GLOBALOPTIONS GROUP, INC. New York, NY 10019
EXHIBIT
10.2
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Xxxxxxxxxxx Xxxxx 00xx Xxxxx
Xxx Xxxx,
XX 00000
August
13, 0000
Xxxxxx X.
Xxxxxxxx, Chairman & CEO
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Xxxxxxxxxxx Xxxxx
00xx
Xxxxx
Xxx Xxxx,
XX 00000
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Re:
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Your
Employment Agreement dated January 29, 2004, Assignment dated June 2005,
and amendment December 19, 2006 (the “December 19, 2006 Amendment”)
(collectively the “Agreement” capitalized terms used herein without
definition have the meanings specified in the
Agreement)
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Dear
Xxxxxx:
This
letter is to modify and clarify the Agreement, effective as of the date written
above. Accordingly, the following modifications and clarifications
are made to the Agreement:
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1.
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The
parties hereby acknowledge that the current term of your employment was
extended to January 31, 2011 by the operative provisions contained in
Section 1 of the Agreement, subject to earlier termination or automatic
extension as contemplated therein. In addition, the first
sentence of Section 1 is amended to read as follows: “The
Company hereby agrees to continue to employ the Employee as its Chairman
and Chief Executive Officer and the Employee hereby accepts such continued
employment with the Company, upon the terms set forth in this
Agreement.”
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2.
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Section
2 shall be continued as in the previous year by
modifying Section 2 as
follows:
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Salary. Effective
as of February 1, 2009 and for the remaining term (including any extensions
thereto) of the Agreement, the Company shall pay the Employee a base salary per
annum of $425,000 (as it may be increased (but not decreased) in the discretion
of the Compensation Committee, “Base Salary”) and all executive officer
benefits.
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3.
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The
bonus program described in Section 3 shall continue consistent with past
practice and is amended and restated as
follows:
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Annual
Bonus. Starting January 1, 2007, the Employee shall be
eligible for a performance bonus payable 50% in cash and 50% in vested
restricted stock established from the 2007-2009 Annual Incentive Plan (or in
future years, based upon a substantially similar plan), based upon the mutually
agreed to goals between you and the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”). The performance bonus
and payment for 2007 – 2010 shall be based upon achieving certain goals as set
forth in Exhibit 1 to the December 19, 2006 Amendment (as modified by the
Compensation Committee pursuant to its meeting on April 8, 2008, Exhibit A)
(“December 19, 2006 Amendment”) and for purposes of calendar years 2009 and
2010, those goals, including the Targeted Performance Bonus-Annual, set forth
for year 2008 in Exhibit 1 shall be applied for said years 2009 and
2010. Bonuses shall be paid no later than March 15th of the year
following the year to which the bonus relates.
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4.
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Section
3.B. of the Agreement shall be continued as in previous years by adding
the following sentences to the end of Section
3.B.:
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The
performance vesting under the 2007 – 2009 Annual Incentive Plan shall also apply
to the calendar years 2009 and 2010, and the performance goals shall be
identical as set forth in Exhibit 1 to the December 19, 2006 Amendment. In the
event additional shares of Restricted Stock are required to be issued by the
Company to the Employee to meet the payment requirements herein, the Company
shall immediately cause such issuance. Provided, however, no additional shares
of Restricted Stock will be issued by the Company, if such shares are required
under Sections 8 and/or 10B of this Agreement, and in such event the Company
will be required to provide an equivalent payment to you for each share not
issued, in the amount equal to $2.00 per share.
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5.
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Section
8A shall be modified and restated as
follows:
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A.
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The
Company may terminate your employment without Cause or you may terminate
your employment hereunder for Good Reason, effective upon the giving of
written notice thereof and in the event you are terminating your
employment for Good Reason, providing the Company 30 days to cure such
Good Reason (if susceptible to cure), in either event you shall be
entitled to the following:
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6.
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Section
8A.(i) shall be clarified and restated as
follows:
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(i)
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Base
Salary (at your highest annualized rate of salary in effect during the
one-year period ending on the effective date of termination) through the
last date of the term (as such term exists on the date of such
termination) of this Agreement, payable in a lump sum within ninety (90)
days of your termination, subject to Section
34.
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7.
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Section
8A.(ii) shall be clarified and restated as
follows:
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(ii)
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a
bonus, under the terms of your annual bonus plan, on a pro rata basis for
the year in which such termination occurs; such pro rata bonus to be the
bonus for such year as determined as if the “Targeted Performance Bonus
Annual,” set forth in Exhibit 1 to the December 19, 2006 Amendment but
limited to the Targeted Performance Bonus-Annual ($500,000 cash per year
and 250,000 shares per year) were deemed to be met as set forth
in Exhibit 1 to the December 19, 2006 Amendment and as provided under
Section 3 hereof, multiplied by a fraction, the numerator of which is the
number of days from the beginning of the applicable year to the date of
termination of employment and the denominator of which is 365. The bonus
shall be paid not later than ninety (90) days following the end of the
year in which the termination occurred, subject to Section
34. Additionally, you shall receive one hundred (100%) of your
bonus as determined above in this Section 8A(ii) ($500,000 cash per year
and 250,000 shares per year), for the remaining term (as such
term exists on the date of such termination) under this agreement, to be
paid not later than ninety (90) days following the date of
termination subject to Section 34. All payments provided in
this Section 8A.(ii) shall be subject to and limited by the provisions of
Section 10B below and to the bonus to be paid under the severance package
described in this Section 8A and upon a Change of Control in Section 10B
shall not be treated as separate payments but as the same payment and you
shall only be paid such amount once. Accordingly, if there is a
Change of Control and the Company is required to make payments under
Section 10.B of this Agreement, this Section 8A(ii) shall not be operative
except to the extent that the payments described in this Section 8A(ii)
are not duplicative (e.g., the severance package described
above).
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8.
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Section
8 A(v) shall be modified and restated as
follows:
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(v)
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other
benefits (including medical and dental plan) in accordance with the
applicable plan and programs of the Company shall continue for the
remaining term (as such term exists on the date of such termination) under
this Agreement; provided, that if the terms of any of the plans do not
permit such continued participation, the Company shall provide you with a
comparable benefit in a time and manner consistent with
Section 34.
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9.
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A
new Section 8A(vi) shall be added to read as
follows:
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“Notwithstanding
the terms of the applicable agreement and plan, all shares of restricted stock
or restricted stock units (or other forms of equity compensation, if any) shall
be deemed fully vested on the date of termination”
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10.
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Section
8B(iii) shall be modified by deleting the words “after being given a
reasonable opportunity to cure such
failure.”
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11.
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Section
8(B)(iv) is amended by deleting “the Company fails to renew your
employment agreement at the end of the Term” and substituting therefore
“Intentionally Omitted.”
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12.
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Section
8B(x) shall be modified by deleting “not offered the same position in the
Company.”
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13.
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Section
10A(i) shall be modified by adding the words “within a 12 month period”
after “substantially all of the assets of the
Company”.
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14.
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Section
10A(ii) shall be modified and restated as
follows:
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“(ii)
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a
corporate dissolution taxed under Code Section 331 or with approval of a
bankruptcy court pursuant to 11 USC
§ 503(b)(ii)(A).
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15.
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Section
10A(iii) shall be modified by the addition of the words “The occurrence
within a 12 month period” at the beginning
thereof.
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16.
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Section
10.B. shall be clarified and restated by the following two
paragraphs:
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Notwithstanding
anything to the contrary in this Agreement or in any other applicable plan, but
subject to the following sentences, upon a Change of Control of the Company, all
stock options, restricted stock and restricted stock units shall vest
immediately upon such Change of Control and all performance conditions of any
and all cash bonuses and performance stock options or Restricted Stock shall be
deemed to be met and the term to exercise any stock options will be equal to the
term of the stock option originally granted. Provided, however, the amount of
any cash bonuses or Restricted Stock triggered by the Change of Control shall be
limited to an amount equal to the “Targeted Performance
Bonus Annual,” set forth in Exhibit 1 attached to the December 19, 2006
Amendment ($500,000, per year and 250,000 shares, per year) for the year of the
Change of Control and each year thereafter remaining in the term (as such term
exists on the date of such Change of Control). The cash portion of
such bonuses shall be paid within the time provided in Section
3. Provided, further, no additional shares of Restricted Stock will
be issued that may be required to be issued beyond the existing unvested
previously issued Restricted Stock held by you (318,750 shares as of the date
hereof) to meet the requirements of this Section 10B, however, the Company shall
pay to you in lieu of said undistributed Restricted Stock, an amount equal to
$2.00 per share within the time provided in Section 3. See attached
Schedule I for an illustration of payment required under this Section 10B of the
Agreement.
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On the
date of the Change of Control, the Company shall place immediately negotiable
funds into a “rabbi” trust in an amount equal to the cash payments that may be
due (or will be due) to you as a result of the Change of Control or as a result
of a termination of your employment following a Change of Control without Cause
or for Good Reason, including such additional amount as equals the gross up
payment (described in Section 24). Such trust shall be maintained pursuant to a
standard rabbi trust arrangement among the Company, you and an independent
trustee (reasonably acceptable to you) providing for the timely payment to you
of the amounts held in such trust in the event you become entitled thereto under
the applicable provisions of this Agreement (the "Trust Arrangement"). The Trust
Arrangement shall be maintained until the earlier of (A) the payment to you of
all sums held in the trust or (B) six years after the end of the fiscal year in
which the Change of Control occurred. This provision is subject
to the limitations imposed by Section 409A(b) of the Code. In
addition, this provision will be null and void if the establishment or
maintenance of such a trust would result in the imposition of a tax or penalty
under Section 409A.
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17.
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Section
10C is amended by deleting the words “prior to” and substituting therefor
the word “at” and by deleting the word “payable” and substituting therefor
the word “paid”. In addition, the following is inserted at the
end of such Section 10C: “For purposes of determining the
amount of the gross up payment, Employee will be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the gross up payment is to be made and state
and local income taxes at the highest marginal rates of taxation in the
state and locality where taxes thereon are lawfully
due.”
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18.
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A
new Section 11 is inserted to read as follows and the prior Section 11
shall become Section 12 with the remaining Sections in the Agreement
renumbered accordingly:
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Section
11. Nonrenewal by the
Company. In the event that the Company provides a notice of
nonrenewal pursuant to Section 1, you may resign and receive the following
payments at the times specified below, subject to Section 34:
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(i)
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Base
Salary (at your highest annualized rate of salary in effect during the
one-year period ending on the effective date of termination) through the
last date of the term (as such term exists on the date of such
termination) of this Agreement, payable in a lump sum within ninety (90)
days of your termination, subject to Section
34.
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(ii)
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the
stock portion of your bonus, under the terms of your annual bonus plan, on
a pro rata basis for the year in which such termination occurs; such pro
rata bonus to be the bonus for such year as determined as if the “Targeted
Performance Bonus Annual,” set forth in Exhibit 1 to the December 19, 2006
Amendment but limited to the Targeted Performance Bonus-Annual (250,000
shares per year) were deemed to be met as set forth in Exhibit
1 to the December 19, 2006 Amendment and as provided under Section 3
hereof, multiplied by a fraction, the numerator of which is the number of
days from the beginning of the applicable year to the date of termination
of employment and the denominator of which is 365. The bonus shall be paid
not later than ninety (90) days following the end of the year in which the
termination occurred, subject to Section 34. Additionally, you
shall receive one hundred (100%) of the stock portion of your bonus as
determined above in this Section 11 (250,000 shares per year, but limited
to the previously issued restricted stock outstanding as of the time of
such termination) for the remaining term (as such term exists on the date
of such termination) under this agreement, to be paid not later than
ninety (90) days following the date of termination subject to
Section 34. All payments provided in this Section 11 shall be
subject to and limited by the provisions of Section 10B above and the
bonus to be paid under the severance package described in this Section 11
and upon a Change of Control in Section 10B shall not be treated as
separate payments but as the same payment and you shall only be paid such
amount once. Accordingly, if there is a Change of Control and
the Company is required to make payments under Section 10.B of this
Agreement, this Section 11 shall not be operative except to the extent
that the payments described in this Section 11 are not duplicative (e.g.,
the severance package described
above).
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(iii)
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notwithstanding
the terms of the applicable agreement and plan, all shares of restricted
stock or restricted stock units (or other forms of equity compensation, if
any) shall be deemed fully vested on the date of
termination.
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19.
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Section 15
shall be modified by adding the following sentence at the conclusion
thereof:
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Notwithstanding
the foregoing, in consideration of the payments described in Section 8A(ii)
and 10B, the noncompetition period shall be extended from one (1) year to two
(2) years in the event of a Change of Control and you receive the payments and
benefits described in Section 10B or the termination of your employment by the
Company without Cause or by you for Good Reason.
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20.
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Section
18 shall be modified and restated as
follows:
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Professional
Fees. The Company agrees to pay in one lump sum your personal
accounting and legal fees relating to the review of this Agreement, and upon the
execution of the Letter Amendment dated August --, 2009 up to a maximum of
$20,000 on an after tax basis.
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21.
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A
new Section 34 shall be added to read as
follows:
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The
parties hereto intend that all benefits and payments to be made to you hereunder
will be provided or paid to you in compliance with all applicable provisions, or
an exemption or exception from the applicable provisions, or an exemption or
exception from the applicable provisions of, Section 409A of the Internal
Revenue Code of 1986 as amended (“Code”) and the regulations issued thereunder,
and the rulings, notices and other guidance issued by the Internal Revenue
Service interpreting the same, and this Agreement shall be construed and
administered in accordance with such intent. The parties also agree that this
Agreement may be modified, as reasonably requested by either party, to the
extent necessary to comply with all applicable requirements of, and to avoid the
imposition of any additional tax, interest and penalties under, the Section 409A
of the Code in connection with, the benefits and payments to be provided or paid
to you hereunder. Any such modification shall maintain the original intent and
benefit to the Company and you of the applicable provision of this Agreement, to
the maximum extent possible without violating Section 409A of the
Code.
All
payments to be made upon a termination of employment under this Agreement may
only be made upon a “a separation from service” as defined under Section 409A of
the Code. For purposes of section 409A of the Code, the right to receive a
series of installment payments under this Agreement shall be treated as a right
to a series of separate payments. Further, for purposes of the limitations on
nonqualified deferred compensation under section 409A of the Code, each payment
of compensation under this Agreement shall be treated as a separate payment. In
no event may you, directly or indirectly, designate the calendar year of a
payment.
Severance
benefits under this Agreement are intended to be exempt from Section 409A of the
Code under the “separation pay exception,” to the maximum extent applicable. Any
payments hereunder that qualify for the “short-term deferral” exception or
another exception under section 409A of the Code shall be paid under the
applicable exception to the extent applicable.
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Notwithstanding
the foregoing or anything to the contrary contained in a provision of this
Agreement, if it is reasonably determined that you are a “specified employee” at
the time of your “separation from service” within the meaning of Section 409A of
the Code, then, to the extent required by Section 409A, any payment hereunder
designated as being subject to this Section shall not be made until the first
business day after the expiration of six (6) months from the date of your
separation service. On such date, there shall be paid to you in a single cash
lump sum, an amount equal to aggregate amount of the payments delayed pursuant
to the preceding sentence without interest thereon. Notwithstanding the
forgoing, if you die within such six (6) months period, then there shall be paid
to your estate within ninety (90) days of your death, an amount equal to the
aggregate amount of the payments delayed pursuant to the second preceding
sentence. In the event that it is reasonably determined that certain
payments are required to be delayed as described above, an amount equal to the
aggregate amount of such payments will be placed in a “rabbi” trust with the
trustee to be reasonably acceptable to you and pursuant to a standard “rabbi”
trust agreement reasonably acceptable to Employee. The costs of such
trust to be paid by the Company and the payments will be timely made from such
trust, provided that the payments will not be placed into a rabbi trust if it
would result in the imposition of additional taxes under Section 409A of the
Code. In addition, the establishment of such rabbi trust is subject
to the limitations imposed by Section 409A(b) of the Code.
The term
“specified employee” shall mean any individual who, at any time during the
twelve (12) month period ending on the identification date (as determined by the
Company or its delegate), is a specified employee under Section 409A of the
Code, as reasonably determined by the Company (or its delegate). The
determination of “specified employees,” including the number and identity of
persons considered “specific employees,” and identification date, shall be made
by the Company (or its delegate) in accordance with the provisions of Sections
416(i) (without respect to paragraph (5) thereof) and 409A of the
Code.
All
reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of section 409A of the Code, including, where
applicable, the requirement that (i) any reimbursement is for expenses incurred
during your lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement during a
calendar year, (iii) the reimbursement of an eligible expense will be made on or
before the last day of the taxable year following the year in which the expenses
is incurred, and (iv) the right to reimbursement is not subject to liquidation
or exchange for another benefit.
Except as
hereby amended, the Agreement and all of its terms and conditions shall remain
in full force and effect and are hereby confirmed and ratified. All references
to the Agreement shall be deemed references to the Agreement as amended and
clarified hereby. This amendment shall be governed and construed
under the laws of the District of Columbia.
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Please sign below to acknowledge your agreement to and acceptance of this amendment to the Agreement.
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Sincerely,
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/s/
Xxxx Xxxxxx
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Xxxx
Xxxxxx
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Chairman
– Compensation Committee
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/s/
Xxxxxx Xxxxxxxx
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Xxxxxx
Xxxxxxxx
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Date:
August 13, 2009
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