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EXHIBIT 10.21
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into as of the ____ day of __________,
1998 by and between ABR INFORMATION SERVICES, INC., a Florida corporation (the
"Company"), and _____________________________ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company and/or a subsidiary of
the Company (the "Employer") in a key executive capacity and the Executive's
services are valuable to the conduct of the business of the Company;
WHEREAS, the Executive possesses intimate knowledge of the business and
affairs of the Company and has acquired certain confidential information and
data with respect to the Company;
WHEREAS, the Company desires to ensure, insofar as possible, that it will
continue to have the benefit of the Executive's services and to protect its
confidential information and goodwill;
WHEREAS, the Company recognizes that circumstances may arise in which a
change in control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty about the Executive's future employment with the
Employer without regard to the Executive's competence or past contributions,
which uncertainty may result in the loss of valuable services of the Executive
to the detriment of the Company and its shareholders, and the Company and the
Executive wish to provide reasonable security to the Executive against changes
in the Executive's relationship with the Company in the event of any such
change in control;
WHEREAS, the Company and the Executive are desirous that any proposal for
a change in control or acquisition of the Company will be considered by the
Executive objectively and with reference only to the best interests of the
Company and its shareholders; and
WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which
could result from any such change in control or acquisition.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto mutually
covenant and agree as follows:
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1. DEFINITIONS.
(a) Act. For purposes of this Agreement, the term "ACT" means the
Securities Exchange Act of 1934, as amended.
(b) Affiliate and Associate. For purposes of this Agreement, the
terms "AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations of the Act.
(c) Beneficial Owner. For purposes of this Agreement, a Person shall
be deemed to be the "BENEFICIAL OWNER" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (A) securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase, or (B) securities issuable upon exercise of any
rights issued pursuant to the terms of a shareholder rights agreement at
any time before the issuance of such securities;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Act), including pursuant to
any agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if the
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations under the Act, and (B) is not also
then reportable on a Schedule 13D or Schedule 13G under the Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Section 1(c) (ii) above) or disposing of
any voting securities of the Company.
(d) Cause. For purposes of this Agreement, "CAUSE" for termination by
the Company of the Executive's employment in connection with a Change of
Control of the Company shall, for purposes of this Agreement, be limited to (i)
the engaging by the Executive
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in intentional conduct not taken in good faith which has caused demonstrable
and serious financial injury to the Company; (ii) conviction of a felony (as
evidenced by binding and final judgment, order or decree of a court of
competent jurisdiction, in effect after exhaustion of all rights of appeal);
and (iii) continuing willful and unreasonable refusal by the Executive to
perform the Executive's duties or responsibilities (unless such duties or
responsibilities are significantly changed without the Executive's consent).
(e) Change in Control of the Company. For purposes of this Agreement,
a "CHANGE IN CONTROL OF THE COMPANY" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Act. Without limiting the inclusiveness
of the definition in the preceding sentence, a Change in Control of the Company
shall be deemed to have occurred if:
(i) any Person (other than any employee benefit plan of the
Company or of any subsidiary of the Company, any Person organized,
appointed or established pursuant to the terms of any such benefit plan
or any trustee, administrator or fiduciary of such a plan) is or becomes
the Beneficial Owner of securities of the Company representing at least
50% of the combined voting power of the Company's then outstanding
securities;
(ii) one-half or more of the members of the Board are not
Continuing Directors;
(iii) there shall be consummated (A) any merger of the Company or
share exchange involving the Company whether or not the Company is the
surviving corporation and or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property,
other than a merger or share exchange of the Company in which the holders
of the Company's Common Stock immediately prior to the merger would
receive at least 50% of the voting power of the common stock of the
surviving corporation immediately after the merger or share exchange, or
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of the Company; or
(iv) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.
(f) Code. For purposes of this Agreement, the term "CODE" means the
Internal Revenue Code of 1986, including any amendments thereto or successor
tax codes thereof.
(g) Contining Director. For purposes of this Agreement, the term
"CONTINUING DIRECTOR" means any member of the Board of Directors of the Company
(the "BOARD") who was a member of the Board on the date hereof, and any
successor of a Continuing Director who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on the Board.
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(h) Covered Termination. Subject to Section 2(b) hereof, for purposes
of this Agreement, the term "COVERED TERMINATION" means any termination of the
Executive's employment where the Termination Date is any date prior to the end
of the Employment Period.
(i) Employment Period. For purposes of this Agreement, the term
"EMPLOYMENT PERIOD" means a period commencing on the date of a Change in
Control of the Company, and ending at 11:59 p.m. Eastern Time on the earlier of
the third anniversary of such date or the Executive's Normal Retirement Date.
(j) Good Reason. For purposes of this Agreement, the Executive shall
have a "GOOD REASON" for termination of employment with the Company or any
subsidiary of the Company in connection with a Change in Control of the Company
in the event of:
(i) any material breach of this Agreement by the Company,
including specifically any breach by the Company of its agreements
contained in Sections 4, 5 or 6 hereof;
(ii) the removal of the Executive from, or any failure to reelect
or reappoint the Executive to, any of the positions held with the Company
or the Employer on the date of the Change in Control of the Company or
any other positions with the Company or the Employer to which the
Executive shall thereafter be elected, appointed or assigned, except in
the event that such removal or failure to reelect or reappoint relates to
the termination by the Company of the Executive's employment for Cause or
by reason of disability pursuant to Section 12 hereof;
(iii) a significant adverse change, without the Executive's
written consent, in the Executive's working conditions or status with the
Company or the Employer from such working conditions or status in effect
immediately prior to the Change in Control of the Company, including but
not limited to (A) a significant change in the nature or scope of the
Executive's authority, powers, functions, duties or responsibilities, or
(B) a significant reduction in the level of support services, staff,
secretarial and other assistance, office space and accoutrements; or
(iv) failure by the Company to enter into the Successor Agreement
referred to in Section 17(a) hereof and as provided therein.
(k) Normal Retirement Date. For purposes of this Agreement, the term
"NORMAL RETIREMENT DATE" means the last day in the Company's fiscal year in
which the Executive attains the age of 65.
(l) Person. For purposes of this Agreement, the term "PERSON" shall
mean any individual, firm, partnership, corporation, limited liability company,
or other entity, including any successor (by merger or otherwise) of such
entity, or a group of any of the foregoing acting in concert.
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(m) Termination Date. For purposes of this Agreement, except as
otherwise provided in Section 10(b) and Section 17(a) hereof, the term
"TERMINATION DATE" means: (i) if the Executive's employment is terminated by
the Executive's death, the date of death; (ii) if the Executive's employment is
terminated by reason of voluntary early retirement, as agreed in writing by the
Company and the Executive, the date of such early retirement which is set forth
in such written agreement; (iii) if the Executive's employment is terminated
for purposes of this Agreement by reason of disability pursuant to Section 12
hereof, the earlier of thirty (30) days after the Notice of Termination (as
provided in Section 13 hereof) is given or one day prior to the end of the
Employment Period; (iv) if the Executive's employment is terminated by the
Executive voluntarily (other than for Good Reason), the date the Notice of
Termination is given; and (v) if the Executive's employment is terminated by
the Company (other than by reason of disability pursuant to Section 12 hereof)
or by the Executive for Good Reason, the earlier of thirty (30) days after the
Notice of Termination is given or one day prior to the end of the Employment
Period. Notwithstanding the foregoing:
(i) if the Executive's employment is terminated by the Company
for Cause pursuant to Section 1(d)(iii) of this Agreement, and if the
Executive has cured the conduct constituting such Cause as described by
the Company in its Notice of Termination within thirty (30) days after
the Notice of Termination, then the Executive's employment hereunder
shall continue as if the Company had not delivered its Notice of
Termination;
(ii) if the Executive shall give the Company a Notice of
Termination for Good Reason and the Company notifies the Executive that a
dispute exists concerning the termination within the fifteen (15) day
period following the date of the Notice of Termination is given, then the
Executive may elect to continue the Executive's employment pending the
resolution of such dispute, and the Termination Date shall be determined
under this Section 1(m)(vii). If the Executive so elects and it is
thereafter determined that Good Reason did exist, the Termination Date
shall be the earliest of (A) the date on which the dispute is finally
determined, either (1) by mutual written agreement of the Executive and
the Company or (2) in accordance with Section 22 hereof, (B) the date of
the Executive's death, or (C) one day prior to the end of the Employment
Period. If the Executive so elects and it is thereafter determined that
Good Reason did not exist, then the employment of the Executive hereunder
shall continue after such determination as if the Executive had not
delivered the Notice of Termination asserting Good Reason and there shall
be no Termination Date arising out of such Notice of Termination. In
either case, this Agreement shall continue, until the Termination Date,
if any, as if the Executive had not delivered the Notice of Termination
except that, if it is finally determined that Good Reason did exist, the
Executive shall in no case be denied the benefits described in Sections
8(b) and 9 hereof (including a Termination Payment as defined in Section
9(b)) based on events occurring after the Executive delivered the Notice
of Termination;
(iii) if an opinion is required to be delivered pursuant to
Section 9(b)(ii) hereof and such opinion shall not have been delivered,
the Termination Date
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shall be the earlier of the date on which such opinion is delivered or
one day prior to the end of the Employment Period; or
(iv) except as provided in Section 1(m)(vii) above, if the party
receiving the Notice of Termination notifies the other party that a
dispute exists concerning the termination within the appropriate period
following receipt thereof and it is finally determined that the reason
asserted in such Notice of Termination did not exist or did not support
the basis asserted for the giving of such Notice of Termination, then (A)
if such Notice of Termination was delivered by the Executive, the
Executive will be deemed to have voluntarily terminated the Executive's
employment and the Termination Date shall be the earlier of the date
fifteen (15) days after the Notice of Termination is given or one day
prior to the end of the Employment Period, and (B) if such Notice of
Termination was delivered by the Company, the Company will be deemed to
have terminated the Executive other than by reason of death, disability
or Cause.
2. TERMINATION OR CANCELLATION PRIOR TO CHANGE IN CONTROL.
(a) Subject to Section 2(b) hereof and the terms of any written
agreement between either the Company or the Employer and the Executive with
respect to the employment of the Executive now or hereafter in effect, the
Company (and the Employer) and the Executive shall each retain the right to
terminate the employment of the Executive at any time prior to a Change in
Control of the Company. Subject to Section 2(b) hereof, in the event the
Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and cancelled and of no further
force and effect, and any and all rights and obligations of the parties
hereunder shall cease.
(b) Anything in this Agreement to the contrary notwithstanding, if a
Change in Control of the Company occurs and if the Executive's employment with
the Employer is terminated (other than a termination due to the Executive's
death or as a result of the Executive's disability) during the period of 180
days prior to the date on which the Change in Control of the Company occurs,
and if it is reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of any Person who has taken steps reasonably
calculated to effect a Change in Control of the Company, or (ii) otherwise
arose in connection with or in anticipation of a Change in Control of the
Company, then for all purposes of this Agreement such termination of employment
shall be deemed a "COVERED TERMINATION."
3. EMPLOYMENT PERIOD. If a Change in Control of the Company occurs when
the Executive is employed by the Employer, the Company will, or will cause the
Employer to, continue thereafter to employ the Executive during the Employment
Period, and the Executive will remain in the employ of the Employer in
accordance with and subject to the terms and provisions of this Agreement. Any
termination of the Executive's employment during the Employment Period, whether
by the Company or the Employer, shall be deemed a termination by the Company
for purposes of this Agreement.
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4. DUTIES. During the Employment Period, the Executive shall, in the same
capacities and positions held by the Executive at the time of the Change in
Control of the Company or in such other capacities and positions as may be
agreed to by the Company and the Executive in writing, devote the Executive's
best efforts and all of the Executive's business time, attention and skill to
the business and affairs of the Employer, as such business and affairs now
exist and as they may hereafter be conducted. The services which are to be
performed by the Executive hereunder are to be rendered in the same
metropolitan area in which the Executive was employed at the time of such
Change in Control of the Company, or in such other place or places as shall be
mutually agreed upon in writing by the Executive and the Company from time to
time. Without the Executive's consent, the Executive shall not be required to
be absent from such metropolitan area more than 30 days in any fiscal year of
the Company.
5. COMPENSATION. During the Employment Period, the Executive shall be
compensated as follows:
(a) The Executive shall receive, at reasonable intervals (but not
less often than monthly) and in accordance with such standard policies as may
be in effect immediately prior to the Change in Control of the Company, an
annual base salary in cash equivalent of not less than the aggregate of the
Executive's annual base salary as in effect immediately prior to the Change in
Control of the Company (which base salary shall, unless otherwise agreed in
writing by the Executive, include the current receipt by the Executive of any
amounts which, prior to the Change in Control of the Company, the Executive had
elected to defer, whether such compensation is deferred under Section 401(k) of
the Code or otherwise), plus the dollar amount of any cash bonuses paid by the
Company to the Executive during the preceding fiscal year, subject to
adjustment as hereinafter provided.
(b) The Executive shall receive fringe benefits at least equal in
value to those provided for the Executive immediately prior to the Change in
Control of the Company, and shall be reimbursed, at such intervals and in
accordance with such standard policies as may be in effect immediately prior to
the Change in Control of the Company, for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company, including travel
expenses.
(c) The Executive shall be included, to the extent eligible
thereunder (which eligibility shall not be conditioned on the Executive's
salary grade or on any other requirement which excludes persons of comparable
status to the Executive unless such exclusion was in effect for such plan or an
equivalent plan immediately prior to the Change in Control of the Company), in
any and all plans providing benefits for the Employer's salaried employees in
general, including but not limited to group life insurance, hospitalization,
medical, dental, profit sharing, stock option and stock bonus plans; provided,
that, in no event shall the aggregate level of benefits under such plans in
which the Executive is included be less than the aggregate level of benefits
under plans of the Company of the type referred to in this Section 5(c) in
which the Executive was participating immediately prior to the Change in
Control of the Company.
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(d) The Executive shall annually be entitled to not less than the
amount of paid vacation and not fewer than the number of paid holidays to which
the Executive was entitled annually immediately prior to the Change in Control
of the Company or such greater amount of paid vacation and number of paid
holidays as may be made available annually to other executives of the Company
of comparable status and position to the Executive.
(e) The Executive shall be included in all plans providing additional
benefits to executives of the Company of comparable status and position to the
Executive, including but not limited to deferred compensation, split-dollar
life insurance, supplemental retirement, stock option, stock appreciation,
stock bonus and similar or comparable plans; provided, that, in no event shall
the aggregate level of benefits under such plans be less than the aggregate
level of benefits under plans of the Company of the type referred to in this
Section 5(e) in which the Executive was participating immediately prior to the
Change in Control of the Company; and provided, further, that the Company's
obligation to include the Executive in bonus or incentive compensation plans
shall be determined by Section 5(f) hereof.
(f) To assure that the Executive will have an opportunity to earn
incentive compensation after a Change in Control of the Company, the Executive
shall be included in a bonus plan of the Company which shall satisfy the
standards described below (such plan, the "BONUS PLAN"). Bonuses under the
Bonus Plan shall be payable with respect to achieving such financial or other
goals reasonably related to the business of the Company and the Employer as the
Company shall establish (the "GOALS"), all of which Goals shall be attainable,
prior to the end of the Employment Period, with approximately the same degree
of probability as the goals under the Company's bonus plan or plans as in
effect immediately prior to the Change in Control of the Company (whether one
or more, the "COMPANY BONUS PLAN") and in view of the Company's existing and
projected financial and business circumstances applicable at the time. The
amount of the bonus (the "BONUS AMOUNT") that the Executive is eligible to earn
under the Bonus Plan shall be no less than the amount of the Executive's
maximum award provided in such Bonus Plan (such bonus amount herein referred to
as the "Targeted Bonus"), and in the event the Goals are not achieved such that
the entire Targeted Bonus is not payable, the Bonus Plan shall provide for a
payment of a Bonus Amount equal to a portion of the Targeted Bonus reasonably
related to that portion of the Goals which were achieved. Payment of the Bonus
Amount shall not be affected by any circumstance occurring subsequent to the
end of the Employment Period, including termination of the Executive's
employment.
6. ANNUAL COMPENSATION ADJUSTMENTS. During the Employment Period, the
Board (or an appropriate committee thereof) will consider and appraise, at
least annually, the contributions of the Executive to the Company, and in
accordance with the Company's practice prior to the Change in Control of the
Company, due consideration shall be given to the upward adjustment of the
Executive's base compensation rate, at least annually, (i) commensurate with
increases generally given to other executives of the Company of comparable
status and position to the Executive, and (ii) as the scope of the Company's
operations or the Executive's duties expand.
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7. TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If there is a Covered
Termination for Cause or due to the Executive's termination of the Executive's
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 13 hereof), then the Executive shall be
entitled to receive only Accrued Benefits pursuant to Section 9(a) hereof.
8. TERMINATION GIVING RISE TO A TERMINATION PAYMENT.
(a) If there is a Covered Termination by the Executive for Good
Reason, or by the Company other than by reason of (i) death, (ii) disability
pursuant to Section 12 hereof, or (iii) Cause (any such terminations to be
subject to the procedures set forth in Section 13 hereof), then the Executive
shall be entitled to receive, and the Company shall promptly pay, Accrued
Benefits and, in lieu of further base salary for periods following the
Termination Date, as liquidated damages and additional severance pay and in
consideration of the covenant of the Executive set forth in Section 14(a)
hereof, the Termination Payment pursuant to Section 9(b) hereof.
(b) If there is a Covered Termination and the Executive is entitled
to Accrued Benefits and the Termination Payment, then the Executive shall be
entitled to the following additional benefits:
(i) The Executive shall receive, at the expense of the Company,
outplacement services, on an individualized basis at a level of service
commensurate with the Executive's status with the Company immediately
prior to the Change in Control of the Company (or, if higher, immediately
prior to the termination of the Executive's employment), provided by a
nationally recognized executive placement firm selected by the Company;
provided that the cost to the Company of such services shall not exceed
30% of the Executive's annual base salary in effect immediately prior to
the Change in Control of the Company.
(ii) Until the earlier of the end of the Employment Period or
such time as the Executive has obtained new employment and is covered by
the same or equivalent life insurance, hospitalization, medical and
dental coverage as was required hereunder with respect to the Executive
immediately prior to the date the Notice of Termination is given, the
Executive shall continue to be covered, at the expense of the Company, in
the same manner that the Executive was covered immediately prior to the
date the Notice of Termination is given.
9. PAYMENTS UPON TERMINATION.
(a) Accrued Benefits. For purposes of this Agreement, the Executive's
"ACCRUED BENEFITS" shall include the following amounts, payable as described
herein: (i) all base salary for the time period ending with the Termination
Date; (ii) reimbursement for any and all reasonable and necessary expenses
incurred by the Executive on behalf of the Company for the time period ending
with the Termination Date; (iii) any and all compensation or other cash earned
through the Termination Date and deferred at the election of the Executive or
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pursuant to any deferred compensation plan then in effect; (iv) a lump sum
payment of the bonus or incentive compensation otherwise payable to the
Executive with respect to the year in which termination occurs under any bonus
or incentive compensation plan in which the Executive is a participant; and (v)
all other payments and benefits to which the Executive (or in the event of the
Executive's death, the Executive's surviving spouse or other beneficiary) may
be entitled as compensatory fringe benefits or under the terms of any benefit
plan of the Company, excluding severance payments under any Company severance
policy, practice or agreement in effect immediately prior to the Change in
Control of the Company. Payment of Accrued Benefits shall be made promptly in
accordance with the Company's prevailing practice with respect to Subsections
(i) and (ii) above or, with respect to Subsections (iii), (iv) and (v) above,
pursuant to the terms of the benefit plan or practice establishing such
benefits.
(b) Termination Payment.
(i) Subject to the limits set forth in Subsection 9(b)(ii)
hereof, for purposes of this Agreement, the "TERMINATION PAYMENT" shall
be an amount equal to (A) the Executive's annual base salary, as in
effect immediately prior to the Change in Control of the Company, as
adjusted upward, from time to time, pursuant to Section 6 hereof, plus
(B) the amount of the average annual bonus award (determined on an
annualized basis for any bonus award paid for a period of less than one
year and excluding any year for which the Executive did not participate
in any bonus plan) paid to the Executive with respect to the three
complete fiscal years preceding the Termination Date (the sum of the
amounts set forth in (A) and (B) hereof shall hereafter be referred to as
"ANNUAL CASH COMPENSATION"), multiplied by (C) the number of years or
fractional portion thereof remaining in the Employment Period determined
as of the Termination Date; provided, however, that such amount shall not
be less than the greater of (i) the amount of the Executive's Annual Cash
Compensation or (ii) the severance benefits to which the Executive would
have been entitled under the Company's severance policies and practices
in effect immediately prior to the Change in Control of the Company. The
Termination Payment shall be paid to the Executive in cash equivalent ten
business days after the Termination Date. Such lump sum payment shall not
be reduced by any present value or similar factor, and the Executive
shall not be required to mitigate the amount of the Termination Payment
by securing other employment or otherwise, nor will such Termination
Payment be reduced by reason of the Executive securing other employment
or for any other reason. The Termination Payment shall be in lieu of, and
acceptance by the Executive of the Termination Payment shall constitute
the Executive's release of any rights of the Executive to, any other
severance payments under any Company severance policy, practice or
agreement. The Company shall bear the cost of up to $25,000 in the
aggregate of fees and expenses of consultants and/or legal, tax or
accounting advisors engaged by the Executive to advise the Executive as
to matters relating to the computation of benefits due and payable under
this Section 9(b).
(ii) Notwithstanding any other provision of this Agreement, if
any portion of the Termination Payment or any other payment under this
Agreement, or
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under any other agreement with or plan of the Company (in the aggregate,
"TOTAL PAYMENTS"), would constitute an "excess parachute payment," then
the Total Payments to be made to the Executive shall be reduced such that
the value of the aggregate Total Payments that the Executive is entitled
to receive shall be One Dollar ($1) less than the maximum amount which
the Executive may receive without becoming subject to the tax imposed by
Section 4999 of the Code (or any successor provision) or which the
Company may pay without loss of deduction under Section 280G(a) of the
Code (or any successor provision). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall have the
meanings assigned to them in Section 280G of the Code (or any successor
provision), and such "parachute payments" shall be valued as provided
therein. Present value for purposes of this Agreement shall be calculated
in accordance with Section 280G(d)(4) of the Code (or any successor
provision). Within forty (40) days following delivery of the Notice of
Termination or notice by the Company to the Executive of its belief that
there is a payment or benefit due the Executive which will result in an
excess parachute payment as defined in Section 280G of the Code (or any
successor provision), the Executive and the Company, at the Company's
expense, shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel selected by the Executive in the
Executive's sole discretion (which may be general outside counsel to the
Company), which opinion sets forth (A) the amount of the Base Period
Income, (B) the amount and present value of Total Payments, and (C) the
amount and present value of any excess parachute payments determined
without regard to the limitations of this Section 9(b)(ii). As used in
this Section 9(b)(ii), the term "BASE PERIOD INCOME" means an amount
equal to the Executive's "annualized includible compensation for the base
period" as defined in Section 280G(d)(l) of the Code (or any successor
provision). For purposes of such opinion, the value of any noncash
benefits or any deferred payment or benefit shall be determined in
accordance with the principles of Sections 280G(d)(3) and (4) of the Code
(or any successor provisions). Such opinion shall be dated as of the
Termination Date and addressed to the Company and the Executive and shall
be binding upon the Company and the Executive. If such opinion determines
that there would be an excess parachute payment, the Termination Payment
hereunder or any other payment or benefit determined by such counsel to
be includible in Total Payments shall be reduced or eliminated as
specified by the Executive in writing delivered to the Company within
thirty (30) days of the Executive's receipt of such opinion or, if the
Executive fails to so notify the Company, then as the Company shall
reasonably determine, so that under the bases of calculations set forth
in such opinion there will be no excess parachute payment. If such legal
counsel so requests in connection with the opinion required by this
Section, the Executive and the Company shall obtain, at the Company's
expense, and the legal counsel may rely on in providing the opinion, the
advice of a firm of recognized executive compensation consultants as to
the reasonableness of any item of compensation to be received by the
Executive. If the provisions of Sections 280G and 4999 of the Code (or
any successor provisions) are repealed without succession, then this
Section 9(b) (ii) shall be of no further force or effect.
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(iii) (A) If, notwithstanding the provisions of Section 9(b)(ii)
above, but subject to paragraph (B) immediately following, it is
ultimately determined by a court or pursuant to a final determination by
the Internal Revenue Service that any portion of Total Payments is
subject to the tax (the "EXCISE TAX") imposed by Section 4999 of the Code
(or any successor provision), the Company shall pay to the Executive an
additional amount (the "GROSS-UP PAYMENT") such that the net amount
retained by the Executive after deduction of any Excise Tax and any
interest charges or penalties in respect of the imposition of such Excise
Tax (but not any federal, state or local income tax) on the Total
Payments, and any federal, state and local income tax and Excise Tax upon
the payment provided for by this Section 9(b)(iii), shall be equal to the
Total Payments. For purposes of determining the amount of the Gross-Up
Payment, the 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 rates of taxation in the state and locality of
the Executive's domicile for income tax purposes on the date the Gross-Up
Payment is made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.
(iii) (B) If legislation is enacted that would require the
Company's shareholders to approve this Agreement, prior to a Change in
Control of the Company, due solely to the provision contained in
paragraph (A) of this Section 9(b)(iii), then
(1) from and after such time as shareholder approval would
be required, until shareholder approval is obtained as required
by such legislation, paragraph (A) shall be of no force and
effect;
(2) the Company and the Executive shall use their best
efforts to consider and agree in writing upon an amendment to
this Section 9(b)(iii) such that, as amended, this Section
9(b)(iii) would provide the Executive with the benefits intended
to be afforded to the Executive by paragraph (A) without
requiring shareholder approval; and
(3) at the reasonable request of the Executive, the Company
shall seek shareholder approval of this Agreement at the next
annual meeting of shareholders of the Company.
10. DEATH.
(a) Except as provided in Section 10(b) hereof, in the event of a Covered
Termination due to the Executive's death, the Executive's estate, heirs and
beneficiaries shall receive all the Executive's Accrued Benefits through the
Termination Date.
(b) In the event the Executive dies after a Notice of Termination is
given (i) by the Company or (ii) by the Executive for Good Reason, the
Executive's estate, heirs and beneficiaries shall be entitled to the benefits
described in Section 10(a) hereof and, subject to the provisions of this
Agreement, to such Termination Payment as the Executive would have
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been entitled to had the Executive lived. For purposes of this Section 10(b),
the Termination Date shall be the earlier of thirty (30) days following the
giving of the Notice of Termination, subject to extension pursuant to Section
1(m) hereof, or one day prior to the end of the Employment Period.
11. RETIREMENT. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that
he is voluntarily choosing to retire early from the Company, the Executive
shall receive Accrued Benefits through the Termination Date; provided, that if
the Executive's employment is terminated by the Executive for Good Reason or by
the Company other than by reason of death, disability or Cause and the
Executive also, in connection with such termination, elects voluntary early
retirement, the Executive shall also be entitled to receive a Termination
Payment pursuant to Section 8(a) hereof.
12. TERMINATION FOR DISABILITY. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or
injury (regardless of whether such illness or injury is job-related), the
Executive shall have been absent from the Executive's duties hereunder on a
full-time basis for a period of six consecutive months and, within thirty (30)
days after the Company notifies the Executive in writing that it intends to
terminate the Executive's employment (which notice shall not constitute the
Notice of Termination contemplated below), the Executive shall not have
returned to the performance of the Executive's duties hereunder on a full-time
basis, the Company may terminate the Executive's employment for purposes of
this Agreement pursuant to a Notice of Termination given in accordance with
Section 13 hereof. If the Executive's employment is terminated on account of
the Executive's disability in accordance with this Section, the Executive shall
receive Accrued Benefits in accordance with Section 9(a) hereof and shall
remain eligible for all benefits provided by any long term disability programs
of the Company in effect at the time of such termination.
13. TERMINATION NOTICE AND PROCEDURE. Any Covered Termination by the
Company or the Executive (other than a termination of the Executive's
employment that is a Covered Termination by virtue of Section 2(b) hereof)
shall be communicated by written Notice of Termination to the Executive, if
such Notice of Termination is given by the Company, and to the Company, if such
Notice of Termination is given by the Executive, all in accordance with the
following procedures and those set forth in Section 23 hereof:
(a) If such termination is for disability, Cause or Good Reason, the
Notice of Termination shall indicate in reasonable detail the facts and
circumstances alleged to provide a basis for such termination.
(b) Any Notice of Termination by the Company shall have been
approved, prior to the giving thereof to the Executive, by a resolution duly
adopted by a majority of the members of the Company's Board of Directors then
in office.
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(c) If the Notice is given by the Executive for Good Reason, the
Executive may cease performing the Executive's duties hereunder on or after the
date fifteen (15) days after the delivery of Notice of Termination and shall in
any event cease employment on the Termination Date. If the Notice of
Termination is given by the Company, then the Executive may cease performing
the Executive's duties hereunder on the date of receipt of the Notice of
Termination, subject to the Executive's rights hereunder.
(d) The Executive shall have thirty (30) days, or such longer period
as the Company may determine to be appropriate, to cure any conduct or act, if
curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement pursuant to Subsection 1(d) (iii)
hereof.
(e) The recipient of any Notice of Termination shall personally
deliver or mail in accordance with Section 23 hereof written notice of any
dispute relating to such Notice of Termination to the party giving such Notice
of Termination within fifteen (15) days after receipt thereof; provided,
however, that if the Executive's conduct or act alleged to provide grounds for
termination by the Company for Cause is curable, then such period shall be
thirty (30) days. After the expiration of such period, the contents of the
Notice of Termination shall become final and not subject to dispute.
14. FURTHER OBLIGATIONS OF THE EXECUTIVE.
(a) Competition. The Executive agrees that, in the event of any
Covered Termination where the Executive is entitled to Accrued Benefits and the
Termination Payment, the Executive shall not, for a period expiring one year
after the Termination Date, without the prior written approval of the Company's
Board of Directors, participate in the management of, be employed by or own any
business enterprise which the principal office of which is located within the
Southeastern United States that engages in substantial competition with the
Company or any of its subsidiaries, where such enterprise's revenues from such
competitive activities amounted to 50% or more of such enterprise's net
revenues and sales for its most recently completed fiscal year; provided,
however, that nothing in this Section 14(a) shall prohibit the Executive from
owning stock or other securities of a competitor of the Company or any of its
subsidiaries amounting to less than five (5) percent of the outstanding capital
stock of such competitor; and provided, further if for any reason the Company
does not pay the Executive the amounts and make available to the Executive the
benefits provided in and required by this Agreement, then the Executive will
have no further obligation to the Company under this Section 14(a).
(b) Confidentiality. During and following the Executive's employment
by the Company, the Executive shall hold in confidence and not directly or
indirectly disclose or use or copy or make lists of any confidential
information or proprietary data of the Company (including that of the
Employer), except to the extent authorized in writing by the Board or required
by any court or administrative agency, other than to an employee of the Company
or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of duties as an executive of
the Company. Confidential
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information shall not include any information known generally to the public or
any information of a type not otherwise considered confidential by persons
engaged in the same business or a business similar to that of the Company. All
records, files, documents and materials, or copies thereof, relating to the
business of the Company which the Executive shall prepare, or use, or come into
contact with, shall be and remain the sole property of the Company and shall be
promptly returned to the Company upon termination of employment with the
Company.
15. Expenses and Interest. If, after a Change in Control of the Company,
(i) a dispute arises with respect to the enforcement of the Executive's rights
under this Agreement, or (ii) any legal or arbitration proceeding shall be
brought to enforce or interpret any provision contained herein or to recover
damages for breach hereof, in either case so long as the Executive is not
acting in bad faith, the Executive shall recover from the Company any
reasonable attorneys' fees and necessary costs and disbursements incurred as a
result of such dispute, legal or arbitration proceeding ("Expenses"), and
prejudgment interest on any money judgment or arbitration award obtained by the
Executive calculated at the prime rate of interest as reported by The Wall
Street Journal from the date that payments to the Executive should have been
made under this Agreement. Within ten (10) days after the Executive's written
request therefor, the Company shall pay to the Executive, or such other person
or entity as the Executive may designate in writing to the Company, the
Executive's Expenses in advance of the final disposition or conclusion of any
such dispute, legal or arbitration proceeding.
16. PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation during and
after the Employment Period to pay the Executive the amounts and to makes the
benefits and other arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, any setoff, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or any other Person.
Except as provided in Section 15 of this Agreement, all amounts payable by the
Company hereunder shall be paid without notice or demand. The Company will not
seek to recover all or any part of any payment made by the Company hereunder
from the Executive, or from whomsoever may be entitled thereto, for any reason
whatsoever.
17. SUCCESSORS.
(a) If the Company sells, assigns or transfers all or substantially
all of its business and assets to any Person or if the Company merges into or
consolidates or otherwise combines (where the Company is not the surviving
entity in such combination) with any Person (any such event, a "SALE OF
BUSINESS"), then the Company shall assign all of its right, title and interest
in this Agreement as of the date of such event to such Person, and the Company
shall cause such Person, by written agreement in form and substance reasonably
satisfactory to the Executive (the "Successor Agreement"), to expressly assume
and agree to perform from and after the date of such assignment all of the
terms, conditions and provisions imposed by this Agreement upon the Company.
Failure of the Company to enter into the Successor Agreement at or prior to the
effective date of such Sale of Business shall be a breach of this Agreement
constituting "Good Reason" hereunder, except that for purposes of implementing
the foregoing, the date upon which such Sale of Business becomes effective
shall be deemed the
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Termination Date. In case of such assignment by the Company and of assumption
and agreement by such Person pursuant to the Successor Agreement, as used in
this Agreement, "COMPANY" shall thereafter mean such Person which executes and
delivers the Successor Agreement provided for in this Section 17(a) or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law, and this Agreement shall inure to the benefit of, and be
enforceable by, such Person. The Executive shall, in the Executive's
discretion, be entitled to proceed against any or all of such Persons, any
Person which theretofore was such a successor to the Company (as defined in the
first paragraph of this Agreement) and the Company (as so defined) in any
action to enforce any rights of the Executive hereunder. Except as provided in
this Section 17(a), this Agreement shall not be assignable by the Company. This
Agreement shall not be terminated by the voluntary or involuntary dissolution
of the Company.
(b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. Any amount
payable to the Executive under this Agreement if the Executive had lived shall
be paid, in the event of the Executive's death, to the Executive's estate,
heirs and representatives; provided, however, that the foregoing shall not be
construed to modify any terms of any benefit plan of the Company or agreement
to which the Executive is a party, as such terms are in effect on the date of
the Change in Control of the Company, that expressly govern benefits under such
plan or agreement in the event of the Executive's death.
18. SEVERABILITY. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared
invalid or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
19. AMENDMENT. This Agreement may not be amended or modified at any time
except by written instrument executed by the Company and the Executive.
20. WITHHOLDING. The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding
or other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be entitled to rely on an
opinion of nationally recognized tax counsel if any question as to the amount
or requirement of any such withholding shall arise.
21. CERTAIN RULES OF CONSTRUCTION. No party shall be considered as being
responsible for the drafting of this Agreement for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of this
Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and
an authorized representative of the Company.
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22. GOVERNING LAW; RESOLUTION OF DISPUTES. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the internal laws of the State of Florida, without reference to conflict or
choice of law principles thereunder. Any dispute arising out of this Agreement
shall, at the Executive's election, be determined by arbitration under the
rules of the American Arbitration Association then in effect (in which case the
Executive and the Company shall be bound by the arbitration award) or by
litigation. Whether the dispute is to be settled by arbitration or litigation,
the venue for the arbitration or litigation shall be Pinellas County, Florida
or, at the Executive's election, if the Executive is no longer residing or
working in the Tampa/St. Petersburg, Florida metropolitan area, in the judicial
district encompassing the city in which the Executive resides; provided, that,
if the Executive is not then residing in the United States, the election of the
Executive with respect to such venue shall be either Pinellas County, Florida
or in the judicial district encompassing that city in the United States among
the thirty cities having the largest population (as determined by the most
recent United States Census data available at the Termination Date) which is
closest to the Executive's residence. The parties consent to personal
jurisdiction in each trial court in the selected venue having subject matter
jurisdiction notwithstanding their residence or situs, and each party
irrevocably consents to service of process in the manner provided hereunder for
the giving of notices.
23. NOTICE. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise provided in this Agreement, shall be deemed given when
actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company,
to ABR Information Services, Inc., Attention: Secretary (or President, if the
Executive is then Secretary), 34125 U.S. Highway 19 North, Palm Harbor, Florida
34684, or if to the Executive, at the address set forth below the Executive's
signature to this Agreement, or to such other address as the party to be
notified shall have theretofore given to the other party in writing.
24. NO WAIVER. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
25. HEADINGS. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ABR INFORMATION SERVICES, INC.
By:
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James E. MacDougald
Chairman of the Board, President
and Chief Executive Officer
THE EXECUTIVE
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Name:
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Address:
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