SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
EXECUTIVE SEVERANCE AGREEMENT
SECTION 1: RECITAL
THIS AGREEMENT ("Agreement") is made as of June 1, 2001 (the "Effective
Date") by and between SYSTEMS & COMPUTER TECHNOLOGY CORPORATION (the "Company")
and _______________ ("Executive").
SECTION 2: DEFINITIONS
The following terms, as used herein, shall have the meaning specified:
"Cause" means Cause as defined in the Executive's employment agreement
with the Company or, in the absence of such a contract or definition, (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 an employment agreement providing for such
Good Reason termination) after a written demand for substantial performance is
delivered to the Executive by the Company, which demand specifically identifies
the manner in which the Company 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.
"Change in Control" means any of the following to occur:
(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"); or
(ii) Approval by stockholders of the Company of (A) a merger,
reorganization or consolidation involving the Company if the stockholders 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 stockholders of the Company of shares in a
share exchange if the stockholders 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.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Systems & Computer Technology Corporation and its
successors and shall include any subsidiaries of the Company, except where the
context indicates otherwise.
"Employee" means an employee of the Company.
"Good Reason" means, the occurrence (without Executive's express
written consent) of any one of the following acts by the Company or any
successor, or failures by the Company or any successor to act unless, in the
case of any act or failure to act, such act or failure to act is corrected
without any detriment to Executive within five (5) business days after notice by
the Executive to the Company:
(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;
(ii) a reduction by the Company in the Executive's
compensation or benefits (unless the benefits are changed in a consistent manner
for all employees of the Company) on the date hereof or as may be increased from
time to time;
(iii) the relocation by the Company of its principal executive
offices to a location more than thirty (30) miles from the location of such
office as of the date hereof or the Company's requiring Executive to be based
anywhere other than the Company's principal executive offices, except for
required travel on the Company's business to the extent substantially consistent
with the Executive's present obligations;
(iv) the failure by the Company to pay 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;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates which is material to the
Executive's total compensation, 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; or
(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 (unless
the benefits are changed in a consistent manner for all employees of the
Company), 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 (unless the benefits are
changed in a consistent manner for all employees of the Company), 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.
SECTION 3: EMPLOYMENT AND SEVERANCE
(a) Retention. Executive shall continue to serve in his current
capacity. This Agreement supercedes any other agreement between Executive and
the Company relating to severance or termination of employment with the Company
other than the Change in Control Agreement described in Section 3(d), which
agreement continues in full force and effect in accordance with its terms.
(b) Severance. If Executive's employment by the Company terminates for
any reason prior to a Change in Control, except as provided below, the Company
shall pay Executive the severance benefits set forth in paragraph (c) of this
Section 3; provided, however, that such severance benefits shall not be payable
if Executive's employment is terminated prior to a Change in Control by reason
of Executive's death, by the Company for Cause or by the Executive other than
for Good Reason.
(c) Severance Benefits. The severance benefits payable hereunder shall
be: (1) a cash amount equal to two times the Executive's annual base salary as
in effect on the date of termination of employment; (2) continuation of all
employer-provided insurance coverage (or benefits self-insured by the Company,
if any), subject to any insurance policy limitations and the additional
limitations described below, for two years following the date of termination of
employment; (3) all options to purchase securities of the Company held by the
Executive on the date of termination of his employment shall immediately vest on
such date and Executive may exercise the options for two years following the
date of termination of employment; and (4) if applicable, an additional sum of
cash which compensates Executive in full for the imposition of any additional
income tax and/or excise tax or penalty under Section 4999 of the Internal
Revenue Code ("Code") or otherwise imposed on account of any payment hereunder
being determined by the Company or the Internal Revenue Service to be a
parachute payment under Section 280G of the Code. The Company has determined
that it cannot (without adverse tax consequences under applicable Code
requirements) allow Executive to continue in its health benefit plans at the
Company's expense after termination. In lieu of such health plan continuation
(as otherwise provided in clause (2)), the Company shall provide Executive: (i)
during the first 18 months, an amount of taxable compensation sufficient to
reimburse the Executive for his cost of healthcare continuation coverage under
the Company's health plan pursuant to the COBRA continuation requirements (set
forth in Section 4980B of the Code); and (ii) during months 19-24 an amount
sufficient to purchase an individual health insurance policy (as made available
on a guaranteed issue basis in Executive's state of residence). With respect to
the payments for months 19-24 as set forth in (ii) above, the Company shall also
pay to Executive an additional amount ("gross-up") which, after payment of all
taxes in connection with such gross-up, results in Executive's being in the same
after-tax position as if such individual health insurance coverage had been
provided on a wholly tax-free basis. Executive shall be required to take any
necessary steps to elect COBRA continuation coverage and apply for individual
health insurance coverage at the end of the COBRA continuation period. If either
COBRA or individual health insurance coverage is or becomes unavailable (e.g.,
because the Executive receives coverage from another employer) the Company shall
continue to make monthly payments to the Executive equal to the monthly COBRA
amount hereunder, which shall be taxable to the Executive with respect to the
payments for months 1-18 and which shall be grossed-up to the Executive with
respect to the payments for months 19-24. If the Company subsequently determines
that it can allow Executive to participate in its health benefit plans without
adverse tax consequences to either itself or Executive, it may elect to do so in
lieu of reimbursing Executive for COBRA and/or individual health insurance
coverage as set forth herein; provided however that if the Company's
determination is incorrect and Executive is subject to adverse tax consequences
as a result, then the Company shall make such additional payments to Executive
so that Executive is in the same after-tax position as if such benefits had been
provided on a wholly tax-free basis. Except as otherwise set forth herein, the
cash amounts due under this Section 3 shall be paid in a single sum immediately
upon the termination of Executive's employment.
(d) Credit Against Change in Control Agreement. Executive and the
Company have previously entered into a separate Severance Agreement dated as of
April 21, 1999 (the "Change in Control Agreement"), which shall continue in full
force and effect in accordance with its terms. Any amount paid under this
Section 3 (or the value of any benefit provided hereunder, as reasonably
determined by the Company) shall be a credit against any amount otherwise
payable by the Company under the Change in Control Agreement. Payments made
under any other agreement between Executive and the Company shall not be
credited against payments made hereunder unless such other agreement
specifically provides for such a credit.
(e) Release. The payment of any severance amounts under this Section 3
shall be conditioned on the execution by the Executive of a then-current release
of all claims against the Company, in form and substance reasonably satisfactory
to the Company.
SECTION 4: ADMINISTRATION
(a) In General. The Company shall have full and complete authority, in
its sole and absolute discretion, (i) to exercise all of the powers granted to
it under this Agreement, (ii) to construe, interpret and implement this
Agreement and any related document, (iii) to prescribe, amend and rescind rules
relating to this Agreement, (iv) to make all determinations necessary or
advisable in administering this Agreement, and (v) to correct any defect, supply
any omission and reconcile any inconsistency in this Agreement.
(b) Appointment of Experts. The Company may appoint such accountants,
counsel, and other experts as it deems necessary or desirable in connection with
the administration of this Agreement.
(c) Delegation. The Company may delegate to Employees the authority to
execute and deliver such instruments and documents, to do all such acts and
things, and to take all such other steps deemed necessary, advisable or
convenient for the effective administration of this Agreement in accordance with
its terms and purposes.
(d) Code Section 162(m). It is the intent of the Company that this
Agreement satisfy the applicable requirements of Code section 162(m) so that the
Company's tax deduction for remuneration in respect of this Agreement for
services performed by the Executive is not disallowed in whole or in part by the
operation of such Code section. If any provision of this Agreement would
otherwise frustrate or conflict with such intent, that provision to the extent
possible shall be interpreted and deemed amended so as to avoid such conflict,
but no such conflict shall serve to divest the Executive of any right otherwise
conferred by this Agreement.
SECTION 5: MISCELLANEOUS
(a) Nonassignability. No amount or right under this Agreement will be
assignable or transferable (including pursuant to a pledge or security interest)
other than by will or by laws of descent and distribution.
(b) Tax Withholding. Whenever payments are to be made hereunder, the
Company will withhold therefrom, or from any other amounts payable to or in
respect of the Executive, an amount sufficient to satisfy any applicable
governmental tax withholding requirements related thereto.
(c) Other Payments. Except as expressly set forth in section 3(d),
nothing contained in this Agreement will be deemed in any way to limit or
restrict the Company from making any payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.
(d) Payments to Other Persons. If payments are legally required to be
made to any person other than the person to whom any amount is payable under
this Agreement, such payments will be made accordingly. Any such payment will be
a complete discharge of the liability of the Company under this Agreement.
(e) No Right of Employment. Except as specifically set forth herein,
nothing in this Agreement will be construed as creating any contract of
employment or conferring upon the Executive or any other person any right to
continue in the employ or other service of the Company or limit in any way the
right of the Company to change such person's compensation or other benefits or
to terminate the employment or other service of such person with or without
Cause.
(f) Section Headings. The section headings contained herein are for
convenience only, and in the event of any conflict, the text of this Agreement,
rather than the section headings, will control.
(g) Notices. All notices and other communications required or permitted
under this Agreement must be in writing and will be deemed given when: Delivered
personally; sent by United States registered or certified mail, return receipt
requested; transmitted by facsimile confirmed by United States first class mail;
or sent by overnight courier. Notices to the Company shall be sent to 0 Xxxxxxx
Xxxx Xxxx, Xxxxxxx, XX 00000, Attention: General Counsel (FAX number (610)
000-0000), and notices to Executive shall be sent to Executive's last known
residence address and/or fax number contained in the Company's records, or to
such other place as either party may subsequently designate for its receipt of
notices.
(h) Invalidity. If any term or provision contained herein is to any
extent invalid or unenforceable, such term or provision will be reformed so that
it is valid, and such invalidity or unenforceability will not affect any other
provision or part hereof.
(i) Applicable Law. This Agreement will be governed by the laws of the
Commonwealth of Pennsylvania, as determined without regard to the conflict of
laws principles thereof.
(j) Effective Date. This Agreement shall be effective as of June 1,
2001.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Company and Executive have executed this Agreement as of the date first above
written.
ATTEST: SYSTEMS & COMPUTER TECHNOLOGY
CORPORATION
By: ___________________________
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Secretary
EXECUTIVE
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