EXHIBIT 10.1
CHANGE IN CONTROL AGREEMENT
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This Change in Control Agreement ("Agreement") is entered into as of the 9th day
of May, 2001, by and between [NAME], an individual ("Executive"), and
XxxXxxxx.xxx, Inc., a Florida corporation, having its principal place of
business at 0000 XX 00xx Xxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 ("Company").
RECITALS
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WHEREAS, Executive is a key employee of Company serving in the capacity of
[TITLE]; and
WHEREAS, the Company desires to provide certain protection to Executive in the
event of a change in control or potential change in control of the Company in
order to induce Executive to remain in the employ of the Company notwithstanding
the risks and uncertainties created by a potential change in control of the
Company.
AGREEMENT
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NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties agree as follows:
1. Term. The Term of this Agreement shall commence as of the date first set
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forth above and shall continue until the earlier of: (a) the date that Executive
ceases to be an employee of the company, for any reason; (b) the expiration date
of Executive's employment agreement with the Company if Executive has such a
written agreement with the Company on the date of this Agreement; or (c)
December 31, 2003 ("Expiration Date"); provided, however, any rights and
benefits accruing to Executive under Section 2 of this Agreement prior to or
upon the Termination Date shall survive termination of the Agreement and be
binding and fully enforceable against the Company and any Successor (as
described in Section 4).
2. Change in Control/Rights.
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(a) Rights Upon Change in Control. If, during the Term of this Agreement, the
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Executive's employment with the Company terminates within one (1) year after the
date on which a Change in Control of the Company occurs (the "Termination
Date"), either by the Company without Cause or by the Executive for Good Reason
then:
(i) the Company shall pay to the Executive all base salary, benefits,
expenses and bonuses that have accrued on a pro-rata basis under the terms
of the XxxXxxxx.xxx Annual Incentive Plan or its duly authorized successor
plan ("Bonus") but have not been paid as of the Termination Date; and
(ii) the Company shall continue to pay to the Executive his or her base
salary, bonuses and benefits that would have otherwise been payable to
Executive had he or she remained continuously employed by Company for the
longer of:
(ww) a period of one (1) year after the Termination Date; or
(xx) the balance of the term of Executive's then-existing written
employment agreement with Company, if Executive has such a
written agreement with Company on the date of a Change in
Control,
said base salary, pro-rata Bonus and benefits to be payable at the greater
of:
(yy) the same level of base salary, bonuses and benefits that the
Executive was receiving from the Company immediately prior to the
Termination Date; or
(zz) the amounts required to be paid pursuant to the written
employment agreement for the relevant time period, if Executive
has such a written agreement with Company on the date of a Change
in Control; and
(iii) the exercise term of any options to purchase shares of the common
stock of the Company held by the Executive which are outstanding as of the
Termination Date shall be extended for a period of the longer of:
(aa) one (1) year after the Termination Date; or
(bb) the balance of the term of Executive's then-existing written
employment agreement with Company, if Executive has such a
written agreement with Company on the date of a Change in
Control.
(The foregoing items (i), (ii), and (iii) are referred to collectively as the
"CIC Payments."). CIC Payments shall be paid at the same interval as payments
were made to Executive immediately prior to the Termination Date unless
Executive elects to receive all CIC Payments in the form of a lump sum, which
lump sum shall be payable either by the Company or the Company's successor (as
the case may be) within thirty (30) days after the Termination Date.
(b) Definitions. For purposes of this Agreement, the following terms shall
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have the meanings indicated:
(i) "Cause" shall have the same meaning as indicated in the
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Executive's then-existing employment agreement with the Company, or, if no
employment agreement exists, then "Cause" shall mean (1) repeated violations by
the Executive of the Executive's duties which are demonstrably willful and
deliberate on the Executive's part and which are not remedied in a reasonable
period of time after receipt of written notice from the Company to the
Executive; (2) an act or acts of personal dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the Executive at the
expense of the Company, (3) misappropriation of any funds or property of the
Company; (4) gross mismanagement of the assets of the Company; (5) being under
the habitual influence of alcohol or narcotics while on duty; or (6) the
conviction of the Executive of a felony crime.
(ii) "Good Reason" shall have the same meaning as indicated in the
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Executive's then-existing employment agreement with the Company, or, if no
employment agreement exists, then "Good Reason" shall mean:
(vv) the assignment to the Executive of duties inconsistent with
the Executive's position, authority, duties or responsibilities to the
Company, or any other action by the Company which results in a diminution
in such position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ww) any requirement of relocation outside a twenty-five (25)
mile radius from [CURRENT OFFICE LOCATION];
(xx) any reduction in compensation and/or failure by the Company
to pay or provide to the Executive his or her base salary, bonuses and/or
benefits other than an
isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof
given by the Executive; or
(yy) any failure by the Company to comply with and satisfy Section 4
of this Agreement.
In the case of clauses (vv) - (yy) above, the Executive may elect to immediately
terminate his or her employment and Company or Company's successor (as the case
may be), shall pay to the Executive the CIC Payments in the manner and for the
periods set forth in Section 2(a).
(iii) "Change in Control" shall be deemed to occur when, or upon:
(ww) Approval by the shareholders of the Company of a
reorganization, merger, consolidation or other form of corporate
transaction or series of transactions, in each case, with respect
to which persons who were the shareholders of the Company
immediately prior to such reorganization, merger or consolidation
or other transaction do not, immediately thereafter, own more
than 50% of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, in
substantially the same proportions as their ownership immediately
prior to such reorganization, merger, consolidation or other
transaction, or a liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company
(unless such reorganization, merger, consolidation or other
corporate transaction, liquidation, dissolution or sale is
subsequently abandoned); or
(xx) Individuals who, as of the date on which this Agreement is
executed, constitute the Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the
date on which this Agreement was executed, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of the Company) shall be, for purposes
of this Agreement, considered as though such person were a member
of the Incumbent Board;
(yy) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act, of beneficial ownership
(within the meaning of Rule 13-d promulgated under the Securities
Exchange Act, of 40% or more of either the then outstanding
shares of the Company's Common Stock or the combined voting power
of the Company's then outstanding voting securities entitled to
vote generally in the election of directors (hereinafter referred
to as the ownership of a "Controlling Interest") excluding, for
this purpose, any acquisitions by (1) a group whose primary
persons are members of the Rothschild family; (2) the Company or
its Subsidiaries, (3) any person, entity or "group" that as of
the date on which this Agreement is executed owns beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act) of a Controlling Interest or (4) any
employee benefit plan of the Company or its Subsidiaries; or
(zz) The date immediately prior to the date on which the
Executive's employment with the Company is terminated prior to
the date determined in paragraph 2(b)(iii)(ww), (xx) or (yy)
above, provided it is reasonably demonstrated that such
termination (1) was at the request of a third party who has taken
steps reasonably calculated to effect a Change in Control as
defined in
paragraph 2(b)(iii)(ww), (xx) or (yy) above or (2) otherwise
arose in connection with or anticipation of a Change in Control
as defined in paragraphs 2(b)(iii)(ww), (xx) or (yy) above.
3. Certain Reduction of Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive in the nature of compensation, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would be subject to excise tax because of
Section 280G of the Internal Revenue Code ("Code"), then at Executive's option
the aggregate present value of amounts payable or distributable to or for the
benefit of the Executive pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced
Amount" shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment to be
subject to excise tax because of Section 280G of the Code. Anything to the
contrary notwithstanding, if the Reduced Amount is zero and it is determined
further that any Payment which is not an Agreement Payment would nevertheless be
subject to excise tax because of Section 280G of the Code, then at Executive's
option the aggregate present value of Payments which are not Agreement Payments
shall also be reduced (but not below zero) to an amount expressed in present
value which maximizes the aggregate present value of Payments without causing
any Payment to be subject to excise tax because of Section 280G of the Code. For
purposes of this Section 3, present value shall be determined in accordance with
Section 280G(d)(4) of the Code.
(b) All determinations required to be made under this Section 3 shall
be made by Deloitte & Touche, LLP or, at the Executive's option, any other
nationally or regionally recognized firm of independent public accountants
selected by the Executive and approved by the Company, which approval shall not
be unreasonably withheld or delayed (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Company and the Executive within
fifteen (15) business days of the date of termination of the Executive's
employment or such earlier time as is requested by the Company and an opinion to
the Executive that he has substantial authority not to report any excise tax on
his Federal income tax return with respect to any Payments. Any such
determination by the Accounting Firm shall be binding upon the Company and the
Executive. The Executive shall determine which and how much of the Payments
shall be eliminated or reduced consistent with the requirements of this Section
3, provided that, if the Executive does not make such determination within ten
business days of the receipt of the calculations made by the Accounting Firm,
the Company shall elect which and how much of the Payments shall be eliminated
or reduced consistent with the requirements of this Section 3 and shall notify
the Executive promptly of such election. Within five business days thereafter,
the Company shall pay to or distribute to or for the benefit of the Executive
such amounts as are then due to the Executive under this Agreement. All fees and
expenses of the Accounting Firm incurred in connection with the determinations
contemplated by this Section 3 shall be borne by the Company.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Payments will have been made by the Company which
should not have been made ("Overpayment") or that additional Payments which will
not have been made by the Company could have been made ("Underpayment"), in each
case, consistent with the calculations required to be made hereunder. In the
event that the Accounting Firm, based upon the assertion of a deficiency by the
Internal Revenue Service against the Executive which the Accounting Firm
believes has a high probability of success, determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Company to or for the
benefit of the Executive shall be treated for all purposes as a loan ab initio
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to the Executive which the Executive shall repay to the Company within one (1)
year together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount shall be payable by the Executive to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which the Executive is subject to tax under Section 1 and
Section 4999 of the Code or generate a refund of such taxes. In the event that
the Accounting Firm, based upon controlling precedent or other substantial
authority, determines that an Underpayment has occurred, any such Underpayment
shall be promptly paid by the Company to or for the benefit of the Executive
together with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.
4. Successors. The Company shall cause any successor(s) to the Company
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(whether direct or indirect, and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to assume the obligations of the
Company under this Agreement and shall cause such successor(s) to perform the
Company's obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession.
5. Withholding. The Company may withhold from any amounts payable under this
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Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
6. Amendment of Employment Agreement. If on the date of this Agreement
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Executive has a written employment agreement with the Company, this Agreement
shall be construed as an amendment thereof. If such employment agreement
contains express provisions concerning "Change in Control", this Agreement shall
be deemed to supercede and replace all such provisions.
7. Miscellaneous. This Agreement shall not be amended or modified except by a
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writing signed by both parties. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without reference
to principles of conflicts of laws. All notices hereunder shall be in writing
and shall be deemed given upon personal delivery or when sent by certified mail,
postage prepaid, return receipt requested, at the address first set forth above.
A party may change such address for notice upon written notice given in
accordance with the provisions hereof. If any provision of this Agreement is
determined by an arbitrator or court of competent jurisdiction to be
unenforceable, such provision shall be automatically reformed and construed so
as to be valid, operative and enforceable to the maximum extent permitted by law
or equity while preserving its original intent. The invalidity of any part of
this Agreement shall not render invalid the remainder of this Agreement. The
Executive's failure to insist upon strict compliance with any provision hereof
shall not be deemed to be a waiver of such provision or any other provision
thereof. Each party to this Agreement represents, agrees, and warrants that it
will perform all other acts and execute and deliver all other documents that may
be reasonably necessary or appropriate to carry out the intent and purposes of
this Agreement. This Agreement constitutes the entire agreement between the
parties regarding the specific subject matter contained herein and supersedes
all prior and contemporaneous undertakings and agreements of the parties,
whether written or oral, except any provisions under an employment agreement
between the Executive and the Company that are not specifically amended hereby,
but only with respect to the specific subject matter herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first set forth above.
XXXXXXXX.XXX, INC. EXECUTIVE
By: By:
Name: Name:
Title:
[SIGNATURE PAGE TO CHANGE IN CONTROL AGREEMENT]
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Note: This form of agreement was entered into with the following executive
officers:
Xxxxx Xxxxxxxxxx (Chairman),
Xxxx Xxxxxxx (CEO),
Xxxx Xxxx (COO),
Xxxxxxx Xxxxxxxx (CFO),
