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Exhibit 10(h)
July 15, 1999
Mr. X. Xxxxxx Copper
00 Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
RE: SEVERANCE BENEFIT IN THE EVENT OF TERMINATION OF YOUR
EMPLOYMENT WITH CITATION COMPUTER SYSTEMS, INC.
UNDER CERTAIN CIRCUMSTANCES FOLLOWING A CHANGE IN CONTROL
Dear Bob:
The purpose of this letter is to record an agreement under which you will
receive certain severance benefits in the event of the termination of your
employment by CITATION Computer Systems, Inc. under certain circumstances within
12 months following a Change in Control. By entering into this agreement with
you, CITATION Computer Systems, Inc. is endeavoring to xxxxxx and encourage your
continued employment and dedication to your assigned duties should certain
potentially disturbing changes occur.
IN CONSIDERATION OF YOUR CONTINUING SERVICE TO CITATION COMPUTER SYSTEMS, INC.
THE FOLLOWING PROVISIONS SHALL apply:
1. THE COMPANY. As used herein, the "COMPANY" means CITATION Computer
Systems, Inc., a Missouri corporation, any successors in interest, and
any affiliates. An "AFFILIATE" is any person other than a natural
person who, with respect to the Company, is an affiliate as defined in
Rule 405 promulgated under the Securities Act of 1933, as amended, or
under any successor rule.
2. CHANGE IN CONTROL. A "CHANGE IN CONTROL" of the Company shall be
deemed to have occurred if, after the date hereof: (I) any person
(other than the Company, or any company owned directly or indirectly
by the shareholders of the Company in substantially the same
proportion as their ownership of voting securities of the Company),
becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 50 percent or more of the combined voting
power of the Company's then outstanding voting securities; or (ii) the
shareholders of the Company approve a merger or consolidation of the
Company with any other company, other than (a) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting
securities
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of the surviving entity) more than 50 percent of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (b) a
merger or consolidation effected to implement a recapitalization of
the Company or similar transaction in which no person acquires more
than 50 percent of the combined voting power of the Company's then
outstanding voting securities; or (iii) the shareholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
As used herein, "PERSON" means a natural person, company, partnership,
limited liability company, limited partnership, trust, syndicate,
other entity, government, political subdivision, agency, or
instrumentality of a government.
As used herein, "BENEFICIAL OWNER" means any person who, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares:
(i) Voting power, which includes the power to vote or direct the
voting of, voting securities of the Company; and/or
(ii) Investment power, which includes the power to dispose or
direct the disposition of, voting securities of the Company.
All voting securities of the Company, regardless of the form which such
beneficial ownership takes, shall be aggregated in calculating a
person's beneficial ownership. Moreover, a person shall be deemed to be
the beneficial owner of voting securities of the Company if that person
has the right to acquire beneficial ownership (via the exercise of an
option, through conversion rights, or otherwise) of such voting
securities within 60 days after the date on which such person's
beneficial ownership of voting securities is being determined. Any
voting securities of the Company which are subject to such a right to
acquire beneficial ownership shall be deemed to be outstanding for the
purpose of computing the percentage of outstanding voting securities of
the Company of which such person in the beneficial owner.
As used herein "VOTING SECURITIES" means shares of stock or other
securities which entitle the holder to vote in the election of
directors of the Company.
It is specifically agreed that a Change in Control shall NOT
include any of the following:
(i) A public offering of voting securities of the Company; or
(ii) A sale of voting securities of the Company to a group of
investors which includes material direct or indirect
ownership by members of management of the Company at the
time of such purchase; or
(iii) Any acquisition of voting securities of the Company by an
employee benefit plan sponsored or maintained by the
Company.
3. INVOLUNTARY CHANGE OF CIRCUMSTANCES. As used herein, the term
"INVOLUNTARY CHANGE OF CIRCUMSTANCES", as it relates to your
employment by the Company means:
(a) The amount of cash compensation (regular, salary, bonus, and
commissions) that you have the reasonable (but not assured)
opportunity to earn during the next 12 months is reduced by
more than 10 percent from the level that existed immediately
preceding the Change in Control, unless you consent in
writing to such change; or
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(b) Without your consent you are required by the Company to
relocate your primary place of business to a location that
is greater than 50 miles from the Company's principal
executive offices.
Termination of your employment with the Company under any of the
following circumstances shall NOT constitute an Involuntary
Change of Circumstances after a Change in Control;
(a) Termination by reason of your death; or
(b) Termination as a result of your "LONG-TERM DISABILITY." You
will be determined to have a long-term Disability if you are
receiving, or are currently entitled to receive, benefits
under the Company's long-term disability insurance plan, if
any. If no such long-term disability insurance plan is in
effect, you will be deemed to have commenced a Long-term
Disability if: (I) you cannot perform the essential
functions of your employment position, with or without a
reasonable accommodation for your disability; or (ii) you
cannot perform the essential functions of your employment
position without an accommodation that would be an undue
hardship for the Company to provide. The foregoing
definition of Long-term Disability is not intended to and
shall not affect the definition of "disability" or any
similar or related term in any insurance policy the Company
may provide; or
(c) Termination for Cause, as defined below.
As used herein, the term "TERMINATION FOR CAUSE" means
termination of your employment with the Company at any age
because of:
(a) Failing to substantially perform your employment duties
(other than by reason of Long-term Disability); or
(b) Willfully engaging in conduct that the Company
determined does or will likely be materially damaging
or detrimental to the Company; or
(c) Acting with personal dishonesty or breaching your
fiduciary duty to the Company that in either case
results or was intended to result in personal profit to
you at the expense of the Company; or
(d) Willfully violating any law, rule, or regulation (other
than traffic violations, misdemeanors, or similar
offenses), which is or will likely be materially
damaging or detrimental to the Company; or
(e) Your conviction of, or your entry of a guilty plea to,
a felony or other crime involving moral turpitude.
For purposes of defining Termination for Cause, no act, or
failure to act, on your part shall be considered "WILLFUL" unless
done, or omitted to be done, by you not in good faith and without
reasonable belief that the act or omission was in the best
interest of the Company.
4. CONDITION PRECEDENT FOR SEVERANCE BENEFIT. If, within 12 months
following a Change in Control (I) your employment with the
Company is terminated by the Company without your express written
consent after or coincident with an Involuntary Change of
Circumstances or (ii) you voluntarily terminate your employment
with the Company after an Involuntary Change of Circumstances,
then in such event you shall become entitled to a Severance
Benefit as herein provided, subject to all of the terms and
conditions set forth herein.
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5. SEVERANCE BENEFIT. If the conditions precedent set forth above
occur, you shall be entitled to receive a Severance Benefit equal
to one times your Annual Compensation (as herein defined). You
may elect to receive this Severance Benefit in either (I) one
lump sum payment or (ii) in your choice of up to 12 equal monthly
installments (without interest).
As used herein, the term "ANNUAL COMPENSATION" means the average
of the total cash compensation received by you from the Company
and includable in your gross federal taxable income during each
of the one calendar year immediately preceding any termination of
your employment.
6. CONFIDENTIAL INFORMATION. Notwithstanding any other provision of
this agreement, in the event that, after termination of
employment with the Company, you divulge any trade secrets and/or
confidential information of the Company, you shall not be
entitled to any Severance Benefits pursuant to this agreement.
7. NOT AN EMPLOYMENT AGREEMENT. Neither anything contained in this
agreement nor any acts done pursuant hereto shall be construed as
entitling you to be continued in the employ of the Company for
any period of time or as obliging the Company to keep you in its
employ for any period of time.
8. GENERAL PROVISIONS. No provisions of this agreement may be
modified, waived, or discharged unless such waiver, modification,
or discharge is agreed to in writing signed by you and the
Company. No waiver by either party at any time of any breach by
the other party 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 to subsequent time. All
notices required or permitted hereunder shall be in writing. This
agreement shall be governed and construed by and in accordance
with the internal laws of the State of Missouri. 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. Headings of paragraphs are for convenience only
and shall not affect the interpretation of this agreement.
9. ARBITRATION. Any controversy or claim relating to this agreement,
or the breach thereof (including the question of whether any
particular matter is arbitrable hereunder) shall be settled by
arbitration in the St. Louis, Missouri metropolitan area in
accordance with the rules of the American Arbitration Association
then in force. The Company and you agree to abide by all awards
rendered by such arbitration proceedings, and all such awards may
be filed with and enforced by any court having proper
jurisdiction.
10. TERM. This agreement shall expire upon the later to occur of (I)
12 months following any Change in Control or (ii) 36 months after
the date of this letter; provided, however, that any such
expiration shall not affect your right to receive any Severance
Benefit to which you become entitled hereunder prior to such
expiration. It is understood that no rights under this agreement
shall arise with respect to any termination of your employment
prior to the occurrence of any Change in Control.
----------------------------------
You may make the foregoing agreement effective as respects you by executing a
copy of this letter where indicated below, thereby acknowledging your
understanding, acceptance of, and agreement to its terms and conditions, and
returning such signed copy to me within 10 days after the date of this letter.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
Sincerely,
CITATION Computer Systems, Inc.(R)
Xxxxxxx X. Xxxxx
President
ACCEPTANCE AND AGREEMENT
The terms and conditions of the foregoing agreement are understood, agreed to,
and accepted by me.
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X. Xxxxxx Xxxxxx
Date:
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