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EXHIBIt 10.2
BRIGHT HORIZONS FAMILY SOLUTIONS, INC.
SEVERANCE AGREEMENT
March 28, 2001
Xxxx Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx Xxx:
WHEREAS the Board of Directors (the "Board") of Bright Horizons Family
Solutions, Inc. (the "Company") has determined that it is in the best interests
of the Company and its stockholders for the Company to agree to provide benefits
to those members of management, including yourself, who are responsible for the
policy-making functions of the Company and the overall viability of the
Company's business, in the event that you should leave the employ of the Company
under the circumstances described below;
WHEREAS the Board recognizes that the possibility of a change of
control of the Company is unsettling to such members of management, including
yourself, and desires to make these arrangements at this time to help assure a
continuing dedication by you and your fellow members of management to your
duties to the Company and its stockholders, notwithstanding the occurrence
hereafter of attempts to gain control of the Company and the resultant
disruptive effects on the management of the Company's business;
WHEREAS the Board believes it important, should the Company
receive proposals from third parties with respect to its
future, to enable you, without being influenced by the
uncertainties of your own employment situation and in
addition to your regular duties, to assess and advise the
Board whether such proposals would be in the best
interests of the Company and its stockholders and to take
such other action regarding such proposals as the Board
might determine to be appropriate; and
WHEREAS the Board also wishes to demonstrate to executives of the
Company that the Company is concerned with the welfare of its
executives and intends to see that loyal executives are treated fairly;
NOW, THEREFORE, to assure the Company that it will have your continued
dedication and the availability of your advice and counsel notwithstanding the
possibility, threat or occurrence of a bid to take over control of the Company,
and to induce you to remain in the employ of the Company, and for other good and
valuable consideration, the Company and you agree as follows:
1. Employee's Undertaking. You agree that, in the event that any Person begins a
tender or exchange offer, circulates a proxy to the Company's stockholders or
takes other steps to effect a Change of Control, you will not voluntarily leave
the employ of the Company and will faithfully and diligently render the services
contemplated in the recitals
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to this Agreement until such Person has abandoned or terminated his efforts to
effect a Change of Control or until a Change of Control has occurred.
2. Severance Benefits. In the event that, within twenty-four (24) months after a
Change of Control, your employment with the Company is terminated for any reason
other than for Cause or death or disability or you terminate your employment for
Good Reason, the Company will provide you the following severance pay and
benefits, subject to your continued performance under this Agreement and to the
further provisions of this Agreement:
2.1 Within thirty (30) days of such termination of employment, the
Company will pay your annual base salary accrued through the
date of such termination to the extent not theretofore paid
and a prorated portion of any bonus payable for the fiscal year
in which the date of termination occurs.
2.2 So long as you are not in breach of any provision of this
Agreement, the Company will provide you severance pay following the termination
of your employment (i) for a period equal to the number of months that you have
been employed by the Company, not to exceed twenty four (24) months or (ii)
until you secure other employment, whichever is less (the 'Severance Payment
Period'). Weekly severance pay shall equal one twenty-sixth (1/26) of your total
base salary and cash bonus compensation for the last two years of your
employment, provided, however, that if you have been employed by the Company for
less than two years, such monthly severance pay shall equal the quotient of (i)
the total base salary and cash bonus compensation paid to you during your
employment with the Company and (ii) the total number of months that you have
been employed by the Company, which for purposes hereof shall include the month
of termination. Severance payments shall be made in accordance with the
Company's regular payroll practices and shall be reduced by taxes and all other
legally-required deductions.
2.3 If you elect to continue your participation and that of your
eligible dependents in the Company's group health plans in accordance with
applicable federal law following termination of your employment, then, for a
period of twenty-four (24) months from the date your employment terminates or
until you become eligible for coverage under the group health plans of another
employer, whichever is less, the Company will pay the premiums for such
participation; provided, however, that if your continued participation in the
Company's group health plans is not possible under the terms of those plans, the
Company shall instead arrange to provide you and your dependents substantially
similar benefits upon comparable terms or pay you an amount equal to the full
cash value thereof in cash. Your participation in all other employee benefits
plans will cease on the date your employment terminates, in accordance with the
terms of those plans.
3. Stock Options. Notwithstanding any provision of any stock option or
comparable plan of the Company or option agreements thereunder, all options
granted you under such plan and not then exercised, expired, surrendered or
canceled shall vest immediately prior to a Change in Control, except in the
event that such vesting would preclude the pooling method of accounting for the
specific transaction that resulted in such Change in Control.
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4. Payments Upon Termination or Resignation Without a Change in Control
4.1 Payments Upon Termination for Cause, Death, Disability or Voluntary
Resignation. If (a) the Company at any time terminates the Employee's employment
for Cause or (b) the Employee voluntarily resigns for any reason other than Good
reason, then in each case the Employee shall be entitled to receive only her
Base Salary and any other accrued benefits due Employee on a pro rata basis to
the date of termination plus reimbursement of expenses through the date of
termination. If the Employee at any time dies or becomes disabled (being defined
as the inability of the Employee to perform his/her normal employment duties for
a consecutive six (6) month period during the term of their Agreement because of
either physical or mental incapacity), the Employee shall be entitled to receive
only his/her Base Salary and any other accrued benefits due Employee and any
incentive bonus compensation on a pro rata basis and reimbursement of expenses
to the date of termination. "Pro rata" shall mean the product of the Employee's
annual Base Salary and any incentive bonus compensation that would have been
payable had the Employee's employment not terminated multiplied by a fraction
the denominator of which is 365 and the numerator of which is the number of days
during the calendar year that have passed through the date of the termination of
the Employee's employment.
4.2 Payments Upon Termination Without Cause or Resignation for Good Reason.
If the Company terminates the Employee's employment without Cause or the
Employee resigns for Good Reason, then in either case the Employee shall be
entitled to receive bi-weekly severance payments for a period of one (1) year
from the date of Termination at his/her Base Salary, with all benefits and taxes
handled in the same manner as described in paragraph 2 above, plus any incentive
bonus compensation and any other accrued benefit due Employee on a pro rata
basis through date of termination.
5. Competitive Activities and Other Claims.
5.1 You agree that at any time during the Severance Payment Period, you
will not, directly or indirectly, whether as owner, partner, investor,
consultant, agent, employee or otherwise, compete with the business of the
Company or any of its subsidiaries or affiliates or undertake any active
planning for any business competitive with that of the Company or any of its
subsidiaries or affiliates in any geographic area in which the Company does
business or is formally planning at any time prior to the termination of your
employment to do business, without the prior written consent of the Board.
5.2 In the event of termination of your employment under the circumstances
described herein, the arrangements provided for by this Agreement, by any stock
option or other written agreement between you and the Company in effect at that
time and by any applicable employee benefit plans of the Company in effect at
that time (in each case as modified by this Agreement) will constitute the
entire obligation of the Company to you and performance by the Company will
constitute full settlement of any claim that you might otherwise assert against
the Company or any of its subsidiaries or affiliates on account of such
termination.
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6. Confidentiality.
You acknowledge that the Company and its subsidiaries and affiliates
continually develop Confidential Information, that you may develop Confidential
Information for the Company or its subsidiaries and affiliates, and that you may
learn of Confidential Information during the course of employment. You agree
that all Confidential Information that you create or to which you have access as
a result of your employment is and shall remain the sole and exclusive property
of the Company and that you will comply with the policies and procedures of the
Company and its subsidiaries and affiliates for protecting Confidential
Information. You further agree that, except as required for the proper
performance of your duties for the Company or as required by applicable law (and
then only to the extent required), you will not, directly or indirectly, use for
your own benefit or gain, or assist others in the application of or disclose any
Confidential Information. You understand and agree that these restrictions will
continue to apply after your employment terminates, regardless of the reason for
termination and regardless of whether you are receiving or are entitled to
receive any payments or other benefits under this Agreement.
7. Enforceability and Remedies.
7.1 You agree that the restrictions on, and other provisions relating to,
your activities contained in this Agreement are fully reasonable and necessary
to protect the goodwill, Confidential Information and other legitimate interests
of the Company. You also acknowledge and agree that, were you to breach the
provisions of this Agreement, the harm to the Company would be irreparable. You
therefore agree that in the event of such a breach or threatened breach the
Company shall, in addition to any other remedies available to it, have the right
to obtain preliminary and permanent injunctive relief against any such breach
without having to post bond. You further agree that, in addition to any other
relief awarded to the Company as a result of your breach of any of the
provisions of this Agreement, the Company shall be entitled to recover all
payments made to you or on your behalf hereunder.
7.2 You hereby agree that in the event any provision of this Agreement
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too long a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.
8. Definitions. Words or phrases which are initially capitalized or within
quotation marks shall have the meanings provided in this Section 8 and as
provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
8.1 "Cause" shall mean (i) the commission of fraud, embezzlement, theft or
other dishonesty in the performance of your duties for, or responsibilities to,
the Company and (ii) willful, or repeated and negligent, failure to adequately
perform your duties for, or responsibilities to, the Company after reasonable
notice from the Board setting forth in reasonable detail the nature of such
failure and you shall not have remedied such failure within ten (10) days of
receiving such notice. Any act, or failure to act, based on authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Chief Executive Officer or based on the advice of counsel of the Company
shall be
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conclusively presumed to be done, or omitted to be done, by you in good faith
and in the best interest of the Company.
8.2. "Change of Control" shall be deemed to take place if hereafter (i) any
Person (other than any Person which is a holder of the Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock or Series C Convertible
Preferred Stock on the date hereof) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Act) of securities of the Company representing more than
50% of the combined voting power of the Company's then-outstanding securities,
(ii) the Company is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the
Board in office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter, or (iii) individuals who, at the date
hereof, constitute the Board (the "Continuing Directors") cease for any reason
to constitute a majority thereof, provided, however, that any director who is
not in office at the date hereof but whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the date hereof or whose election or nomination for election was
previously so approved shall be deemed to be a Continuing Director for purposes
of this Agreement. Notwithstanding the foregoing provisions of this paragraph, a
"Change of Control" will not be deemed to have occurred solely because of (i)
the acquisition of securities of the Company (or any reporting requirement under
the Act relating thereto) by an employment benefit plan maintained by the
Company for its employees or (ii) the occurrence of leveraged buy-out or
recapitalization of the Company in which Executive participates as an equity
investor.
8.3 "Confidential Information" means any and all information of the
Company, its subsidiaries and affiliates that is not generally known by
others with whom they compete or do business, or with whom they plan to
compete or do business and any and all information, publicly known in whole
or in part or not, which, if disclosed by the Company or any of its
subsidiaries or affiliates, would assist in competition against any of
them. Confidential Information includes without limitation such information
relating to (i) the financial performance and strategic plans of the
Company, its subsidiaries and affiliates, (ii) the identity and special
needs of their customers and the structure of any contractual relationship
with such customers and (iii) the people and organizations with whom they
have business relationships and those relationships. Confidential
Information also includes any and all information that the Company or any
of its subsidiaries or affiliates has received from others with any
understanding that it would not be disclosed.
8.4 "Good Reason" means any substantial diminution in your base salary or
position or nature or scope of responsibilities (other than by inadvertence) as
to which you have provided written notice to the Board within thirty (30) days
of the date on which you knew or reasonably should have known of such
diminution, which notice shall set forth in reasonable detail the nature of such
Good Reason and the Board shall not have remedied such diminution within ten
(10) days of receiving such written notice.
8.5 "Person" means an individual, a corporation, an association, a
partnership, an estate, a trust or other entity or organization (including a
"group" as defined in Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended), other than the Company or any of its subsidiaries or
affiliates.
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9. Assignment. Neither the Company nor you may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this Agreement without your consent in
the event that the Company shall hereafter affect a reorganization, or
consolidate with, or merge into any Person or other entity or transfer all or
substantially all of its property or assets to any Person. This Agreement shall
inure to the benefit of and be binding upon the Company, its successors
(including without limitation any transferee of all or substantially all of its
assets) and permitted assigns and upon you, your executors, administrators,
heirs and permitted assigns.
In the event of any merger, consolidation, or sale of assets as
described above, nothing contained in this Agreement will detract from
or otherwise limit your right to participate or privilege of
participation in any stock option or purchase plan or any bonus,
profit sharing, pension, group insurance, hospitalization, or other
incentive or benefit plan or arrangement which may be or become
applicable to executives of the corporation resulting from such merger
or consolidation or the corporation acquiring such assets of the
Company.
In the event of any merger, consolidation or sale of assets as described
above, references to the Company in this Agreement, shall unless the context
suggests otherwise, be deemed to include the entity resulting from such merger
or consolidation or the acquirer of such assets of the Company.
All payments required to be made, or other benefits required to be
provided, by the Company hereunder to you or your dependents, beneficiaries, or
estate will be subject to the withholding of such amounts relating to tax and/or
other payroll deductions as may be required by law.
10. Notices. Any and all notices, requests, demands, acceptances, appointments
and other communications provided for by this Agreement shall be in writing
(including telex, telecopy or similar tele-transmission) and shall be effective
when actually delivered in person or, if mailed, five (5) days after having been
deposited in the United States mail, postage prepaid, registered or certified
and addressed to you at your last known address on the books of the Company or,
in the case of the Company, addressed to its principal place of business,
attention of Chief Executive Officer, or to such other address as either party
may specify by notice to the other.
11. Miscellaneous. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement. This Agreement may not be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by you and such officer as may be specifically designated by the
Board. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of The Commonwealth of Massachusetts.
This Agreement may be executed in two or more counterparts, each of which shall
be an original and all of which together constitute one and the same instrument.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions
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of this Agreement shall nevertheless remain in full force and effect so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
If you are in agreement with the foregoing, please so indicate
by signing and returning to me the original of this Agreement, whereupon
this Agreement shall constitute a binding agreement between you and the
Company.
The second copy is for your records.
Very truly yours,
BRIGHT HORIZONS FAMILY SOLUTIONS, INC.
/s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
ACCEPTED AND AGREED:
Signature: /s/ Xxxx Xxx Xxxxx
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Date: May 15, 2001
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