Exhibit 10.15
CORT Business Services Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
March 25, 1999
Xxxxxx X. Xxxxx
Dear Xx. Xxxxx:
In recognition of the importance and value to CORT Business Services
Corporation (the "Company") of your continued services, you and we agree as set
forth below.
1. Subject to the conditions set forth in Paragraph 3 below, if a
Change of Control occurs and your employment with the Company is terminated
within one year of such Change of Control:
a. The Company will pay or cause to be paid to you a bonus (the
"Bonus") equal to $400,000.00. The Bonus shall be payable to you
within three business days of your termination. All payments due to
you hereunder will be subject to all applicable employment and
withholding taxes.
b. In addition to the Bonus, you and your eligible family members
shall be entitled to a continuation of the welfare benefits of medical
insurance, dental insurance, and life insurance until the third
anniversary of your termination. These benefits shall be provided to
you at the same premium cost, and at the same coverage level, as in
effect as of your effective date of termination. However, in the event
the premium cost and/or level of coverage shall change for all
similarly situated executive employees of the Company, the cost and/or
coverage level, likewise, shall change for you in a corresponding
manner. The continuation of these welfare benefits shall be
discontinued prior to the end of such period in the event you have
available substantially similar benefits from a subsequent employer,
as determined by the Company's Board of Directors or the Board's
designee.
c. If any benefit or payment from the Company to you (whether
paid or payable or distributed or distributable pursuant to the terms
of this letter agreement or otherwise) (a "Payment") shall be
determined to be an "Excess Parachute Payment" as defined in section
280G(b)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), then the aggregate present value of amounts or benefits
payable to you pursuant to this letter agreement ("Agreement
Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present
value that maximizes the aggregate present value of Agreement Payments
without causing any payments or benefits hereunder to be an Excess
Parachute Payment. Anything to the contrary notwithstanding, if the
Reduced Amount is zero and it is determined further that any payment
from the Company to you that is not an Agreement Payment would
nevertheless be an Excess Parachute Payment, then the aggregate
present value of Payments that are not Agreement Payments shall also
be reduced (but not below zero) to an amount, if any, so that the
present value of such lesser amount maximizes the aggregate present
value of Payments to you on an after-tax basis, taking into account
income and excise taxes under section 1 and section 4999 of the Code.
For purposes of this Section 1, present value shall be determined in
accordance with section 280G(d)(4) of the Code.
2. As used herein, the following shall have the meanings set forth
below:
a. "Cause" shall mean the occurrence or existence of any of the
following with respect to you, as determined in good faith by the
Board of Directors of the Company:
(1) your conviction of a felony involving moral turpitude;
or
(2) your willful refusal, after notice and a thirty (30) day
opportunity to cure, to perform such services as may be
reasonably delegated or assigned to you, consistent with your
position, by the Board of Directors.
b. "Change of Control" means and shall be deemed to have occurred
upon:
(1) any person, other than the Company or a Related Party,
acquires directly or indirectly the beneficial ownership of any
voting security of the Company and immediately after such
acquisition such person has, directly or indirectly, the
beneficial ownership of voting securities representing 20% or
more of the total voting power of all the then-outstanding voting
securities of the Company, or
(2) those individuals who as of the date hereof constitute
the Board of Directors of the Company (the "Board") or who
thereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors as of the date hereof or whose election
or nomination for election was previously so approved, cease for
any reason to constitute a majority of the members of the Board;
or
(3) the consummation of a merger, consolidation,
recapitalization or reorganization of the Company, or an
acquisition of securities or assets by the Company (a
"Transaction"), other than a Transaction with Related Parties,
and other than a Transaction which would result in the holders of
voting securities having 100% of the total voting power
represented by the voting securities outstanding immediately
prior thereto continuing to hold voting securities of the Company
or voting securities of the surviving entity having at least a
majority of the total voting power represented by the voting
securities of the Company or the voting securities of such
surviving entity outstanding immediately after such Transaction;
or
(4) the consummation of a 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 other
than any such transaction which would result in Related Parties
owning or acquiring more than 50% of the assets owned by the
Company immediately prior to the transaction.
Notwithstanding the foregoing, no Change of Control shall be
deemed to have occurred for purposes of this letter agreement if you
are an equity participant with the acquiror in the transaction that
would otherwise result in a Change of Control.
c. "Good Reason" shall mean the occurrence or existence of any of
the following with respect to you:
(1) your base salary plus bonus at target is reduced from
that currently in effect, or your other employee benefits are in
the aggregate materially reduced from those currently in effect
(unless such reduction of employee benefits applies to employees
of the Company generally), or
(2) you are assigned duties that are otherwise materially
inconsistent with the duties currently performed by you;
provided, that (i) you notify the Company in writing of your
intention to terminate for either of the foregoing reasons
and (ii) the Company shall have not remedied such situation
within fifteen (15) days after receiving such written
notice.
d. "Related Party" means (A) a majority-owned subsidiary of the
Company; or (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any majority-owned
subsidiary of the Company; or (C) a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportion as their ownership of voting securities of the
Company; or (D) any executive officer or director of the Company or
any affiliate of any executive officer or director of the Company.
3. Payment of the Bonus and other benefits set forth in Paragraph 1 is
subject to the following conditions:
a. you shall not have breached any term of this letter agreement
in any material respect;
b. your employment with the Company shall not have been
terminated for Cause; and
c. you shall not have voluntarily terminated your employment with
the Company unless you have Good Reason.
4. Nothing in this letter agreement shall be construed as giving you
any right to remain in the employ of the Company and you hereby acknowledge
that you are and will remain an employee-at-will of the Company, terminable
with or without Cause.
5. This letter agreement shall terminate one year from the date hereof
if no Change of Control has occurred by such date.
6. This letter agreement may be amended or modified only by an
agreement in writing executed by you and the Company.
7. This letter agreement shall be construed and interpreted under the
laws of the State of Virginia. Because it is agreed that time will be of
the essence in determining whether any payments are due to you under this
letter agreement, any disputes arising hereunder shall be submitted to
binding arbitration in Fairfax, Virginia, or such other place as the
parties may agree. The parties agree that the arbitration award shall be
the sole and exclusive remedy between them regarding any and all claims
arising hereunder.
The arbitration shall be conducted pursuant to the commercial rules of
the American Arbitration Association, subject to the following provisions:
a. the arbitration hearing shall be held within seven days (or as
soon thereafter as possible) after the selection of the arbitrator, no
continuance of said hearing shall be allowed without the mutual
consent of the parties, absence from or nonparticipation at the
hearing by either party shall not prevent the issuance of an award,
hearing procedures which will expedite the hearing may be ordered at
the arbitrator's discretion, and the arbitrator may close the hearing
in his or her sole discretion when he or she decides he or she has
heard sufficient evidence to satisfy issuance of an award;
b. the arbitrator's award shall be rendered as expeditiously as
possible and the parties will request that the arbitrator render the
award no later than one week after the close of the hearing, the award
of the arbitrator shall be final and binding upon the parties, the
award may be enforced in any appropriate court as soon as possible
after its rendition and if an action is brought to confirm the award,
both parties agree that no appeal shall be taken by either party from
any decision rendered in such action; and
c. if you are the prevailing party as determined by the
arbitrator, in any such arbitration proceeding, you shall be awarded
reasonable costs and attorneys' fees.
8. This agreement shall inure to the benefit of your heirs, assigns,
and legal representatives. Additionally, this agreement shall be binding
upon the parties hereto, and their respective successors and assigns.
If the foregoing accurately sets forth our understanding with respect to
the subject matter set forth above, please sign below and return an executed
copy of this letter to Xxxxxxx Xxx Xxxxxxxx at the Company.
Very truly yours,
CORT BUSINESS SERVICES CORPORATION
By: ______________________________
Title:
Agreed and Accepted,
March ____, 1999
