SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
EXECUTIVE SEVERANCE AGREEMENT
SECTION 1: RECITAL
THIS AGREEMENT ("Agreement") is made as of June 1, 2001 (the
"Effective Date") by and between SYSTEMS & COMPUTER TECHNOLOGY CORPORATION (the
"Company") and Xxxxxxx X. Xxxxxxxxxxx ("Executive").
SECTION 2: DEFINITIONS
The following terms, as used herein, shall have the meaning
specified:
"Cause" means Cause as defined in the Executive's employment
agreement with the Company or, in the absence of such a contract or definition,
(i) the willful and continued failure by the Executive to substantially perform
the Executive's duties with the Company (other than any such failure resulting
from the Executive's incapacity due to physical or mental illness or any such
actual or anticipated failure after the issuance of a notice of termination for
Good Reason by the Executive pursuant to an employment agreement providing for
such Good Reason termination) after a written demand for substantial performance
is delivered to the Executive by the Company, which demand specifically
identifies the manner in which the Company believes that the Executive has not
substantially performed the Executive's duties, or (ii) the willful engaging by
the Executive in conduct which is demonstrably and materially injurious to the
Company or its subsidiaries, monetarily or otherwise.
"Change in Control" means any of the following to occur:
(i) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial
Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3
promulgated under the 0000 Xxx) of fifty percent (50%) or more of the combined
voting power of the Company's then outstanding voting securities (the "Voting
Securities"); or
(ii) Approval by stockholders of the Company of (A) a
merger, reorganization or consolidation involving the Company if the
stockholders of the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding Voting Securities of the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) (1) a complete liquidation or dissolution of the Company
or (2) an agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) Acceptance by stockholders of the Company of shares
in a share exchange if the stockholders of the Company immediately before such
share exchange do not or will not own directly or indirectly immediately
following such share exchange more than fifty percent (50%) of the combined
voting power of the outstanding Voting Securities of the corporation resulting
from or surviving such share exchange in substantially the same proportion as
the ownership of the Voting Securities outstanding immediately before such share
exchange.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Systems & Computer Technology Corporation and
its successors and shall include any subsidiaries of the Company, except where
the context indicates otherwise.
"Employee" means an employee of the Company.
"Good Reason" means, the occurrence (without Executive's
express written consent) of any one of the following acts by the Company or any
successor, or failures by the Company or any successor to act unless, in the
case of any act or failure to act, such act or failure to act is corrected
without any detriment to Executive within five (5) business days after notice by
the Executive to the Company:
(i) the assignment by the Company to the Executive of any
duties inconsistent with the Executive's status as an executive of the Company
or a substantial adverse alteration in the nature or status of the Executive's
responsibilities;
(ii) a reduction by the Company in the Executive's
compensation or benefits (unless the benefits are changed in a consistent manner
for all employees of the Company) on the date hereof or as may be increased from
time to time;
(iii) the relocation by the Company of its principal
executive offices to a location more than thirty (30) miles from the location of
such office as of the date hereof or the Company's requiring Executive to be
based anywhere other than the Company's principal executive offices, except for
required travel on the Company's business to the extent substantially consistent
with the Executive's present obligations;
(iv) the failure by the Company to pay the Executive any
portion of the Executive's current compensation, or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date such
compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates which is material to the
Executive's total compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan,
or the failure by the Company to continue the Executive's participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants; or
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(vi) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those enjoyed by
the Executive under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which the Executive was
participating (unless the benefits are changed in a consistent manner for all
employees of the Company), the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive (unless the
benefits are changed in a consistent manner for all employees of the Company),
or the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy.
SECTION 3: EMPLOYMENT AND SEVERANCE
(a) Retention. Executive shall continue to serve in his
current capacity. This Agreement supercedes any other agreement between
Executive and the Company relating to severance or termination of employment
with the Company other than the Change in Control Agreement described in Section
3(d), which agreement continues in full force and effect in accordance with its
terms.
(b) Severance. If Executive's employment by the Company
terminates for any reason prior to a Change in Control, except as provided
below, the Company shall pay Executive the severance benefits set forth in
paragraph (c) of this Section 3; provided, however, that such severance benefits
shall not be payable if Executive's employment is terminated prior to a Change
in Control by reason of Executive's death, by the Company for Cause or by the
Executive other than for Good Reason.
(c) Severance Benefits. The severance benefits payable
hereunder shall be: (1) a cash amount equal to two times the Executive's annual
base salary as in effect on the date of termination of employment; (2)
continuation of all employer-provided insurance coverage (or benefits
self-insured by the Company, if any), subject to any insurance policy
limitations and the additional limitations described below, for two years
following the date of termination of employment; (3) all options to purchase
securities of the Company held by the Executive on the date of termination of
his employment shall immediately vest on such date and Executive may exercise
the options for two years following the date of termination of employment; and
(4) if applicable, an additional sum of cash which compensates Executive in full
for the imposition of any additional income tax and/or excise tax or penalty
under Section 4999 of the Internal Revenue Code ("Code") or otherwise imposed on
account of any payment hereunder being determined by the Company or the Internal
Revenue Service to be a parachute payment under Section 280G of the Code. The
Company has determined that it cannot (without adverse tax consequences under
applicable Code requirements) allow Executive to continue in its health benefit
plans at the Company's expense after termination. In lieu of such health plan
continuation (as otherwise provided in clause (2)), the Company shall provide
Executive: (i) during the first 18 months, an amount of taxable compensation
sufficient to reimburse the Executive for his cost of healthcare continuation
coverage under the Company's health plan pursuant to the COBRA continuation
requirements (set forth in Section 4980B of the Code); and (ii) during months
19-24 an amount sufficient to purchase an individual health insurance policy (as
made available on a guaranteed issue basis in Executive's state of residence).
With respect to the payments for months 19-24 as set forth in (ii) above, the
Company shall also pay to Executive an additional amount ("gross-up") which,
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after payment of all taxes in connection with such gross-up, results in
Executive's being in the same after-tax position as if such individual health
insurance coverage had been provided on a wholly tax-free basis. Executive shall
be required to take any necessary steps to elect COBRA continuation coverage and
apply for individual health insurance coverage at the end of the COBRA
continuation period. If either COBRA or individual health insurance coverage is
or becomes unavailable (e.g., because the Executive receives coverage from
another employer) the Company shall continue to make monthly payments to the
Executive equal to the monthly COBRA amount hereunder, which shall be taxable to
the Executive with respect to the payments for months 1-18 and which shall be
grossed-up to the Executive with respect to the payments for months 19-24. If
the Company subsequently determines that it can allow Executive to participate
in its health benefit plans without adverse tax consequences to either itself or
Executive, it may elect to do so in lieu of reimbursing Executive for COBRA
and/or individual health insurance coverage as set forth herein; provided
however that if the Company's determination is incorrect and Executive is
subject to adverse tax consequences as a result, then the Company shall make
such additional payments to Executive so that Executive is in the same after-tax
position as if such benefits had been provided on a wholly tax-free basis.
Except as otherwise set forth herein, the cash amounts due under this Section 3
shall be paid in a single sum immediately upon the termination of Executive's
employment.
(d) Credit Against Change in Control Agreement. Executive and
the Company have previously entered into a separate Severance Agreement dated as
of April 21, 1999 (the "Change in Control Agreement"), which shall continue in
full force and effect in accordance with its terms. Any amount paid under this
Section 3 (or the value of any benefit provided hereunder, as reasonably
determined by the Company) shall be a credit against any amount otherwise
payable by the Company under the Change in Control Agreement. Payments made
under any other agreement between Executive and the Company shall not be
credited against payments made hereunder unless such other agreement
specifically provides for such a credit.
(e) Release. The payment of any severance amounts under this
Section 3 shall be conditioned on the execution by the Executive of a
then-current release of all claims against the Company, in form and substance
reasonably satisfactory to the Company.
SECTION 4: ADMINISTRATION
(a) In General. The Company shall have full and complete
authority, in its sole and absolute discretion, (i) to exercise all of the
powers granted to it under this Agreement, (ii) to construe, interpret and
implement this Agreement and any related document, (iii) to prescribe, amend and
rescind rules relating to this Agreement, (iv) to make all determinations
necessary or advisable in administering this Agreement, and (v) to correct any
defect, supply any omission and reconcile any inconsistency in this Agreement.
(b) Appointment of Experts. The Company may appoint such
accountants, counsel, and other experts as it deems necessary or desirable in
connection with the administration of this Agreement.
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(c) Delegation. The Company may delegate to Employees the
authority to execute and deliver such instruments and documents, to do all such
acts and things, and to take all such other steps deemed necessary, advisable or
convenient for the effective administration of this Agreement in accordance with
its terms and purposes.
(d) Code Section 162(m). It is the intent of the Company that
this Agreement satisfy the applicable requirements of Code section 162(m) so
that the Company's tax deduction for remuneration in respect of this Agreement
for services performed by the Executive is not disallowed in whole or in part by
the operation of such Code section. If any provision of this Agreement would
otherwise frustrate or conflict with such intent, that provision to the extent
possible shall be interpreted and deemed amended so as to avoid such conflict,
but no such conflict shall serve to divest the Executive of any right otherwise
conferred by this Agreement.
SECTION 5: MISCELLANEOUS
(a) Nonassignability. No amount or right under this Agreement
will be assignable or transferable (including pursuant to a pledge or security
interest) other than by will or by laws of descent and distribution.
(b) Tax Withholding. Whenever payments are to be made
hereunder, the Company will withhold therefrom, or from any other amounts
payable to or in respect of the Executive, an amount sufficient to satisfy any
applicable governmental tax withholding requirements related thereto.
(c) Other Payments. Except as expressly set forth in section
3(d), nothing contained in this Agreement will be deemed in any way to limit or
restrict the Company from making any payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.
(d) Payments to Other Persons. If payments are legally
required to be made to any person other than the person to whom any amount is
payable under this Agreement, such payments will be made accordingly. Any such
payment will be a complete discharge of the liability of the Company under this
Agreement.
(e) No Right of Employment. Except as specifically set forth
herein, nothing in this Agreement will be construed as creating any contract of
employment or conferring upon the Executive or any other person any right to
continue in the employ or other service of the Company or limit in any way the
right of the Company to change such person's compensation or other benefits or
to terminate the employment or other service of such person with or without
Cause.
(f) Section Headings. The section headings contained herein
are for convenience only, and in the event of any conflict, the text of this
Agreement, rather than the section headings, will control.
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(g) Notices. All notices and other communications required or
permitted under this Agreement must be in writing and will be deemed given when:
Delivered personally; sent by United States registered or certified mail, return
receipt requested; transmitted by facsimile confirmed by United States first
class mail; or sent by overnight courier. Notices to the Company shall be sent
to 0 Xxxxxxx Xxxx Xxxx, Xxxxxxx, XX 00000, Attention: General Counsel (FAX
number (000) 000-0000), and notices to Executive shall be sent to Executive's
last known residence address and/or fax number contained in the Company's
records, or to such other place as either party may subsequently designate for
its receipt of notices.
(h) Invalidity. If any term or provision contained herein is
to any extent invalid or unenforceable, such term or provision will be reformed
so that it is valid, and such invalidity or unenforceability will not affect any
other provision or part hereof.
(i) Applicable Law. This Agreement will be governed by the
laws of the Commonwealth of Pennsylvania, as determined without regard to the
conflict of laws principles thereof.
(j) Effective Date. This Agreement shall be effective as of
June 1, 2001.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
the Company and Executive have executed this Agreement as of the date first
above written.
SYSTEMS & COMPUTER TECHNOLOGY
CORPORATION
By: /s/ Xxxx Xxxxxxx
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EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxxxxx
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