EXHIBIT 10.2
EMPLOYMENT AND COMPENSATION AGREEMENT
THIS EMPLOYMENT AND COMPENSATION AGREEMENT (as the same may be amended,
modified or supplemented from time to time, this "Agreement") is made as of
April 25, 2002 (the "Effective Date"), between ChoicePoint Inc., a Georgia
corporation (together with all successors thereto, "Employer"), and Derek V.
Smith, a resident of the State of Georgia ("Executive").
STATEMENT OF TERMS
The parties hereby agree as follows:
1. Employment Term.
(a) Employer hereby employs Executive, and Executive hereby
accepts employment by Employer, upon the terms and subject to the
conditions hereinafter set forth.
(b) The term of this Agreement shall commence as of the Effective
Date and shall continue for a period of 5 years until the close of
business on April 25, 2007 (the "Initial Term"), unless renewed as
specified herein or terminated earlier under Section 4 or Section 5
hereof. If the Agreement has not been terminated pursuant to Section
4, the term of this Agreement shall be automatically extended for 3
years until the close of business on April 25, 2010 (the "Renewal
Term"). After the Initial Term, the Renewal Term, including any
additional term mutually agreed to by the Employer and the Executive,
Executive understands that, unless the events triggering Section 5
have not occurred, Executive: (i) will be deemed to be an employee at
will and (ii) hereby agrees, to the extent his employment is to
continue after the expiration of the Agreement, to enter into, prior
to the expiration of the Agreement, such reasonable employee
confidentiality, non-solicitation and assignment agreements with
respect to Executive's employment, as Employer then customarily
requires of its executives and other similarly situated employees.
2. Title and Duties.
(a) Executive is engaged initially with the title and duties described on
Exhibit A attached hereto. Executive shall perform and discharge well
and faithfully such duties, and such other duties which may be
assigned by Employer to Executive from time to time in connection
with the conduct of the business of Employer; however, such latter
duties shall be generally consistent with those set out in Exhibit A
hereto.
(b) In addition to the duties specifically assigned to Executive pursuant
to Section 2(a) hereof, Executive shall: (i) diligently follow and
implement all management policies and decisions communicated to
Executive by Employer; (ii) timely prepare and forward all reports
and accountings as may be requested by Employer of Executive; (iii)
devote substantially all of Executive's time, energy and skill during
regular business hours to the performance of the duties of
Executive's employment (reasonable vacations and reasonable absences
due to illness excepted); and (iv) not devote any time to any
interest that conflicts with the business of Employer or any of its
affiliates.
(c) Executive shall have the right to make contracts binding
on Employer or any of its affiliates, but only to the extent
consistent with the duties described on Exhibit A attached hereto or
otherwise as approved by Employer's Board of Directors.
(d) All funds and property received by Executive on behalf of Employer or
any of its affiliates shall be received and held by Executive in
trust, and Executive shall account for and remit all such funds to
Employer.
3. Compensation and Benefits.
(a) Annual Review of Compensation and Benefits. Employer agrees to (i)
review and evaluate annually the compensation package described in
this Section 3 and in Exhibit B for competitiveness in the external
market, consistency with internal compensation practices and other
appropriate review criteria, and (ii) increase the compensation
package as appropriate with approval, if necessary, from the
appropriate committee of Employer's Board of Directors.
(b) Base Salary. As compensation for services hereunder, during the
Initial Term, Employer shall pay to Executive a minimum of an annual
base salary of $875,000 (the "Base Salary") and effective June 1,
2002 a Base Salary of $1,000,000. Executive's performance shall be
reviewed annually, and based upon such review, his Base Salary shall
be subject to modification from time-to-time in accordance with the
approvals of the ChoicePoint Compensation Committee. Base Salary
shall be paid in accordance with the standard payroll payment
practices of Employer in effect from time to time.
(c) Incentive Pay. Executive shall be entitled to participate in
Employer's annual incentive program, subject to the terms and
provisions of such program as established by Employer from
time-to-time. Such annual incentive compensation program is set forth
in Exhibit B.
(d) Omnibus Plan. Executive shall also be eligible to receive periodic
grants under the ChoicePoint Inc. 1997 Omnibus Stock Incentive Plan
("Omnibus Plan") and
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(e) any successor thereto. Such grants may provide for stock option
grants, restricted stock grants and other grants as provided for by
the Omnibus Plan, for the number of grants, at a price and on the
terms and conditions, as may be determined by the Management
Compensation and Benefits Committee (the "Compensation Committee")
from time to time in its sole discretion. The initial target value of
the grants is reflected on Exhibit B. Such Omnibus Plan may provide
for long-term incentive grants, such as performance shares or units
or stock appreciation rights, as approved by the Compensation
Committee.
(f) Non-Qualified Plan. Executive shall be entitled to participate in the
ChoicePoint Inc. Deferred Compensation Plan ("Deferred Compensation
Plan") which may include one or more of the following: (i) voluntary
deferrals of salary or bonus, (ii) Employer contributions otherwise
limited under the Employer's qualified retirement plans on account of
limits imposed by the Internal Revenue Code ("Code"), and (iii) a
supplemental retirement contribution, as set forth in Exhibit B.
(g) Benefits. Executive shall be entitled to benefits and perquisites, as
set forth in Exhibit B and consistent with the Employer's benefit
programs and Executive Fringe Benefit Policy.
(h) Other Plans. Executive shall be entitled to participate in other
executive and employee benefit plans and arrangements, as Employer
may have or establish from time to time for similarly situated
executives. Such reference to Other Plans shall not be construed to
require Employer to establish any such plan, program or arrangement
or prevent the modification or termination of any such plan, program
or arrangement once established.
(i) Vacation. Executive's annual vacation benefits shall be a minimum
number of weeks as provided in Exhibit B hereto, but such benefits
may be increased if Executive is eligible for additional benefits in
accordance with Employer's regular vacation plan applicable to
executives and other salaried employees (including credit for service
with Equifax Inc. prior to the Effective Date).
(j) Expense Reimbursement. Executive shall be entitled to be reimbursed
in accordance with the policies of Employer, as adopted and amended
from time to time, for all reasonable expenses incurred by Executive
in connection with the performance of Executive's duties of
employment hereunder; provided, however, Executive shall, as a
condition of such reimbursement, submit verification of the nature
and amount of such expenses in accordance with the reimbursement
policies from time to time adopted by Employer.
(j) Entire Compensation. The salary and benefits set forth in this
Section 3 and Exhibit B shall be the only compensation payable to
Executive with respect to
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his employment hereunder (except as provided in Sections 4(c), 4(e)
and 5 hereof), and Executive shall not be entitled to receive any
compensation in addition to that set forth herein for any services
provided by Executive in any capacity to Employer or any of its
affiliates. Employer or affiliate may increase either the components
of compensation or the amount of compensation described in Exhibit B
at any time, in its total discretion, without binding Employer to
continue to provide additional increases at future dates.
(k) Withholding. Employer may deduct from each payment of salary and
other benefits hereunder all amounts required to be deducted and
withheld in accordance with applicable federal and state income, FICA
and other withholding requirements.
4. Termination.
(a) Termination by Employer. Employer, at its sole election and by
written notice to Executive, shall have the right to terminate the
Agreement and Executive's employment hereunder at any time during or
immediately after expiration of the Initial Term or any additional
term, whether such termination is a Termination With Cause or a
Termination Without Cause.
(b) Termination by Executive. Executive, at his sole election and by
written notice to Employer, shall have the right to terminate the
Agreement and Executive's employment hereunder at any time during the
Initial Term or any additional term whether such termination is a
Constructive Termination or a Voluntary Resignation. In the event
Executive takes the position that a Constructive Termination has
occurred, Executive shall so notify Employer of such position in
writing within thirty (30) days of the occurrence of the event
Executive relies on for such Constructive Termination determination.
Executive shall specify the event upon which Executive relies and
specify in reasonable detail the facts and circumstances claimed to
provide the basis for the Constructive Termination.
(c) Automatic Termination. The Agreement and Executive's employment
hereunder shall automatically terminate on the date of the
Executive's death or twenty-four (24) months following the first day
of Executive's continuous absence due to his condition that triggers
his Total Disability. Except as provided in this subsection (c),
Employer shall have no further obligation to Executive or his heirs
or legal representatives with respect to this Agreement.
(i) Death. In the event of the death of the Executive, Employer
shall pay to Executive's designated beneficiary or
beneficiaries, or if there is no designated beneficiary, to
his estate (A) any Base Salary, benefits, and other
compensation accrued and vested as of the date of
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death and remaining unpaid at the Executive's death, (B) an
amount equal to 30 days of Executive's Base Salary, (C) any
death benefits payable under Employer's qualified and
non-qualified benefit plans pursuant to the terms and
provisions of such plans, (D) life insurance, at Employer's
expense consistent with Employer's Basic Life Insurance Plan
in addition to the amount specified on Exhibit B and (E) any
other benefits and perquisites specified on Exhibit B. Such
amounts shall be paid as soon as practicable following the
Executive's death in accordance with applicable plans,
policies or programs.
(ii) Total Disability. In the event of the Executive's Total
Disability, Employer shall pay the Executive (A) any Base
Salary, benefits, and other compensation accrued and vested
as of the date of Total Disability and remaining unpaid as
of the Executive's Total Disability, (B) short-term
disability benefits consistent with Employer's disability
policy; provided, such payments in no event shall be less
than one hundred (100%) percent of Base Salary until the
earlier of the end of Executive's period of Total Disability
or six (6) months and (C) any other benefits and perquisites
specified on Exhibit B. If the Executive's Total Disability
continues after the end of the expiration of six (6) months,
Employer shall pay Executive long-term disability benefits
consistent with Employer's disability policy; such benefits
in no event shall be less than those set forth on Exhibit B.
(d) Termination Without Payments. If this Agreement is terminated during
the Initial Term or any additional term by Executive's (1) Voluntary
Resignation or (2) Termination With Cause, Employer shall have no
further obligation to Executive or his heirs or legal representatives
with respect to this Agreement, except for Base Salary, benefits, and
other compensation accrued and vested up to the date of such
termination and remaining unpaid as of the Date of Termination.
(e) Termination With Payments. If this Agreement is terminated during the
Initial Term or any additional term by either (1) a Constructive
Termination or (2) a Termination Without Cause, then Employer shall
pay to Executive the Severance Benefits calculated in this Subsection
(e); provided, however, that Executive shall not be entitled to
receive any such severance payments until and unless Executive
executes and delivers to Employer within twenty-one (21) days after
the Date of Termination the Release set forth herein as Exhibit C,
and such Release becomes effective and irrevocable. Unless Employer
and Executive mutually agree to an alternative method of payments,
such Severance Benefits shall be paid by Employer to Executive in a
lump sum, and shall be paid as soon
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as practicable following the Effective Date of the Release but in no
event later than 15 days after such Effective Date.
Severance Benefits include:
(i) Employer shall pay Executive all Base Salary, benefits and
other compensation accrued as of Executive's Date of
Termination but which remains unpaid as of his Date of
Termination.
(ii) The Employer shall pay Executive an amount equal to the
total amount that would have resulted from the continuance
of Executive's Total Direct Compensation for the period
commencing on the Date of Termination and continuing for a
period of 2 years; provided, such severance amount shall not
be less than the benefits Executive is entitled to under the
Employer's Severance Pay Plan, if any. Additionally,
Employer shall pay to Executive the value of the Employer
contributions to all of Employer's qualified and
non-qualified retirement plans for the year in which
Executive's termination occurs. The benefits provided under
the Employer's Severance Pay Plan are not duplicative of
benefits provided under this Agreement.
(f) Definitions. The terms used in this Section 4, shall have the
meanings set forth in Section 11 hereof.
5. Change in Control.
(a) Assumption of Agreement. In the event of a Change in Control,
Employer will require any successor of the Employer, by agreement in
form and substance, expressly to assume and agree to perform this
Agreement. Failure of Employer to obtain such agreement prior to the
effective date of the Change of Control shall be a breach of this
Agreement and shall constitute a Good Reason Resignation.
(b) Term. This Change in Control Provision shall become effective on the
Effective Date and shall continue for a period of five (5) years
thereafter (the "Change in Control Term"); provided, however, that
commencing on the first anniversary of the Effective Date and, during
the term of the agreement, each anniversary thereafter, the Change in
Control Term shall automatically be extended for one (1) additional
year, unless at least sixty (60) days prior to any such anniversary
date, Employer shall have given Executive written notice of the
intention not to extend the Change in Control Provision.
(c) Severance Benefits. In the event that (i) Executive is employed by
Employer as of the effective date of a Change In Control
and Employer fails to obtain the
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assumption of agreement to perform this Agreement by Employer's
successor prior to the Change in Control or (ii) Executive is
employed by Employer at the time of a Change in Control and the
Executive's employment with the Employer terminates during the Change
in Control Term on account of Good Reason Resignation, then Executive
shall be entitled to the Severance Benefits specified in Subsection
(f).
(d) Notice Requirement. In the event Executive takes the position that a
Good Reason Resignation has occurred, Executive shall so notify
Employer of such position in writing within sixty (60) days of the
occurrence of the event Executive relies on for such Good Reason
Resignation determination. Executive shall specify the event upon
which Executive relies and specify in reasonable detail the facts and
circumstances claimed to provide the basis for the Good Reason
Resignation.
(e) Voluntary Resignation. In the event Executive voluntarily terminates
employment with Employer on account of a Voluntary Resignation that
does not constitute a Good Reason Resignation, Employer shall not be
required to make any payment referred to in this Section 5 to which
the Executive would otherwise be entitled in the event of a Change in
Control, except for Base Salary, benefits, and any other compensation
arrangements which the Executive has accrued and in which he is
vested under the Employer's plans and policies, but which remains
unpaid as of his Date of Termination. These earned but unpaid amounts
shall be paid to Executive as soon as practicable following
Executive's Voluntary Termination.
(f) Severance Benefits.
(i) Employer shall pay Executive all Base Salary,
benefits and other compensation accrued and vested as of
Executive's Date of Termination but which remain unpaid as
of the Date of Termination.
(ii) The Employer shall pay the Executive within 30 days
following the Date of Termination a lump sum amount equal to
the sum of (A) Executive's Total Direct Compensation
multiplied by 3 and (B) the Executive's Total Indirect
Compensation multiplied by 5; provided if any plan or
program which comprises a component of Total Direct
Compensation or Total Indirect Compensation would provide
for a different method of payment, the distribution
provisions of such plan or program will control.
(iii) The Employer shall provide a fully paid term life insurance
policy in an amount as described in Exhibit B, Section 3(f)
Benefits, for a period of five years.
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(iv) The amounts determined under Subsections (i) and (ii) hereof
shall be paid from the general assets of the Employer;
provided, however, the Employer reserves the right to set
aside assets to secure the payment of benefits hereunder by
establishing a non-qualified grantor trust upon such terms
and conditions as it deems appropriate.
(g) Tax Payments. In the event that any payments made to the Executive
under this Section 5 or any other payments made to the Executive by
the Employer are deemed to be "excess parachute payments" under
Section 280G of the Internal Revenue Code of 1986 (the "Code"), the
Employer agrees to provide a gross up payment to the Executive in
order to place him in the same after-tax position that he would have
been in had no excise tax become due and payable under Code Section
4999.
(h) Definitions. The terms used in this Section 5, shall have the
meanings set forth in Section 10.
6. Confidentiality; Employee Non-Solicitation.
(a) Trade Secrets and Confidential Information.
(i) All Proprietary Information (defined below), and all
materials containing them, received or developed by
Executive during the term of his employment by Employer (in
this Section 6, the term "Employer" refers collectively to
Employer and/or its affiliates) are confidential to
Employer, and will remain Employer's property exclusively.
Except as necessary to perform Executive's duties for
Employer, Executive will hold all Proprietary Information in
strict confidence, and will not use, reproduce, disclose or
otherwise distribute the Proprietary Information, or any
materials containing them, and will take those actions
reasonably necessary to protect any Proprietary Information.
Executive's obligations regarding Trade Secrets (defined
below) will continue indefinitely, while Executive's
obligations regarding Confidential Information (defined
below) will cease two (2) years from the Date of Termination
of Executive's employment with Employer for any reason.
(ii) "Trade Secret" means information, including, but not limited
to, technical and nontechnical data, formulas, patterns,
designs, compilations, computer programs and software,
devices, inventions, methods, techniques, drawings,
processes, financial plans, product plans, lists of actual
or potential customers and suppliers, research, development,
existing and future products and services, and employees of
Employer which (A) derives independent economic value,
actual or potential, from not being generally known to, and
not being easily
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ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (B) is
the subject of Employer's efforts that are reasonable under
the circumstances to maintain secrecy; or as otherwise
defined by applicable state law.
(iii) "Confidential Information" means any and all knowledge,
information, data, methods or plans (other than Trade
Secrets) which are now or at any time in the future during
Executive's employment will be developed, used or employed
by Employer which are treated as confidential by Employer
and not generally disclosed by Employer to the public, and
which relate to the business or financial affairs of
Employer, including, but not limited to, financial
statements and information, marketing strategies, business
development plans and product or process enhancement plans.
(iv) "Proprietary Information" means collectively the
Confidential Information and Trade Secrets. Proprietary
Information also includes information that has been
disclosed to Employer by a third party that Employer is
obligated to treat as confidential or secret.
(v) Notwithstanding anything to the contrary in this subsection
6(a), "Proprietary Information" does not include any
information that (A) is already known to Executive at the
time it is disclosed to Executive by Employer; or (B) before
being divulged by Executive (1) has become generally known
to the public through no wrongful act of Executive; (2) has
been rightfully received by Executive from a third party
without restriction on disclosure and without breach of an
obligation of confidentiality running directly or indirectly
to Employer; (3) has been approved for release to the
general public by a written authorization of Employer; (4)
has been independently developed by Executive without use,
directly or indirectly, of the Proprietary Information
received from Employer; or (5) has been furnished to a third
party by Employer without restrictions on the third party's
right to disclose the information.
(vi) In the event Executive is required by any court or
legislative or administrative body (by oral questions,
interrogatories, requests for information or documents,
subpoena, civil investigation demand or similar process) to
disclose any Proprietary Information of Employer, Executive
shall provide Employer with prompt notice of such
requirement in order to afford Employer an opportunity to
seek an appropriate protective order. However, if Employer
is unable to obtain or does not seek such protective order
and Executive is, in the opinion of his counsel, compelled
to disclose such Proprietary Information under
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pain of liability for contempt or other censure or penalty,
disclosure of such information may be made without
liability.
(vii) Executive acknowledges that Employer is obligated under
federal and state fair credit reporting and similar laws and
regulations to hold in confidence and not disclose certain
information regarding individuals, firms or corporations
which is obtained or held by Employer, and that Employer is
required to adopt reasonable procedures for protecting the
confidentiality, accuracy, relevancy and proper utilization
of consumer report information as such term is defined in
such acts. In that regard, except as necessary to perform
Executive's duties for Employer, Executive will hold in
strict confidence, and will not use, reproduce, disclose or
otherwise distribute any information which Employer is
required to hold confidential under applicable federal and
state laws and regulations, including the federal Fair
Credit Reporting Act (15 U.S.C. Section 1681 et. seq.) and
analogous state fair credit reporting statutes.
(b) Employee Non-Solicitation. During the term of Executive's employment
by Employer and for two (2) years after his termination, Executive
will not, either directly or indirectly, on his behalf or on behalf
of others, solicit for employment or hire, or attempt to solicit for
employment or hire, any employee of Employer or anyone who was an
employee of Employer at any time during the twelve (12) month period
immediately preceding the date of Executive's termination with whom
Executive had contact in the course of his employment by Employer.
(c) Customer Non-Solicitation. During the term of Executive's employment
by Employer and for two (2) years after his termination, Executive
shall not directly or indirectly, for himself or for any person, firm
or employer, divert, interfere with, disturb, or take away, or
attempt to divert, interfere with, disturb, or take away, the
patronage of any customers of Employer that obtained or contracted to
obtain goods or services from the Employer during the twelve (12)
month period immediately preceding the date of Executive's
termination with which Executive had contact during the term of
Executive's employment by Employer.
(d) Return of Property. At Employer's request or on termination of
Executive's employment with Employer for any reason, Executive will
deliver promptly to Employer all property of Employer in his
possession or control, including, without limitation, all Proprietary
Information, all materials containing them, and all originals and
copies of all documents (whether in hard copy or stored in electronic
form) which relate to or were prepared in the course of Executive's
employment (including, but not limited to, contracts, proposals or
any information concerning the identity of customers, services
provided by Executive and the pricing of these services).
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(e) Remedies. Executive agrees that the covenants and agreements
contained in this Section 6 are of the essence of this Agreement;
that each of such covenants is reasonable and necessary to protect
and preserve the interests and properties of Employer and the
business of Employer; that immediate and irreparable injury, loss and
damage will be suffered by Employer should Executive breach any such
covenants and agreements; and that, in addition to other legal or
equitable remedies available to it (including but not limited to
damages, royalties and penalties pursuant to applicable law), in
recognition of the fact that Executive has special, unique, unusual
and extraordinary qualities that provide peculiar value to Employer's
business, Employer shall be entitled to the remedies of injunction
and/or specific performance, if available, to prevent a breach or
contemplated breach by Executive of any of such covenants or
agreements.
7. Inventions.
(a) Generally.
(i) Executive agrees that all Company Inventions (defined below)
conceived or first reduced to practice by Executive during
Executive's employment by Employer and all copyrights and
other rights to such Company Inventions shall become the
property of Employer. Executive hereby irrevocably assigns
to Employer all of Executive's rights to all Company
Inventions.
(ii) Executive agrees that if Executive conceives an Invention
(defined below) during Executive's employment with Employer
for which there is a reasonable basis to believe that the
conceived Invention is a Company Invention, Executive shall
promptly provide a written description of the conceived
Invention to Employer adequate to allow evaluation thereof
for a determination as to whether the Invention is a Company
Invention.
(iii) If, upon commencement of Executive's employment with
Employer under this Agreement, Executive has previously
conceived any Invention or acquired any ownership interest
in any Invention, which: (A) is Executive's property, or of
which Executive is a joint owner with another person or
entity; (B) is not described in any issued patent as of the
Effective Date; and (C) would be a Company Invention if such
Invention was made while Executive is an employee of
Employer, then Executive shall, at his election, either: (1)
provide Employer with a written description of the Invention
on Exhibit D attached hereto, in which case the written
description (but no rights to the Invention) shall
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become the property of Employer; or (2) provide Employer
with a license as specified in subsection 7(a)(iv) of this
Agreement.
(iv) If Executive has previously conceived or acquired any
ownership interest in an Invention described by the criteria
set forth in the immediately preceding subsection 7(a)(iii)
and Executive elects not to disclose such Invention to
Employer as provided therein, then Executive hereby grants
to Employer a nonexclusive, paid up, royalty-free license to
use and practice such Invention.
(v) Executive hereby represents to Employer that he owns no
patents, individually or jointly with others.
(vi) Notwithstanding any other provision in this Section 7, in no
event shall Executive's assignment of any Invention to
Employer apply to an Invention that Executive develops
entirely on his own time during his employment with Employer
without using Employer's equipment, supplies, facilities,
Proprietary Information, except for any Inventions that
either: (A) relate at the time of conception or reduction to
practice of the Invention to the Employer's business, or to
actual or demonstrably anticipated research or development
of Employer; or (B) result from any work performed by
Executive for Employer.
(b) Copyrights.
(i) Executive agrees that any Works (defined below) created by
Executive in the course of performing Executive's duties as
an employee of Employer are subject to the "Work for Hire"
provisions contained in Sections 101 and 201 of the United
States Copyright Law, Title 17 of the United States Code.
All right, title and interest to copyrights in all Works
which have been or will be prepared by Executive within the
scope of Executive's employment with Employer will be the
property of Employer. Executive further acknowledges and
agrees that, to the extent the provisions of Title 17 of the
United States Code do not vest in Employer the copyrights to
any such Works, Executive shall assign and hereby does
assign to Employer all right, title and interest to
copyrights which Executive may have in such Works.
(ii) Executive agrees to promptly disclose to Employer all Works
referred to in the immediately preceding subsection and
execute and deliver all applications for registration,
registrations, and other documents relating to the copy
rights to such Works and provide such additional assistance,
as Employer may deem necessary and desirable to secure
Employer's title to the copyrights in such Works. Employer
shall be responsible for
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all expenses incurred in connection with the registration of
all such copyrights.
(iii) Executive hereby represents to Employer that he claims no
ownership rights in any Works, except those described on
Exhibit D attached hereto.
(c) Section 7 Definitions. As used in this Section 7, the following terms
shall have the meanings ascribed to them below:
(i) "Company Invention" means any Invention which is conceived
by Executive alone or in a joint effort with others during
Executive's employment by Employer which (A) may be
reasonably expected to be used in a product or service of
Employer, or a product or service similar to a product or
service of Employer; (B) results from work that Executive
has been assigned as part of his duties as an employee of
Employer; (C) is in an area of technology which is the same
or substantially related to the areas of technology with
which Executive is involved in the performance of
Executive's duties as an employee of Employer; or (D) is
useful, or which Executive reasonably expects may be useful,
in any manufacturing, product or service design process of
Employer.
(ii) "Invention" means any discovery, whether or not patentable,
including, but not limited to, any useful idea, invention,
improvement, innovation, design, process, method, formula,
technique, machine, manufacture, composition of matter,
algorithm or computer program, as well as improvements
thereto, which is new or which Executive has a reasonable
basis to believe may be new.
(iii) "Work" means a copyrightable work of authorship, including
without limitation, any technical descriptions for products,
services, user's guides, illustrations, advertising
materials, computer programs (including the contents of read
only memories) and any contribution to such materials.
(d) Statutory Notice. In accordance with Section 2872 of the California
Labor Code, Executive is hereby notified that the provisions of this
Section 6 requiring assignment of certain Inventions to Employer do
not, in any event, apply to any invention which qualifies under the
provisions of Section 2870 of such Code. Section 2870(a) of the
California Labor Code provides as follows:
Section 2870. Inventions on Own Time - Exemption from Agreement
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(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or
trade secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or
demonstrably anticipated research or development of the
employer; or
(2) Result from any work performed by the employee for the
employer.
8. Indemnification and Insurance.
Employer agrees that it will indemnify and hold Executive harmless
from and against any and all liability sustained by Executive as a
consequence of his good faith actions, or failure to act, in the
performance of his duties hereunder. This indemnification is
subject to and limited by the provisions of Employer's corporate
By-Laws and the laws of the State of Georgia, as the same may be
amended from time to time. In addition, and as further security
for said agreement (but not to create any duplication of
reimbursement), Employer will maintain commercially standard
Directors and Officers Liability Insurance with a reputable
insurer in amounts which are customary for such companies under
similar circumstances.
9. Notice. All notices, requests, demands and other communications required
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or if mailed, by United States certified or registered mail,
prepaid to the party to which the same is directed at the following addresses
(or at such addresses as shall be given in writing by the parties to one
another):
If to Employer, to:
ChoicePoint Inc.
1000 Alderman Drive
Alpharetta, Georgia 30005
Attention: General Counsel
If to Executive, to:
Derek V. Smith
14
Notices delivered in person shall be effective on the date of delivery.
Notices delivered by mail as aforesaid shall be effective upon the third
calendar day subsequent to the postmark date thereof.
10. Miscellaneous.
(a) Other Employee Benefits. The benefits under this Agreement shall not
be affected by or reduced because of any other benefits to which the
Employee may be entitled by reason of his continuing employment with
the Employer or the termination of his employment with the Employer,
and no other such benefit by reason of such employment shall be so
affected or reduced because of the benefits bestowed by this
Agreement; provided, however, that the foregoing will not be
interpreted to require duplicative severance, medical or other
"health insurance" benefits.
(b) Assignment. Except as provided in Section 5(a), this Agreement may
not be assigned by either Employer or Executive without the prior
written consent of the other party.
(c) Waiver. The waiver by one party of any breach of this Agreement by
the other party shall not be effective unless in writing, and no such
waiver shall constitute the waiver of the same or another breach on a
subsequent occasion.
(d) Amendment. This Agreement may not be modified, amended, supplemented,
or terminated except by a written instrument executed by the parties
hereto.
(e) Severability. Each of the covenants and agreements herein above
contained shall be deemed separate, severable and independent
covenants, and in the event that any covenant shall be declared
invalid by any court of competent jurisdiction, such invalidity shall
not in any manner affect or impair the validity or enforceability of
any other part or provision of such covenant or of any other covenant
contained herein. If a court of competent jurisdiction shall
determine that any provision contained in this Agreement, or any part
thereof, is unenforceable for any reason, the parties hereto
authorize such court to reduce the duration or scope of such
provision, or otherwise modify such provision, so that such provision
in its reduced or modified form will be enforceable.
(f) Legal Fees. In the event (1) the Employer breaches this Agreement,
(2) the Executive is terminated by the Employer other than for Cause,
(3) the Executive terminates his employment for Good Reason, or (4)
the Executive terminates his employment on account of a Constructive
Termination, the Employer shall reimburse the Executive for all legal
fees and expenses reasonably incurred by the Executive as a result of
such termination, including all fees and expenses, if any, incurred
in contesting or disputing any such termination or in seeking to
15
obtain or enforce any right or benefit provided by this Agreement;
provided that, in order to be reimbursed under subsection (4) of this
paragraph, the Executive must prevail in a court of law on his claim
that the termination was on account of a Constructive Termination.
(g) Captions and Section Headings. Captions and section headings used
herein are for convenience only and are not a part of this Agreement
and shall not be used in construing it.
(h) Entire Agreement. This Agreement constitutes the entire understanding
and agreement of the parties with respect to its subject matter and
any and all prior agreements, understandings or representations with
respect to the subject matter hereof are terminated and canceled in
their entirety and are of no further force or effect.
(i) Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the
laws of the State of Georgia, without regard to the conflicts of laws
provisions thereof.
(j) Exhibits. All exhibits to this Agreement are incorporated herein by
reference thereto.
(k) Survival. The covenants of Executive in Sections 6 and 7, and the
obligations of Employer in Sections 4 and 5 to the extent provided
therein, shall survive the termination of this Agreement and
Executive's employment hereunder and shall not be extinguished
thereby.
(l) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will take effect as an original and all
of which shall evidence one and the same agreement.
11. Definitions.
(a) "Change in Control" means if, at any time, any of the following
events shall have occurred:
(i) The Employer is merged or consolidated or reorganized into
or with another corporation or other legal person, and as a
result of such merger, consolidation or reorganization, less
than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction is held in the aggregate
by the holders of Voting Shares immediately prior to such
transaction;
(ii) The Employer sells or otherwise transfers all or
substantially all of its assets to any other corporation or
other legal person, and as a result of such sale or transfer
less than a majority of the combined voting power
16
of the then-outstanding securities of such corporation or
person immediately after such sale or transfer is held in
the aggregate by the holders of Voting Shares immediately
prior to such sale or transfer;
(iii) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form, or report), each as
promulgated pursuant to the Securities Exchange Act of 1934
(the "Exchange Act"), disclosing that any person (as the
term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities representing thirty (30%)
percent or more of the Voting Shares;
(iv) Employer files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or
any successor schedule, form or report or item therein) that
a change in control of the Employer has or may have occurred
or will or may occur in the future pursuant to any
then-existing contract or transaction, provided, that a
Change in Control will not be deemed to have occurred if a
potential change in control disclosed in such filing does
not in fact occur; or
(v) If during any period of two (2) consecutive years,
individuals who at the beginning of any such period
constitute the Directors of the Employer cease for any
reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Employer's
shareholders, of each Director of the Employer first elected
during such period was approved by a vote of at least
two-thirds of the Directors of the Employer then still in
office who were Directors of the Employer at the beginning
of any such period.
(vi) Notwithstanding the foregoing provisions of Subsections
(iii) and (iv) above, a "Change in Control" shall not be
deemed to have occurred for purposes of this Agreement (A)
solely because (1) the Employer, (2) a subsidiary of the
Employer, (3) any Employer-sponsored employee stock
ownership plan or other employee benefit plan of the
Employer or (4) Executive, either files or becomes obligated
to file a report or proxy statement under or in response to
Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or
any successor schedule, form, or report or item therein)
under the Exchange Act, disclosing beneficial ownership by
such company, plan or the Executive of shares of Voting
Shares, whether in excess of thirty (30%) percent or
otherwise, or because the Employer reports that a change of
control of the Employer has or may have occurred or will or
may occur in the future by reason of such
17
beneficial ownership or (B) solely because of a change in
control of any Subsidiary.
(vii) Notwithstanding the foregoing, if prior to any event
described in Subsections (i), (ii), (iii) or (iv) of this
Subsection (a) instituted by any person who is not an
officer or director of the Employer, or prior to any
disclosed proposal instituted by any person who is not an
officer or director of the Employer which could lead to any
such event, management proposes any restructuring of the
Employer which ultimately leads to an event described in
Subsections (i), (ii), (iii) or (iv) of this Subsection (a)
pursuant to such management proposal, then a "Change in
Control" shall not be deemed to have occurred for purposes
of this Agreement.
(b) "Constructive Termination" means termination by Executive of this
Agreement and employment with the Employer (except in connection with
Executive's death, Total Disability or in anticipation by Executive
of a Termination with Cause) as a result of (i) assignment to
Executive by Employer of duties that are materially inconsistent with
Executive's position, duties or responsibilities as described on
Exhibit A, (ii) any material reduction in one or more components or
elements of Executive's most recent compensation and benefits package
described in Section 3 and in Exhibit B, Section 3. Compensation and
Benefits hereof, (iii) a material failure by Employer to fulfill its
obligations under this Agreement which is not cured within ten (10)
business days after receipt by Employer of such written notice from
Executive specifying the nature of the material failure, (iv)
assignment to Executive by Employer of a different reporting
relationship than described on Exhibit A, (v) a change in Executive's
location of employment outside of the standard statistical
metropolitan area of Atlanta, GA, or (vi) a material diminishment in,
or a material alteration of, Executive's duties as described in
Exhibit A.
(c) "Date of Termination" means (i) the date on which the written notice
under Section 4 or Section 5 is given by Executive or Employer;
provided, if within thirty (30) days after receiving Executive's
notice, Employer notifies Executive that a dispute exists concerning
the termination, the Date of Termination shall be the date on which
the dispute is finally resolved, either by mutual written agreement
of the parties, by a binding and final arbitration award if agreed
upon by the Executive and the Employer or by a final judgment, order
or decree of a court of competent jurisdiction, the time for appeal
therefrom having expired and no appeal having been perfected;
provided, during the period of dispute, Employer agrees to continue
Executive's Total Compensation or (ii) in the case of the failure of
the Employer's successor to assume this Agreement, the effective date
of the Change in Control.
18
(d) "Employer," for purposes of Sections 4 and 5, means the Employer as
herein before named and any successor which executes the Agreement or
otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(e) "Good Reason Resignation" means termination of this Agreement by
Executive during the Change in Control Term as a result of (i) any
diminishment in, or an alteration of, Executive's duties inconsistent
with position and status with the Company as in effect immediately
prior to the Change in Control, (ii) assignment to Executive by
Employer of duties that are inconsistent with Executive's position,
duties and responsibilities in effect immediately prior to the Change
in Control, (iii) any removal of Executive from or failure to
re-elect him or appoint him to any of such positions, except in the
case of a termination of employment on account of the willful and
continued failure by the Executive to substantially perform his
duties as described in Exhibit A for the Employer, or on account of
Total Disability, (iv) any reduction in one or more components or
elements of Executive's compensation and benefits package described
in Section 3 and in Exhibit B hereof that is in effect immediately
prior to the Change in Control, (v) failure by the Employer to obtain
the assumption of agreement to perform this Agreement by any
successor to the Employer, (vi) a change in Executive's location of
employment outside of the standard statistical metropolitan area of
Atlanta, Georgia, (vii) assignment to Executive by Employer of a
different reporting relationship than described in Exhibit A, or
(viii) a failure to renew this Agreement for the Renewal Term
specified in Section 1.
(f) "Termination With Cause" means termination of this Agreement by
Employer as a result of (i) the willful engaging by Executive in
misconduct which is materially injurious to the Company, monetarily
or otherwise, (ii) conduct by Executive amounting to fraud,
dishonesty, gross negligence or willful misconduct in matters
affecting the fiscal affairs of Employer, (iii) material inattention
to, or breach of his duties hereunder (other than as a result of
illness or injury), provided such event has not been cured within ten
(10) business days after receipt by Executive of written notice from
Employer of its occurrence, (iv) excessive unexcused absences (other
than vacation as provided on Exhibit B, illness or disability) by
Executive from work, (v) Executive's material failure to comply with
federal, state or local laws in connection with his employment (vi)
Executive's conviction of (or plea of guilty or nolo contendere to) a
felony or to a misdemeanor involving moral turpitude, or (vii)
Executive's excessive use or abuse of drugs, alcohol or other toxic
substances impairing his ability to perform his duties hereunder.
(g) "Termination Without Cause" means a termination of this Agreement by
Employer which is not a termination because of the death of
Executive, a
19
Termination With Cause, a Voluntary Resignation, a Good Reason
Termination, a Constructive Termination or Executive's Total
Disability.
(h) "Total Compensation" means Total Direct Compensation plus Total
Indirect Compensation.
(i) "Total Direct Compensation" means the larger of (i) Executive's
highest weekly Base Salary paid during the 36 months preceding his
Date of Termination multiplied by 52 plus (ii) the greater of (a) his
highest annual incentive or commission pay earned during any of the
three (3) 12-month periods preceding the Executive's Date of
Termination or (b) his weekly Base Salary as of the Date of
Termination annualized for the year of termination multiplied by the
incentive or commission pay that would have been payable had target
incentive levels established in Exhibit B been earned for the year of
termination. Such pay shall be determined prior to any pre-tax
deferrals under the Employer's then existing deferral programs
including, but not limited to, the Employer's Section 125 plan,
Section 401(k) plan and deferred compensation plan.
(j) "Total Disability" means the inability of Executive to perform his
material and substantial duties hereunder by reason of mental or
physical illness, injury or disease which is expected to result in
death or be of indefinite duration. The Compensation Committee of the
Board of Directors shall determine in good faith whether the
Executive has suffered Total Disability.
(k) "Total Indirect Compensation" means the sum of (i) the benefits
described in (A) or (B) herein, whichever is larger and (ii) the
Employer Contribution, reimbursement or payment which would have been
made for the calendar year of termination to fund the Benefits
described on Exhibit B. Each qualified and non-qualified plan and
program taken into account under (A) or (B) herein and enumerated
under Schedule B shall be determined separately.
(A) is the sum of the highest benefits accrued, contributions paid
or an equivalent value attributable thereof during the three (3)
12-month periods preceding the Date of Termination, and (B) is an
amount that, in the event the plan or program specifies a
contribution amount, percentage, grant or vesting schedule, equals
such contribution or percentage, determined as if Executive had
continued in employment for the period specified in Section
4(e)(ii) or Section 5(f)(ii)(B), as applicable, and using Total
Direct Compensation as the base to which such contribution or
percentage shall be applied.
(l) "Voluntary Resignation" means a termination of this Agreement by
Executive on account of retirement or other employee-initiated
termination which does not constitute a Constructive Termination or
Good Reason Resignation.
20
(m) "Voting Shares" means at any time the then-outstanding securities
entitled to vote generally in the election of directors of the
Employer.
IN WITNESS WHEREOF, Employer and Executive have each executed and delivered
this Agreement, as of the date first shown above.
EMPLOYER:
CHOICEPOINT INC.
By: /s/ Kenneth G. Langone
Name: Kenneth G. Langone
Title:Chairman, Compensation Committee
EXECUTIVE:
/s/ Derek V. Smith
21
EXHIBIT A
DUTIES AND RESPONSIBILITIES OF THE EXECUTIVE
TITLE: Chairman and Chief Executive Officer
DUTIES:
Derek V. Smith ("Executive") shall be responsible for the overall management of
ChoicePoint Inc. ("Company"), as provided in the Company's By-Laws and as
particularized below, in his capacity as Chairman and Chief Executive Officer.
The duties set forth below may be modified by Employer in accordance with the
terms of this Employment Agreement, dated April 25, 2002, between Employer and
Executive.
Executive shall report to and be a member of the Board of Directors of the
Company. The primary duties of the Executive are:
1. Preside at meeting of the Board of Directors and the Executive Committee
and insure a corporate governance structure that maintains the Board's
independence and insures members of the Board are diverse and productive.
2. Establishing and maintaining a statement of ChoicePoint's vision, mission
and strategic principles and maintaining an effective system of
communicating them throughout the Company.
3. Insuring that strategic vision and adequate plans for the future
development and growth of the Company are prepared. Participating in the
preparation of such plans, periodically presenting such plans to the Board
of Directors for its general review and approval, as prescribed by Company
policy and the By-Laws.
4. Developing the basic objectives, policies, and operating plans for the
Company, periodically submitting such objectives, policies, and plans to
the Board of Directors for its general review and approval, as prescribed
by Company policy and the By-Laws.
5. At specified intervals, causing proposed operating and capital expenditure
budgets to be reviewed and approved by the Board of Directors.
6. Insuring the adequacy and soundness of the Company's financial structure,
reviewing projections of the Company's working capital requirements,
causing negotiations or otherwise arranging for outside financing as may be
indicated.
7. Developing an investor relations strategy to insure adequate access to
public markets, compliance with security regulations and trading liquidity
for the Company's shareholders.
22
8. Planning and directing strategies for identifying, investigating and
negotiating mergers, joint ventures, acquisition of businesses, or the sale
of the Company's assets pursuant to Company policy and the By-Laws.
9. Establishing and maintaining executive level customer account relationships
for the benefit of the Company and utilizing the Board of Directors to
strategically develop existing and potential customer relationships.
10. Insuring that corporate policies are uniformly developed and properly
administered and interpreted by the Company's officers and employees.
23
EXHIBIT B
COMPENSATION, BENEFITS AND SEVERANCE
Executive: Derek V. Smith Title: Chairman and CEO
Effective Date of Exhibit B: April 25, 2002
SECTION 3. COMPENSATION AND BENEFITS.
In addition to the plans, programs or arrangements established from time to time
for other similarly situated employees, Executive shall also be entitled,
pursuant to Section 3 of the Agreement, to the compensation, benefits and
perquisites set forth herein.
Section 3(c): Annual Incentive Program.
Executive shall be entitled to participate in the ChoicePoint Inc.
Executive Incentive Plan, and pursuant to the terms of such plan, be
entitled to an annual cash bonus as a percentage of Base Salary
determined by the achievement of certain performance measurements
specified in the plan. This incentive level shall continue each
calendar year until adjusted by the Compensation Committee of the
Board.
2002 AWARD
Level of Achievement % of Base Salary
- -------------------- ----------------
Target 100%
Maximum 200%
Greater than maximum at the discretion of Board of Directors
Transformational Priorities -50% to 100%
Section 3(d): Omnibus Plan.
Executive shall be entitled to participate in the ChoicePoint Inc. 1997
Omnibus Stock Incentive Plan and receive grants under such plan as may
be determined by the Compensation Committee from time to time in its
sole discretion and in accordance with the terms of the plan.
1997 Omnibus Plan Grants
As of the Effective Date of the Agreement, Executive's 2002
total compensation is based on various option and restricted
stock awards made under the Omnibus
24
Plan with a target value of $2,500,000, assuming performance
measurements are achieved at target levels.
Section 3(e): Non-Qualified Plan.
Executive shall be entitled to participate in the ChoicePoint Inc.
Deferred Compensation Plan for management employees ("Deferred
Compensation Plan") pursuant to the terms of such plan. Executive shall
be entitled to a SERP contribution equal to 35% of "Compensation" as
that term is defined under such plan.
Section 3(f): Benefits
Executive shall be entitled to participate in Employer's benefit
programs for similarly situated salaried employees pursuant to the
terms of such programs, including, without limitation, medical, dental,
life insurance, long-term disability insurance, flexible spending
account arrangements and the Employer's flexible credit plan. Pursuant
to the terms of the Company's Executive Fringe Benefit Policy,
Executive shall be entitled to the following fringe benefits and
perquisites, provided at Employer's expense:
- -------------------------------------------------------------------------------------------------------------
Benefit Amount Duration (1)
- -------------------------------------------------------------------------------------------------------------
Executive Loan None N/A
- -------------------------------------------------------------------------------------------------------------
Vacation Employer policy, Annually
subject to minimum of 5 weeks
- -------------------------------------------------------------------------------------------------------------
Financial Planning/ Maximum amount under proxy Annually for Term of Agreement,
Tax Preparation disclosure rules. including year following year of
death
- -------------------------------------------------------------------------------------------------------------
Executive Physical $1,000 Annually
- -------------------------------------------------------------------------------------------------------------
Personal Umbrella $10,000,000 Term of Agreement
Insurance Policy
- -------------------------------------------------------------------------------------------------------------
Club Dues Two Golf Clubs and One Luncheon Club Term of Agreement
- -------------------------------------------------------------------------------------------------------------
Life Insurance $5,000,000 Term of Agreement
- -------------------------------------------------------------------------------------------------------------
Short-Term 100% of Base Salary Earlier of 6 months or end of
Disability Insurance Total Disability
- -------------------------------------------------------------------------------------------------------------
Long-Term Disability 60% of Total Earlier of age 65 or end of
Direct Compensation Total Disability
- -------------------------------------------------------------------------------------------------------------
Corporate Aircraft Required for business and personal Term of Agreement
travel
- -------------------------------------------------------------------------------------------------------------
25
(1) In each case where the benefit is intended to be provided for the Term of
the Agreement, "Term" shall include the Initial Term and any Renewal Term.
SECTION 10. DEFINITIONS.
Section 10(k): "Total Indirect Compensation"
Subparagraph (k) is determined by taking into account the following
benefits:
a) Matching and profit sharing contributions under the
ChoicePoint Inc. 401(k) Profit Sharing Plan;
b) Profit sharing contributions under the Choice Point Inc.
Transition Benefit Plan;
c) Excess contributions (made as a result of any limitation(s)
on ChoicePoint's qualified plan benefits) and SERP
contributions under the ChoicePoint Inc. Deferred
Compensation Plan.
26
EXHIBIT C
GENERAL RELEASE
THIS GENERAL RELEASE ("Release") is entered into on the date(s) signed below by
and between ChoicePoint Inc. or a subsidiary of ChoicePoint Inc. ("employer"),
a Georgia Corporation, and Derek V. Smith ("Executive").
RECITALS
A. Employer and Executive have entered into an Employment and
Compensation Agreement ("the Agreement").
B. Section 4 (e) of the Agreement provides that Executive is eligible
for severance benefits only if, among other conditions, Executive
executes and delivers the Release to Employer within 30 days after
termination of employment, and the Release becomes effective and
irrevocable.
C. Executive has terminated employment with Employer under one of the
circumstances set forth in Section 4 of the Agreement which otherwise
entitles Executive to receive benefits ("Severance Benefits") under
the Agreement.
D. Executive desires to qualify for benefits offered under the
Agreement by executing the Release.
E. In consideration of the mutual promises contained herein, Employer
and Executive agree as follows:
1. Consideration. In consideration for Executive's agreement
to release all claims described in paragraph 2 below,
Executive will receive the Severance Benefits specified in
the Agreement. Executive acknowledges that, but for
execution of this Release, Executive would not be entitled
to receive Severance Benefits. The amount, timing and form
of payment of Severance Benefits shall be determined
pursuant to the terms of the Agreement. This Release will
continue in force and effect even if some portion of the
Severance Benefits provided under the Agreement is returned
to Employer as a result of Executive's reemployment in any
salaried capacity by Employer or any of its affiliates.
2. Release. As consideration for the Severance Benefits
extended to Executive under the terms of the Agreement and
this Release, benefits to which Executive acknowledges that
Executive would not otherwise be entitled, Executive agrees
for Executive, Executive's heirs, executors,
administrators, successors and assigns to forever release
and discharge Employer and its subsidiaries, related
companies, successors and assigns, officers, directors,
agents, executives, and former executives from any and all
claims, debts, promises, agreements, demands, causes of
actions, losses and expenses of every nature whatsoever
known or unknown, suspected or unsuspected, filed or
unfiled, arising prior to the Acceptance Date of this
Release, or arising out of or in connection with
Executive's employment by and of Employer and any affiliate
of Employer. This total release includes, but is not
limited to, breach of contract (express or implied)
including breach of the implied covenant of good faith and
fair dealing; intentional infliction of emotional harm;
wrongful discharge; violation of public policy; defamation;
27
invasion of privacy, impairment of economic opportunity;
negligent infliction of emotional distress; or any other
tort; any claims for punitive, compensatory, and
retaliatory discharge damages, back or front pay claims and
fringe benefits; attorney's fees; the Civil Rights Act of
1866, 42 U.S.C. section 1981, as amended; Title VII of the
Civil Rights Act of 1964, 42 U.S.C. section 2000(e) et
seq., as amended; the Age Discrimination in Employment Act
of 1967, 29 U.S.C. section 621 et seq., as amended; the
Rehabilitation Act of 1973, 29 U.S.C. section 701, et seq.,
as amended; the Older Workers' Benefit Protection Act, 42
U.S.C. section 621 et seq., the Americans with Disabilities
Act of 1990, 42 U.S.C. section 12101 et seq., as amended;
the False Claims Act, 31 U.S.C. section 3729, et seq., as
amended; or any other federal, State, or municipal statute
or ordinance or common law claim relating to discrimination
in employment or otherwise regulating the employment
relationship, or regulating the health or safety of the
work place. This Release does not extend to unpaid accrued
vacation available, vested pension benefits (including,
without limitation, benefits under Employer's qualified
retirement and non-qualified deferred compensation plans)
unemployment compensation claims, or workers' compensation
claims.
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor."
3. No Pending or Future Lawsuits. Executive represents that
Executive has no lawsuits, claims or actions pending in
Executive's name, or on behalf of any other person or
entity, against Employer or any other person or entity
referred to herein. Executive also represents that
Executive does not intend to bring any new or different
claims on Executive's own behalf or on behalf of any other
person or entity against Employer and/or its subsidiaries,
related companies, successors and assigns, officers,
directors, agents, executives and former executives.
Moreover, Executive hereby promises, warrants, represents
and covenants that Executive will file no claim, lawsuit,
or other action on Executive's or any other person or
entity's behalf against Employer and/or any other person or
entity referred to herein based on any actions taken,
circumstances, consequences, or conduct occurring during
Executive's employment by and leaving of Employer and/or
any affiliate of Employer. Executive understands that the
consideration set forth in this Release constitutes the
sole sums Executive can recover from Employer and/or any
other person or entity referred to herein for any
litigation arising from actions taken, circumstances,
consequences, and/or conduct that occurred during
Executive's employment by and/or leaving of Employer and/or
any affiliate of Employer. Executive agrees that Executive
will not seek or apply for reemployment, employment, or
independent contractor status with Employer, other than
upon the request of Employer.
4. Covenant Not to Sue. Executive agrees that Executive will
not file any action, or Suit contesting the legality of the
ending of Executive's employment or the validity of this
Release or attempting to negate, modify, or reform this
Release. Executive warrants and represents that Executive
has not assigned or in any way conveyed, transferred or
encumbered all or any portion of the claims or rights
covered by this Release.
5. Enforcement of Agreement The parties hereto agree that
each provision of this Release is a
28
material provision and that failure of any party to perform
any one provision hereof shall be the basis for voiding the
entire Release at the option of the other party, or for
pursuing an action at law for such breach. Any party may
waive or excuse the failure of any other party to perform
any provision of this Release, provided, however, that any
such waiver shall not preclude the enforcement of this
Release upon any subsequent breach, whether or not similar
in character, to any waived breach. Upon any breach by
Executive, Employer may cease any future payments. The
parties further agree that in the event that suit is
instituted to enforce any of the rights of the parties to
this Release, the prevailing party in such litigation shall
be entitled, as additional damages, to reasonably incurred
attorneys' fees and costs incurred in the enforcement of
this Release.
6. Effective Date of Release. Executive is entitled to review
and consider this Release for twenty-one (21) calendar days
following the date of receipt of the Release (the "Receipt
Date") before signing and returning this Release to
Employer. If Executive does not accept the terms of this
Release in writing and deliver the executed Release to
Employer within twenty-one (21) days following the Receipt
Date, no Severance Benefits will be payable to the
Executive under the Agreement. For a period of seven (7)
calendar days following the date of Executive's execution
of this Release (the "Acceptance Date"), Executive may
revoke this Release ("Revocation Period"). Executive may
revoke this Release only by giving Employer formal, written
notice of Executive's revocation of this Release to the
name and address set forth in paragraph (c) of Section 12
of this Release, to be received by Employer by the close of
business on the seventh (7th) day following Executive's
execution of this Release (or fifteen (15) days if
Executive is subject to the laws of the state of
Minnesota). This Release shall not become effective in any
respect until the Revocation Period has expired without
notice of revocation. In the absence of Executive's
revocation of this Release, the eighth (8th) day, or the
fifteenth (15th) day if subject to Minnesota law, after
Executive's execution of this Release shall be the
"Effective Date" of this Release, at which time the rights
of all parties under this Release become fully enforceable.
7. Performance of Release. Each of the parties signing this
Release warrants and represents that he/she/it shall
execute and deliver any and all instruments, agreements,
documents or other writings, and shall perform all other
acts deemed to be necessary to effect the terms and
purposes of this Release.
8. Other Releases. This Release constitutes a single,
integrated, written contract expressing the entire
understanding between the parties with respect to the
subject matter hereof. No covenants, agreements,
representations or warranties of any kind whatsoever,
whether oral, written or implied, have been made by any
party hereto, except as specifically set forth in this
Release. All prior discussions, agreements, understandings
and negotiations have been and are merged and integrated
into, and are superseded by, this Release with respect to
the subject matter hereof. However, the provision of any
written agreements between Employer and the Executive which
by their terms continue beyond the ending of employment,
shall continue in full force and effect and shall not be
affected by the terms of this Release.
9. Modification. No cancellation, modification, amendment,
deletion, addition, or other changes in this Release or any
provision hereof or waiver of any right herein provided
shall be
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effective for any purpose unless specifically set forth in
a written agreement signed by both Executive and an
authorized representative of Employer.
10. Construction and Severability. In the event that any
provision of this Release shall be held to be void,
voidable, or unenforceable, the remaining portions hereof
shall remain in full force and effect. The parties agree
and intend that no provision of this Release should be
considered in a legal or agency proceeding to be void,
voidable or unenforceable if it can be interpreted or
modified to read in a way that is legal and enforceable.
11. Acknowledgment: Executive warrants and represents
to Employer as follows:
(a) Executive has had ample time to review all of the
provisions of this Release and fully understands it
and the choices with respect to advisability of
making the Release provided herein.
(b) Executive has been encouraged by Employer to review
all of the provisions of this Release with
independent legal counsel and other advisors, and has
had the opportunity to pursue such a review.
(c) Executive acknowledges that Executive has entered
into this Release by Executive's free will and choice
without any compulsion, duress, or undue influence
from anyone.
(d) Executive does not have any actions pending against
Employer and/or its subsidiaries, related companies,
successors and assigns, officers, directors, agents,
Executives and former Executives, that address claims
that are released under the terms of this Release,
and that no such claims will be filed during the
Revocation Period of this Release without the formal
notification of Executive's revocation of this
Release.
(e) Executive understands that if Executive is
re-employed by Employer, any unpaid Severance
Benefits will not be paid. If Severance Benefits are
paid in a lump sum and Executive is rehired,
Executive must repay the portion of the Severance
Benefits attributable to the period of time after his
reemployment date. If Executive is rehired at a lower
base salary than in effect immediately prior to
commencement of the severance period, the difference
between the Severance Benefits attributable to base
salary and the lower base salary will continue to be
paid to Executive through the severance period.
(f) Executive understands that if Executive has a loan
from Employer, is in possession of Employer property,
or is otherwise indebted to Employer, no Severance
Benefits will be paid until arrangements have been
made regarding these obligations. If satisfactory
arrangements are not made, such obligations to
Employer will be deducted from Executive's Severance
Benefits.
12. Notice.
(a) This Release, and any revocation of this Release or
other required communication, shall be deemed to be
delivered to and received by Employer at the address
set forth in
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paragraph (b) below on the date postmarked if it is
sent by U.S. first class, registered or certified
mail, return receipt requested, postage prepaid.
Executive may send this Release to the address set
forth in paragraph (b) below using any other means
(including personal delivery, overnight delivery
service, expedited courier, messenger, or facsimile),
but the Release will be deemed to have been received
by Employer only when it actually is received by
Employer.
(b) The Release, revocation of this Release and any other
communication, which is required or permitted to be
delivered to Employer hereunder, shall be addressed
as follows:
ChoicePoint Inc.
1000 Alderman Drive
Alpharetta, Georgia 30005
Attention: Insurance and Benefits Department
Facsimile number (770) 619-8784
or to such other address as Employer may have
specified in a notice duly given to the Executive.
PLEASE READ AND CONSIDER THIS AGREEMENT CAREFULLY BEFORE EXECUTING. THIS
SETTLEMENT AGREEMENT AND RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.
The undersigned further states he/she has carefully read this Release, knows and
understands its contents, and that he/she executes it as their own free act and
deed.
CHOICEPOINT INC.
By:
-------------------------------
(Signature)
Name:
-----------------------------
(Print)
Date of ChoicePoint Signature:
----------------
Receipt Date:
---------------------------------
(Date of actual delivery if by hand or five
days after mailing)
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EXECUTIVE
By:
-----------------------------------------------
(Signature)
Acceptance Date:
----------------------------------
(Date of execution by Executive)
Name: Derek V. Smith
---------------------------------------------
(Print)
Address:
------------------------------------------
Social Security Number:
---------------------------
NOTICE TO EXECUTIVE: YOU MUST RETURN THE ENTIRE GENERAL RELEASE TO THE ABOVE
ADDRESS -- IF YOU RETURN ONLY THIS PAGE, YOUR SEVERANCE BENEFITS CANNOT BE
PROCESSED.
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