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EXHIBIT 10.6
SUPERIOR CONSULTANT HOLDINGS CORPORATION
Compensation Agreement
This Compensation Agreement is made as of January 5, 1998, between Xxxxxxx X.
Xxxxxxx, Xx., (the "Executive", "Employee") and Superior Consultant Holdings
Corporation, a Delaware Corporation ("Superior", "the company").
The parties agree as follows:
1. In full consideration for the services to be provided by Executive during
his employment by the Company, Executive shall receive compensation
consisting of salary, employee benefits, and bonus, if any, as described
below. All salary, benefits, bonus, if any, and reimbursement shall cease
as of the date of any termination of employment except as may otherwise
be expressly provided herein.
SALARY: The bi-weekly salary will be $12,500 (prorated for partial
periods), subject to any payroll or other deductions as may be required
to be made pursuant to law, government order, or by written agreement
with or consent of the Executive.
BONUS: For each year of Executive's employment with the Company, he shall
be eligible to participate in a performance bonus plan in an amount not
less than $150,000. The terms and conditions shall be as defined in any
such bonus plan.
BENEFITS: The company may offer benefits from time to time to its
employees. Eligibility to receive such benefits will be subject to
eligibility rules as defined by the plan. Insurance coverages shall
commence in accordance with the eligibility rules, company policy and the
requirement of the insurance carrier. The company reserves the right to
change or revoke any policies or benefits at any time.
2. EMPLOYMENT SEPARATION: In the event that Executive's employment is
terminated by the Company for any reason other than gross misconduct,
embezzlement, or attempted embezzlement, of money or property of the
Company or a subsidiary or an affiliate, the Employee's perpetration or
attempted perpetration of fraud on the Company or a subsidiary or an
affiliate, the Employee's participation in a fraud or attempted fraud on
the Company, the employee shall be entitled to receive all compensation
earned and all benefits vested (under applicable plans) and
reimbursements due (pursuant to Company expense policies) through the
effective date of termination and employee shall be entitled to
Separation Payments as defined below in Section 3.
3. SEPARATION PAYMENTS: In the event that Employee's employment is
terminated by the Company for any reason other than gross misconduct,
embezzlement, or attempted embezzlement, of money or property of the
Company or a subsidiary or an affiliate, the Employee's perpetration or
attempted perpetration of fraud on the Company or a subsidiary or an
affiliate, the Employee's participation in a fraud or attempted fraud on
the Company, Separation Payments shall be made by the Company to Employee
as follows:
(a) SALARY CONTINUATION. The Employee's salary, as defined in Section 1,
above, shall continue as if the Employee was still employed by the
Company for a period of two years from date of termination.
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SUPERIOR CONSULTANT HOLDINGS CORPORATION
Compensation Agreement
(b) BONUS. For and with respect to the year of termination, the Company
shall pay the Employee bonus earned up through and including the
date of termination under any and all bonus plans for which he was
eligible. In the event of termination and absent specific written
bonus plan provisions to the contrary, bonus earned shall be
determined as a prorata share (based on the number of days employed
during the calendar year) of total bonus opportunity.
(c) STOCK OPTIONS. Stock options granted up to the date of termination
shall vest immediately upon termination, provided that the right to
exercise such vested options shall be at Executive's discretion but
in no event later than the expiration schedule as set forth in the
stock option grant document awarded to employee. However, no new
stock options will be granted after the date of termination, whether
the termination is due to Change of Control or any other reason.
4. CHANGE IN CONTROL:
(a) ACKNOWLEDGMENT. Unless he elects to terminate his employment, the
Employee understands and acknowledges that the Company may be merged
or consolidated with or into another entity and that such entity
shall automatically succeed to the rights and obligations of the
Company hereunder.
(b) NO NOTICE. In any Change in Control situation in which the Employee
has not received written notice at least fifteen (15) business days
prior to the anticipated closing date of the transaction giving rise
to the Change in Control that such successor is willing, as of the
closing, to assume and agree to perform the Company's obligations
under this Agreement, then such Change in Control shall be deemed to
be a termination of employment by the Company and the provisions of
Section 3 will apply; provided, however, that under such
circumstances, (i) in lieu of the Salary Continuation and Bonus, the
Company shall pay the Employee the Change in Control Payment (as
that term in hereafter defined), in one lump sum on or before the
closing of the transaction giving rise to the Change in Control.
(c) NOTICE RECEIVED. In any change in Control situation in which the
Employee has received written notice from the successor to the
Company that such successor is willing to assume the Company's
obligations hereunder, the Employee may nonetheless, at his sole
discretion, elect to terminate employment by providing written
notice to the Company at least five (5) business days prior to the
anticipated closing of the transaction giving rise to the Change in
Control. In such case, the provisions of Section 3 will apply as
though the Company had terminated Employee's employment; provided,
however, that under such circumstances, (i) in lieu of the Salary
Continuation and Bonus, the Company shall pay the Employee the
Change in Control Payment, in one lump sum on or before the closing
of the transaction giving rise to the Change in Control.
(d) DATE OF TERMINATION. For purposes of applying subparagraphs (a) and
(b) above, the effective date of termination will be the closing
date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due the Employee
must be paid in full by the Company at or prior to such closing.
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SUPERIOR CONSULTANT HOLDINGS CORPORATION
Compensation Agreement
(e) "CHANGE IN CONTROL" DEFINED. A "Change in Control" shall be deemed
to have occurred if:
(i) any person other than the Company or any employee benefit plan
of the Company, acquires directly or indirectly the Beneficial
Ownership (as described in Section 13(d) of the Securities Exchange
Act of 1934, as amended) of any voting security of the Company and
immediately after such acquisition such Person is, directly or
indirectly, the Beneficial Owner of voting securities representing
50% or more of the total voting power of all of the then-outstanding
voting securities of the Company;
(ii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or
consummation of any such transaction if stockholder approval is not
sought or obtained, other than any such transaction which would
result in at least 75% of the total voting power represented by the
voting securities of the surviving entity outstanding immediately
after such transaction being Beneficially Owned by at least 75% of
the holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each
continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iii) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an Agreement for the sale or
disposition by the Company of all or substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the
Company.)
(f) NOTICE OF ANTICIPATED CHANGE IN CONTROL. The Employee shall be
notified in writing by the Company at any time that the Company or
any member of its Board anticipates that a Change in Control may
take place.
(g) TAXES, INTEREST OR PENALTIES.
(i) The Employee shall be reimbursed by the Company or its successor
for any exercise taxes and/or interest or penalties that the
Employee incurs under Section 4999 of the Internal Revenue Code of
1986, as amended (or any similar taxes, interest or penalties), as a
result of any Change in Control or the receipt of any amount paid or
payable hereunder. Such amount will be due and payable by the
Company or its successor within (10) days after the Employee
delivers a written request for reimbursement accompanied by a copy
of his tax returns) showing the excise tax actually incurred by the
Employee.
ii) Notwithstanding anything contained herein to the contrary, the
Employee shall have the right to refuse to accept amounts payable
under this Section 5 to the extent that such amounts would subject
the Employee to, or render the Employee liable for, any excise taxes
and/or interests or penalties under Section 4999 of the Internal
Revenue Code of 1986, as amended (or any similar taxes, interest or
penalties).
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SUPERIOR CONSULTANT HOLDINGS CORPORATION
Compensation Agreement
(h) CHANGE IN CONTROL PAYMENT. As used herein the term "Change in
Control Payment" means an amount equal to two (2) times the full
annual base salary in effect for the year of termination plus two
(2) times the full year's bonus opportunity in effect for the year
of termination.
SIGNATURES:
Acknowledged and accepted for Superior Consultant Holdings Corporation.
/s/ [SIG] Vice President & CAO 3/16/98
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NAME TITLE DATE
I hereby acknowledge that I have voluntarily entered into this Compensation
Agreement after having a full and adequate opportunity to review its provisions.
Acknowledged and accepted
/s/ [SIG] President 3/16/98
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NAME TITLE DATE
PROPRIETARY AND CONFIDENTIAL
