CHANGE OF CONTROL SEVERANCE
COMPENSATION AGREEMENT
This Change of Control Severance Compensation Agreement (the
"Agreement") by and between X. Xxxxx, Inc., a Massachusetts corporation together
with its subsidiaries and divisions (the "Company") with its principal place of
business at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx and Xxxxxxxxx X. Xxxxx of
00 Xxxxxxxx Xxxx, X. Xxxxxxx, XX 00000 (the "Executive") shall be effective as
of the 28th day of December, 1999 (the "Agreement").
In consideration of the agreements contained herein including the
undertakings of the parties hereto, the receipt and sufficiency of which are
hereby acknowledged by each of the parties hereto, it is covenanted and agreed
as follows:
1. Severance Compensation upon Termination of Employment.
------------------------------------------------------
(a) In the event the Executive's employment with the Company is terminated:
(i) within three (3) years after a Change in Control of the
Company occurring during the Term hereof (regardless of
whether such Executive's termination occurs after the
expiration of the Term) either (A) by the Company or (B) by
the Executive for "good reason", or
(ii) within three (3) years after the employment of Xxxx X.
Xxxxxxxxx with the Company has terminated during the Term
hereof (regardless of whether the Executive's termination
occurs after the expiration of the Term) for any reason
including, without limitation, dismissal, resignation,
retirement, death or termination for any other reason either
(A) by the Company (except if the termination of Executive is
for "cause") or (B) by the Executive for good reason,
then, in such event, the Company shall pay to the Executive an amount, in cash,
(the "Severance Payment") equal to the amount set forth below corresponding to
Executive's number of years of credited employment service:
Number of Years of Credited Service Severance Payment
---------------------------------------- -------------------------------
---------------------------------------- -------------------------------
0 to 9 1 year at Annual Base Salary
---------------------------------------- -------------------------------
---------------------------------------- -------------------------------
10 to 19 1.5 years at Annual Base Salary
---------------------------------------- -------------------------------
---------------------------------------- -------------------------------
20 and greater 2.0 years at Annual Base Salary
---------------------------------------- -------------------------------
For purposes of this Agreement "Annual Base Salary" shall mean the
Executive's base salary in effect on the date of this Agreement, as such base
salary may be increased from time to time. As of the date of this Agreement,
Executive had 16 years of credited employment service.
(b) In the event the Executive's employment is terminated as described
in Section 1(a)(i) above, the Severance Payment shall be made to the Executive
in a single lump sum cash payment. In the event the Executive's employment is
terminated as described in Section 1(a)(ii) above, the Severance Payment shall
be made to the Executive in accordance with the Company's regular pay intervals
for its senior executives beginning immediately following the Executive's
termination of employment with the Company.
(c) Notwithstanding the Executive's rights to receive the payments and
benefits pursuant to this agreement, the Executive shall not be deemed to have
waived any rights the Executive may have at law or equity with respect to the
termination of his employment.
(d) A termination for "good reason" shall be deemed to have occurred,
and the Executive shall be entitled to the benefits set forth in this Section 1,
if the Executive voluntarily terminates his employment after the occurrence of
any of the following events, if either the circumstances set forth in paragraphs
(a)(i) or (a)(ii) has occurred: (i) the assignment to the Executive of any
duties inconsistent with the highest position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities attained by
the Executive during the period of his employment by the Company; (ii) a
relocation of the Executive outside the metropolitan Boston area; or (iii) a
decrease in the Executive's compensation (including base salary, bonus or fringe
benefits). For purposes hereof, "Cause" shall mean (i) failure by the Employee
to cure a material breach of this Agreement within 15 days after written notice
thereof by the Company, (ii) the continuation after notice by the Company of
willful misconduct by the Employee in the performance of the Employee's duties
hereunder or (iii) the commission by the Employee of an act constituting a
felony; and "Change of Control of the Company" shall have the meaning set forth
in the Company's 1994 Equity Incentive Plan, as approved by the Stockholders of
the Company on June 7, 1994 (and without regard to any subsequent amendments
thereto).
2. Term.
-----
This Agreement shall become effective as of the date hereof, shall
continue for a period of three (3) years thereafter and shall renew
automatically for a period of one year on the anniversary of the effective date
unless either party gives notice to the other party in accordance with Section 6
hereof of its desire to terminate the agreement no less than 30 days prior to
the date the Agreement is due to expire (the initial three year term and any
extension thereof are herein referred to as the "Term").
3. Nonguarantee of Employment.
Nothing contained in this Agreement shall be construed as a contract of
employment between the Company and the Executive, or as a right of the Executive
to continue in the employ of the Company, or as a limitation of the right of the
Company to discharge the Executive with or without cause.
4. Successors.
-----------
(a) This Agreement shall be binding upon the Company, its successors
and assigns, and in the event of a Change of Control of the Company or in the
event the Company shall be merged or consolidated or otherwise combined into one
or more other corporations or other entities, or substantially all of its assets
are sold or otherwise transferred to one or more other corporations or entities,
this Agreement shall be binding upon the corporation or entity resulting from
such merger or consolidation or to which such assets shall be sold or
transferred and shall be assignable by it by way of transfer of assets, merger,
consolidation or combination to the same extent as if it were the Company.
Except as provided above in this Section 4(a), this Agreement shall not be
assignable by the Company or its successors and assigns. The Company will
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 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 no such succession or assignment had
taken place.
(b) This Agreement 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.
5. Assignment.
-----------
This Agreement shall not be assignable by the Executive and shall not
be subject to attachment, execution, pledge or hypothecation.
6. Notice.
-------
For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and either delivered in hand,
by nationally recognized overnight courier service or by mail by United States
registered or certified mail, return receipt requested, postage prepaid, and
shall be deemed to have been duly given the sooner of when actually received, on
the next business day following deposit with a nationally recognized overnight
courier service or three (3) days following deposit in the mail by United States
registered or certified mail, return receipt requested, postage prepaid, as
follows:
If to the Company:
X. Xxxxx, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
If to the Executive:
Xxxxxxxxx X. Xxxxx
00 Xxxxxxxx Xxxx
X. Xxxxxxx, XX 00000
or to 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.
7. Modification.
-------------
No provision 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 the Company. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such party shall be deemed a waiver of any other provisions hereof or of any
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, 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.
8. Validity.
---------
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement, which shall remain in full force and effect.
9. Governing Law.
--------------
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts without giving effect to the conflicts of law principles thereof.
10. Entire Agreement
This Agreement constitutes the entire understanding of the parties, and
revokes and supersedes all prior agreements between the parties and is intended
as a final expression of their Agreement. It shall not be modified or amended
except in writing signed by the parties hereto and specifically referring to
this Agreement. This Agreement shall take precedence over any other documents
that may be in conflict therewith.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
X. XXXXX, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------
Xxxx X. Xxxxxxxxx
President and
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxxx X. Xxxxx
