Exhibit 10.22
CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of March 11, 2005, by
and between Xxxxx, Inc., a Massachusetts corporation with its principal place
of business at 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("Keane"), and
Xxxxxx X. Xxxxxx (the "Executive"). Keane and the Executive are referred to
together herein as the "Parties."
WHEREAS, the Executive is currently employed as Senior Vice President,
North American Branch Operations, of the Company; and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company has authorized certain severance provisions in respect of senior
executives of the Company following the occurrence of a change of control in
order to assist in the retention of the Company's executives;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and the Executive agree as
follows:
1. TERM OF EMPLOYMENT. Subject to the benefits described in
paragraph 2, the Company retains the right to terminate the
employment of the Executive at any time, including, without
limitation, with or without notice and with or without Cause.
2. SEVERANCE BENEFITS UPON TERMINATION AFTER CORPORATE CHANGE IN
CONTROL. If within one year after a Change in Control (as
defined in Exhibit A to this Agreement) the Executive's
employment is terminated by the Company without Cause or by
the Executive for Good Reason, both as defined below (the
effective date of any such termination being hereinafter
referred to as the "Termination Date") the Executive shall be
entitled to the following severance benefits (and no others):
a. For a period of twenty-four months following the
Termination Date (the "Salary Continuation Period"),
(on the normal payroll schedule for the Executive in
effect immediately prior to the Termination Date) the
Company shall continue to pay the Executive the base
salary and targeted annual bonus (monthly on a pro
rata basis), both at the rate in effect immediately
before the Termination Date, EXCEPT THAT in the case
of a termination by the Executive for Good Reason,
disregarding any reduction thereof that was the basis
for such termination.
b. Upon the Termination Date, all stock options,
restricted stock and other equity awards previously
granted to the Executive shall become vested
immediately and shall be exercisable in full in
accordance with the applicable stock option,
restricted stock or other form of equity agreement
and the terms of any applicable stock or equity plan.
c. The Termination Date shall be treated as a qualifying
event under the Consolidated Omnibus Reconciliation
Act of 1985 ("COBRA"). Under COBRA, if the Executive
is covered by the group medical and/or dental plan
offered by Xxxxx, the Executive and his or her spouse
and dependents are entitled to elect a temporary
extension of health and/or dental coverage at group
rates in certain instances where coverage under the
plan would otherwise end ("Continuation Coverage").
If the Executive elects Continuation Coverage under
COBRA, during the period of such Continuation
Coverage, the Executive will be responsible for any
contribution
required from active employees of the Company under
the applicable group medical and/or dental plan. If
and to the extent this Section 2.c does not apply, as
where the Executive is not resident in or of the
United States, the Executive shall receive a monthly
stipend to offset medical and/or dental benefits lost
following the Termination Date.
d. For 12 months, the Executive shall be entitled to
continue participation in the executive financial
planning benefit in effect as of the Termination
Date.
e. Neither the Executive nor Xxxxx shall have the right
to accelerate or to defer the delivery of the
payments to be made under this Section 2; PROVIDED,
HOWEVER, that if the Executive is a "specified
employee" as defined in Section 409A(a)(2)(B)(i) of
the Internal Revenue Code of 1986, as amended (the
"Code"), and any of the payments to be made to the
Executive under this Section 2 constitute
"nonqualified deferred compensation" within the
meaning of Section 409A of the Code, then the
commencement of the delivery of any such payments
will be delayed to the date that is six months after
the Termination Date.
3. DEFINITIONS.
a. "GOOD REASON". "Good Reason" means termination at the
Executive's initiative within one year after a Change
in Control (as defined in Exhibit A to this
Agreement) if:
(i) The Executive's title, duties, status,
reporting relationship, authority or
responsibilities have been materially and
adversely affected; or
(ii) The Executive's compensation, including base
salary and target annual bonus, has been
reduced by 10% or greater; or
(iii) The Executive's principal place of
employment immediately prior to the Change
of Control is relocated to a location more
than 25 miles from such place of employment.
The Executive shall give the Company Notice of termination
specifying which of the foregoing provisions is applicable and
the factual basis therefor, and if the Company fails to remedy
such material failure, the Termination Date shall be the 30th
business day after such Notice is given or such other date as
the Company and the Executive shall agree.
b. "CAUSE". For purposes of this Agreement only, "Cause"
means and shall be limited to:
(i) wrongful misappropriation of the funds or
property of the Company;
(ii) use of alcohol or illegal drugs interfering
with the performance of the Executive's
obligations, continuing after written
warning of such actions;
(iii) admission, confession, or plea bargain to,
or conviction of, a felony, or of any crime
involving moral turpitude, dishonesty, or
unethical conduct;
(iv) commission of any willful, intentional or
grossly negligent act which would reasonably
be expected to materially injure the
reputation, business or business
relationships of the Company or which would
bring the
Executive or the Company into disrepute, or
the willful commission of any act which is a
breach of the Executive's fiduciary duties
to the Company;
(v) the deliberate or willful failure by the
Executive (other than by reason of the
Executive's physical or mental illness,
incapacity or disability) to substantially
perform his duties with the Company and the
continuation of such failure for a period of
30 days after delivery by the Company to the
Executive of Notice specifying the scope and
nature of such failure and the Company's
intention to terminate the Executive for
Cause; or
(vi) commission of any act which constitutes a
material breach of the policies of the
Company, including but not limited to the
disclosure of any confidential information
or trade secrets pertaining to the Company
or any of its clients.
For purposes of this Section, any act or failure to
act of the Executive shall not be considered
"willful" unless done or omitted to be done by the
Executive not in good faith and without reasonable
belief that the Executive's action or omission was in
the best interest of the Company. The Company shall
give the Executive Notice of termination specifying
which of the foregoing provisions is applicable. The
effective Termination Date shall be the 30th business
day after such Notice is given or such other date as
the Company and the Executive shall agree.
4. GROSS-UP PAYMENT.
a. In the event an Executive becomes entitled to any
benefits or payments under this Agreement or under
any other agreement, plan or arrangement to which the
Company and the Executive are parties, including any
non-cash benefit or deferred payment or benefit (the
"Total Benefits"),
(i) where such payment or benefit is contingent
on a Change in Control (as defined in
Exhibit A to this Agreement), and
(ii) in the event that any of the Total Benefits
will be subject to a tax imposed by Section
4999 of the Code (the "Excise Tax"), due to
classification as an excess parachute
payment in accordance with Section 280G of
the Code,
the Company shall pay to him an additional amount
(the "Gross-Up Payment") such that the net amount
retained by him, after reduction of any Excise Tax on
the Total Benefits and any federal, state and local
income tax, Excise Tax and FICA and Medicare
withholding taxes upon the payment provided for by
this Section, shall be equal to the Total Benefits.
For purposes of this Gross-Up Payment, the amount of
the Excise Tax (if any) imposed on any non-cash
benefits or any deferred payment or benefit shall be
reasonably determined by the Company, after
consultation with its legal and tax advisors.
b. For purposes of determining the amount of the
Gross-Up Payment, an Executive shall 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 rate of
taxation in the state and locality of his residence
on the Termination Date, net of the reduction in
federal income taxes which could be obtained from
deduction of such state and local taxes (calculated
by
assuming that any reduction under Section 68 of the
Code in the amount of itemized deductions allowable
to him applies first to reduce the amount of such
state and local income taxes that would otherwise be
deductible by him).
c. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into
account for purposes of calculating the Gross-Up
Payment, the Executive shall promptly repay to the
Company the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of
the Gross-Up Payment attributable to the Excise Tax,
federal, state and local income taxes and FICA and
Medicare withholding taxes imposed on the portion of
the Gross-Up Payment being repaid by him to the
extent that such repayment results in a reduction in
Excise Tax, FICA and Medicare withholding taxes
and/or federal, state or local income taxes) plus
interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code.
d. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder, the
Company shall make an additional Gross-Up Payment to
him in respect of such excess (plus any interest,
penalties or additions payable by him with respect to
such excess) at the time that the amount of such
excess is finally determined.
e. The Gross Up Payment shall be made within two and a
half months after the Termination Date; PROVIDED,
HOWEVER, that if the Executive is a "specified
employee" as defined in Section 409A(a)(2)(B)(i) of
Code and any of the payments to be made to the
Executive under this Section 4 constitute
"nonqualified deferred compensation" within the
meaning of Section 409A of the Code, then the
commencement of the delivery of any such payments
will be delayed to the date that is six months after
the Termination Date.
f. The intent of this Section 4 is to make the Executive
whole, to the extent allowed under applicable laws
and regulations, such that he is not detrimentally
impacted by the imposition of a tax over and above
the marginal rate applicable to his Xxxxx-related
earnings as a result of a Change In Control. To the
extent the Executive is subject to income tax laws of
a country other than the United States, the Company
shall use its best efforts to implement the intent of
this Section 4 in accordance with applicable laws and
regulations.
5. OBLIGATIONS AND RESTRICTIVE COVENANTS. All obligations and
restrictive covenants as set forth in any existing or future
Employment Agreements, Stock Option Agreements, or the like,
shall remain in full force and effect notwithstanding this
Agreement, including but not limited to, provisions and/or
restrictions relating to trade secrets, confidential
information, works made for hire and inventions, competition,
solicitation, hiring, Company property, et cetera, EXCEPT THAT
any and all such obligations and restrictive covenants shall
remain in full force and effect for the entire Salary
Continuation Period notwithstanding any shorter period set
forth therein.
6. NOTICES
a. Each notice, demand, consent or communication
(hereinafter "Notice") which is or may be required to
be given by any party to the other party in
connection with this Agreement shall be in writing
and given by facsimile, personal delivery, receipted
delivery services, or by certified mail, return
receipt requested, prepaid and properly addressed to
the other party as shown below.
b. Notices shall be effective on the date sent via
facsimile, the date delivered personally or by
receipted delivery service, or three (3) days after
the date mailed:
(i) To the Company:
Legal Department
Attn: Corporate Counsel
Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
(ii) To the Executive:
At the residence address most recently filed
with the Company.
7. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party
may assign either this Agreement or any of its rights,
interests or obligations hereunder without the prior written
approval of the other Party; provided, that Xxxxx may assign
its rights, interests or obligations hereunder to: (a) a
subsidiary, subdivision or affiliate, provided that Xxxxx
shall remain responsible to the Executive for such obligations
in the event they are not met by such assignee; or (b) to a
person, corporation, organization or other entity that
acquires (whether by stock purchase or merger or otherwise)
all or substantially all of the business or assets of Xxxxx.
8. MISCELLANEOUS.
a. This Agreement may be amended or modified only by a
written instrument executed by Xxxxx and the
Executive. Notwithstanding anything herein to the
contrary, to the extent that the Executive or Xxxxx
reasonably believe that Section 409A of the Code will
result in adverse tax consequences to the Executive
as a result of this Agreement, then the Executive and
Xxxxx shall renegotiate this Agreement in good faith
in order to minimize or eliminate such tax
consequences and retain the basic economics of this
Agreement to the extent possible.
b. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the laws
of conflicts) of the Commonwealth of Massachusetts.
c. Except in the case of Section 7 above, the term
"Xxxxx" or the "Company" shall include Xxxxx, Inc.
and any of its subsidiaries, subdivisions and
affiliates. The captions of the sections of this
Agreement are for convenience of reference only and
in no way define, limit or affect the scope or
substance of any section of this Agreement.
d. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but both
of which together shall constitute one and the same
instrument.
e. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or
enforceability of any other provision of this
Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the
remaining portion of such provision, together with
all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and
effect to the fullest extent consistent with law.
f. The Executive's or the Company's failure to insist
upon strict compliance with any provision of, or to
assert any right under, this Agreement shall not be
deemed to be a waiver of such provision or right or
of any other provision of or right under this
Agreement.
x. Xxxxx shall have the right to withhold all applicable
income and employment taxes due with respect to any
payment made to the Executive under this Agreement.
Executed this 11th day of March, 2005
By: /s/ Xxxxx X. Xxxxx
--------------------
Xxxxx X. Xxxxx
Xxxxx, Inc.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
EXHIBIT A
DEFINITION OF "CHANGE IN CONTROL"
"Change in Control" shall mean any of the following:
(a) any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or
trust of the Company or any of its subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of either (A) the combined voting power of the Company's
then outstanding securities having the right to vote in an election of
the Company's Board ("Voting Securities") or (B) the then outstanding
shares of Company's common stock ("Common Stock") (other than as a
result of an acquisition of securities directly from the Company); or
(b) During any period of two years or less, persons who at the beginning of
such period (the "Commencement Date") constitute the Company's Board
(the "Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the Company subsequent
to the Commencement Date shall be considered an Incumbent Director if
such person's election was approved by or such person was nominated for
election by a vote of at least a majority of the Incumbent Directors;
but provided further, that any such person whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of members of the Board or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board, including by reason of agreement intended
to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or
(c) the stockholders of the Company shall approve (A) any consolidation or
merger of the Company where the stockholders of the Company,
immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate fifty percent (50%) or
more of the voting shares of the Company issuing cash or securities in
the consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely
as the result of an acquisition of securities by the Company which, by
reducing the number of shares of Common Stock or other Voting
Securities outstanding, increases the proportionate number of shares
beneficially owned by any person to fifty percent (50%) or more of
either (A) the combined voting power of all of the then outstanding
Voting Securities or (B) Common Stock; provided, however, that if any
person referred to in this sentence shall thereafter become the
beneficial owner of any additional shares of Voting Securities or
Common Stock (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities
directly from the Company) and immediately thereafter beneficially owns
fifty percent (50%) or more of either (A) the combined voting power of
all of the then outstanding Voting Securities or (B) Common Stock, then
a "Change of Control" shall be deemed to have occurred for purposes of
the foregoing clause (a).
