount under clause (iii) shall be the excess over $100 of one
(1) times the average annual compensation paid to the Executive by the Company
and any of its subsidiaries during the two (2) calendar year period preceding
termination. If the Company and the Executive cannot agree on the reduction, if
any, in the severance payment under clause (iii) pursuant to the first proviso
of the sentence immediately preceding, the determination of the amount of such
reduction, shall be made by tax counsel selected by the Company's independent
auditors and reasonably acceptable to the Executive, and such determination
shall be conclusive and binding on the parties. The amounts specified in clauses
(i), (ii) and (iii) above shall be paid in cash in a lump sum within thirty (30)
days following the Date of Termination. The Executive shall have no obligation
to seek other employment or take any other action in order to mitigate damages
or the amount of any payment provided for under this Agreement.
(b) The Company shall maintain in full force and effect, for the continued
benefit of the Executive until the earlier of: (i) one (1) year after the Date
of Termination; or (ii) commencement of full time employment by the Executive
with a new employer, all life insurance, medical, health and accident and
disability plans, programs or arrangements in which the Executive was entitled
to participate immediately prior to the Date of Termination, provided that
continued participation by the Executive is possible under the general terms and
provisions of such plans and programs. In the event that participation in any
such plan or program is barred, the Company shall arrange to provide to the
Executive benefits substantially similar to those which the Executive is
entitled to receive under such plans and programs.
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(c) If the Executive actually receives and accepts the compensation
described above in Sections 5(a) and 5(b), in consideration of payment of such
compensation the Executive shall not, for a period of two (2) years from the
Date of Termination, engage, directly or indirectly, whether as an officer,
director, employee, consultant, investor, or otherwise, in any business that
competes with any business in which the Company is then engaged anywhere in the
United States of America; provided, however, the period of non-competition shall
be one (1) year from the Date of Termination if the Executive receives under
clause (iii) of Section 5(a) the excess over $100 of one (1) times the average
annual compensation paid to the Executive by the Company and any of its
subsidiaries during the two (2) calendar year period preceding termination. The
Executive acknowledges the reasonableness of the geographic and temporal scope
of the foregoing non-competition covenant and agrees that, if the Executive
breaches or threatens to breach this covenant and does not cure such breach or
threatened breach within thirty (30) days after receipt of written notice from
the Company of such breach or threatened breach, the Company shall have, in
addition to the legal right to discontinue performance of its compensation
payment obligations hereunder, the right to obtain injunctive and other
equitable relief from a court of competent jurisdiction without the need to post
bond or other security. Nothing in this Section 5(c) shall prevent or preclude
the Executive from owning less than five percent (5%) of the equity of a
publicly traded company or other entity that engages in a business that competes
with the Company.
6. No Obligation to Mitigate Damages; No Effect on Other Contractual Rights.
The provisions of this Agreement, and any payment provided for hereunder,
shall not reduce any amounts otherwise payable to the Executive, 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 or Incentive Plan,
employment agreement or other contract, plan or arrangement.
7. Successor to the Company.
(a) The Company shall 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 reasonably 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 such succession or assignment had not taken place. Any failure of
the Company to obtain such agreement prior to the effectiveness of any such
succession 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 7 or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of 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 4, 5 and 12
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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.
8. 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
certified or registered mail, return receipt requested, postage prepaid, as
follows:
If to the Company:
Globe Business Resources, Inc.
00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Attention: Chairman
with a required copy to:
Xxxxxxx, Muething & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Executive:
Xxxxxxx X. Xxxxxxxx
13649 Iroquois
Xxxxxx, XX 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.
9. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in a
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 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 a prior or subsequent time. No agreements or representatives,
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 internal substantive laws of the State of Ohio.
10. 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.
11. 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.
12. Legal Fees and Expenses. The Company shall indemnify and hold harmless
the Executive from and therefore shall pay, within ten (10) days after demand
therefor by the Executive, all legal fees and expenses that 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
and year first above written.
ATTEST: GLOBE BUSINESS RESOURCES, INC.
Xxxxxxxx X. Xxxx By: Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chairman
Xxxxx Xxxxxx
---------------------------------
EXECUTIVE
Xxxxxxxx X. Xxxx Xxxxxxx X. Xxxxxxxx
--------------------------------- -----------------------------------
XXXXXXX X. XXXXXXXX
Xxxxx Xxxxxx
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