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Exhibit 10(f)
SEVERANCE AGREEMENT
AGREEMENT made as of the _____ of _________, 199_, between Xxxxx-Xxxxx
Communications, Inc., a Delaware corporation (the "Company"), and
___________________ (the "Executive").
WHEREAS, the Executive is currently serving as __________________ Vice
President of the Company;
WHEREAS, the Executive possesses an intimate knowledge of the business
and affairs of the Company, its policies, methods, personnel and plans for the
future and has acquired contacts of considerable value to the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the growth and success of the Company has
been substantial and wishes to offer an inducement to the Executive to remain in
the employ of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, this Agreement sets
forth benefits which the Company will pay to Executive in the event of
termination of Executive's employment under the circumstances described herein:
1. Term. Except as otherwise provided in Section 4, the term of
this Agreement shall be effective upon a Change in Control (as defined herein)
and continue until the earlier of (i) the expiration of the second anniversary
of the occurrence of a Change in Control, (ii) the Executive's death, or (iii)
the Executive's earlier voluntary retirement (except as provided in Section
3(a)(2)) (the "Term").
2. Definitions.
(a) Cause. For "Cause" means that the Executive shall have
committed:
(i) an intentional material act of fraud or embezzlement
in connection with his duties or in the course of his
employment with the Company;
(ii) intentional wrongful material damage to property of
the Company; or
(iii) intentional wrongful disclosure of material secret
processes or material confidential information of the Company.
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For the purposes of this Agreement, no act, or failure to act,
on the part of the Executive will be deemed "intentional"
unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that his action or
omission was in the best interest of the Company.
(b) Change in Control. A "Change in Control" of the Company
shall have occurred if any of the following events shall occur:
(i) The Company is merged, consolidated or reorganized
into or with another corporation or other legal person and as
a result of such merger, consolidation or reorganization less
than 60% of the combined voting power of the then outstanding
securities of the remaining corporation or legal person or its
ultimate parent immediately after such transaction is received
in respect of or in exchange for voting securities of the
Company pursuant to such transaction;
(ii) The Company sells all or substantially all of its
assets to any other corporation or other legal person and as a
result of such sale less than 60% of the combined voting power
of the then outstanding securities of such corporation or
legal person or its ultimate parent immediately after such
transaction is received in respect of or in exchange for
voting securities of the Company pursuant to such sale;
(iii) Any person (including any "person" as such term is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act), has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities
which when added to any securities already owned by such
person would represent in the aggregate 30% or more of the
combined voting power of the then outstanding securities of
the Company; or
(iv) Such other events that cause a Change in Control of
the Company as determined by the Board in its sole discretion.
(c) Code. The "Code" shall mean the Internal Revenue Code of
1986, as amended.
(d) Disability. "Disability" shall have the meaning given to
disability in the Company's long term disability insurance plan.
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(e) Severance Compensation. The "Severance Compensation" shall
be a lump sum cash amount equal to 200% of the sum of (A) the annual
base salary of the Executive in effect immediately prior to the Change
in Control or the Termination Date, whichever is larger, plus (B) the
average of the bonus or incentive compensation of the Executive,
received from the Company for the two fiscal years preceding the year
in which the Change in Control occurred or for the two fiscal years
preceding the year in which the Termination Date occurs, whichever is
larger.
(f) Termination Date. The "Termination Date" shall be the date
upon which the Executive or the Company terminates the employment of
the Executive.
3. Rights of Executive Upon Change in Control and Termination.
(a) The Company shall provide the Executive, within ten days
following the Termination Date, Severance Compensation in lieu of
compensation to the Executive for periods subsequent to the Termination
Date, if, following the occurrence of a Change in Control, any of the
following events shall occur:
(1) the Company terminates the Executive's employment
during the Term of this Agreement other than for any of the
following reasons:
(i) the Executive dies;
(ii) the Executive suffers a Disability and is unable
to work for a period of 180 consecutive days; or
(iii) for Cause,
(2) the Executive terminates his employment after such
Change in Control and the occurrence of at least one of the
following events:
(i) A material adverse change in the nature or scope
of the authorities, functions or duties attached to the
position with the Company that the Executive had
immediately prior to the Change in Control; a reduction
in the Executive's salary, bonus or incentive
compensation or a significant reduction in scope or value
of other monetary or nonmonetary benefits (other than
benefits pursuant to a broad based employee benefit plan)
to which the Executive was entitled from the Company
immediately prior to the Change in Control, any of which
is not remedied within ten calendar days after receipt by
the Company of written notice from the Executive of such
change, reduction, alteration or termination, as the case
may be;
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(ii) A determination by the Executive made in good
faith that as a result of a Change in Control and a
change in circumstances thereafter, he has been rendered
substantially unable to carry out, or has been
substantially hindered in the performance of, the
authorities, functions or duties attached to his position
immediately prior to the Change in Control, which
situation is not remedied within ten calendar days after
receipt by the Company of written notice from the
Executive of such determination;
(iii) The Company shall require the Executive to
relocate his principal location of work from the location
thereof immediately prior to the Change in Control, or to
travel away from his office in the course of discharging
his responsibilities or duties significantly more than
required of him prior to the Change in Control without,
in either case, the Executive's prior written consent; or
(iv) the Company commits any material breach of this
Agreement.
(3) the Executive terminates his employment for any
reason during the 30-day period following the first
anniversary of the Change in Control.
(b) Severance Compensation pursuant to this Section 3 will not
be subject to setoff or mitigation.
(c) Upon a Change in Control, or in the event the Company
becomes obligated to make the payments specified in Section 4(a), all
stock options previously granted by the Company to the Executive and
not yet exercised will become vested and fully exercisable by the
Executive. Such options shall remain exercisable for their original
term; provided, however, that the Company has the right to require the
Executive to exercise such options within 90 days after receipt of
written notice to the Executive. If the Executive fails to exercise his
options within such 90-day period, the Company has the right to cancel
the options.
(d) In the event the Company becomes obligated hereunder to
pay the Executive the Severance Compensation or the payments specified
in Section 4(a), the Company shall also pay the Executive a lump sum
cash payment in the amount necessary to make continuation coverage
(COBRA) payments under the Company's group health insurance plan for a
period of 18 months.
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(e) Notwithstanding the above section or any other provision
of this Agreement, in no event shall the Company pay or be obligated to
pay the Executive an amount which would be an Excess Parachute Payment.
For purposes of this Agreement, the term "Excess Parachute Payment"
shall mean any payment or any portion thereof which would be an "excess
parachute payment" within the meaning of Section 280G of the Code, and
would result in the imposition of an excise tax under Section 4999 of
the Code, in the opinion of tax counsel selected by the Company and
acceptable to the Executive. To the extent that the payments hereunder
must be reduced to avoid any Excess Parachute Payment, such reduction
shall be applied in the following order:
(i) to cash amounts payable as Severance
Compensation;
(ii) to amounts payable for the maintenance of
continuation coverage (COBRA) payments under the
Company's group health insurance plan;
(iii) to the accelerated vesting of options as
provided in Section 3(c).
4. Additional Rights of Executive Prior to Change in Control.
(a) In the event the employment of the Executive with the
Company is terminated prior to a Change in Control, the Company shall
provide the Executive, within ten days following the Termination Date,
Severance Compensation in lien of compensation to the Executive for
periods subsequent to the Termination Date, if, and only if,
(i) the Company terminates the Executive's employment
without "Justification" (as defined herein); or
(ii) the Executive terminates his employment with
"Good Reason" (as defined herein).
(b) "Justification" means that the Executive shall have (i)
committed an act of fraud, dishonesty, gross misconduct or other
unethical practices, or (ii) materially failed to perform his duties to
the satisfaction of the chief executive officer of the Company, which
failure has not been cured within 60 days after receipt of written
notice from the chief executive officer.
(c) With "Good Reason" means that the Executive shall have
terminated his employment following a reduction (which is instituted
without his consent and which is not rescinded within 30 days after the
Executive delivers written notice of objection to the chief executive
officer) in his functions, duties or responsibilities (i) to a level
that is not commensurate with those of an executive in the position of
the Executive prior to such reduction (it being understood that the
reassignment of any of the Executive's functions, duties or
responsibilities to one or more persons who report directly or
indirectly to the Executive is not such a reduction), or (ii) which
causes the Employee's position with the Company to become one of lesser
importance or scope.
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5. Successors; Binding Agreement. This Agreement will be binding upon
the Company, its successors and assigns, and all rights of the Executive
hereunder 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.
6. Notice. The Company shall give written notice to Executive within
ten days after any Change in Control. Failure to give such notice shall
constitute a material breach of this Agreement. 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 received
after being mailed by United States registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
----------------------------
c/o Xxxxx-Xxxxx Communications, Inc.
000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
If to the Company:
Xxxxx-Xxxxx Communications, Inc.
000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
or to such other address as any 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.
7. 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 such officer as may be specifically
designated by the Board. No waiver by either 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, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the substantive laws of the State of Delaware, without regard to principles
of conflicts of law. This Agreement replaces any prior severance agreement
between the Company and the Executive.
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8. Validity. The invalidity or unenforceability of any provision or
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.
9. Employment Rights. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the Executive to
have the Executive remain in the employment of the Company prior to any Change
in Control; provided, however, that any termination of employment of the
Executive or removal of the Executive as an elected officer of the Company
following the commencement of any discussion authorized by the Board of
Directors of the Company with a third person that ultimately results in a Change
in Control shall be deemed to be a termination or removal of the Executive after
a Change in Control for purposes of this Agreement and shall entitle the
Executive to all Severance Compensation. Notwithstanding any other provision
hereof to the contrary, the Executive may, at any time during his employment
with the Company upon the giving of 30 days prior written notice, terminate his
employment hereunder. If this Agreement or the employment of the Executive is
terminated under circumstances in which the Executive is not entitled to any
Severance Compensation, neither the Executive nor the Company shall have any
further obligation or liability hereunder.
10. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling; provided,
however, that no withholding pursuant to Section 4999 of the Code shall be made
unless, in the opinion of tax counsel selected by the Company and acceptable to
the Executive, such withholding relates to payments which result in the
imposition of an excise tax pursuant to Section 4999 of the Code.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.
XXXXX-XXXXX COMMUNICATIONS, INC.
By:
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Title:
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NAME OF EXECUTIVE
