AMENDED AND RESTATED
TERMINATION BENEFITS AGREEMENT
AMENDED AND RESTATED TERMINATION BENEFITS AGREEMENT made this ____ day of
________________________, effective as of December 30, 1993 (the 'Effective
Date'), by and between RCM TECHNOLOGIES, INC., a Nevada corporation (the
"Company") and ▇▇▇▇ ▇▇▇▇▇ (the "Executive").
RECITALS
A. The Executive has for several year served the Company as a key executive
officer and has helped guide the Company through many problems.
B. The Executive has been successful in converting a loss of $1 million for
the fiscal year ended 10/31/91 into a net profit of $1 million for the fiscal
year ended 10/31/93. He has negotiated a line of credit for the Company with
Mellon Bank on favorable term and has arranged for acquisitions of companies to
strengthen the company's competitive position.
C. The Executive is expected to continue to make a major contribution to
the profitability, growth and financial strength of the Company.
D. The Company considers the continued services of the Executive to be in
the best interest of the Company and its shareholders and desires to assure the
continued service of the Executive on behalf of the Company on an objective and
impartial basis and without distraction or conflict of interest in the event of
an attempt to obtain control of the Company.
E. The Executive is willing to remain in the employ of the Company upon the
understanding that the Company will provide income security upon the terms and
subject to the conditions contained herein if the Executive's employment is
terminated voluntarily for good reason following a change in control of the
Company or involuntarily by the Company without "Good and Sufficient Cause" (as
hereafter defined).
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties agree as follows:
1. Simultaneously with a "Change in Control of the Company", as that term
is defined herein (a "Change in Control"), the term of any Employment Agreement
then in force between the Company and the Executive (the "Employment
Agreement"), without any further action on the part of either party, shall be
deemed to have been extended for a term of five (5) years, commencing with the
date of the Change In Control, on the same terms and conditions as existed
immediately prior to the Change in Control (the "Extended Term").
2. During the Extended Term, the Executive may terminate his employment at
any time for "good reason". As used herein, the term "good reason" shall mean:
(i) A failure by the Company to comply with any material provision of the
Employment Agreement, which failure has not been cured within ten (10) days
after notice of noncompliance has been given by Executive to the Company; (ii)
Without Executive's written consent, the assignment to Executive of any
duties inconsistent with Executive's duties, responsibilities and status
with the Company immediately prior to the change in control;
(iii) Any change in (a) Executive's reporting responsibilities, title or
office in effect immediately prior to the change in control of the Company, or
(b) a change in geographic location of where Executive's position is based in
excess of twenty (20) miles or required travel in excess of Executive's present
business travel schedule;
(iv) Any removal from or any failure to reelect Executive to any positions
held by him immediately prior to the change in control except in connection with
a termination of employment for just cause, disability, death or retirement;
(v) Any reduction by the Company in Executive's annual salary in effect
immediately prior to a change in control or as the same may be increased from
time to time;
(vi) Failure by the Company to continue in effect any bonus, benefit or
compensation plan, life insurance plan, health and accident plan or disability
plan in which Executive is participating at the time of a change in control of
the Company or the taking of any action by the Company which would adversely
effect the Company's participation in or materially reduce Executive's benefits
under any such plan;
(vii) Any purported termination of Executive's employment which is not
effected pursuant to a notice of termination satisfying the requirements of
paragraph 4 hereof; or
(viii) Any change in corporate strategy, direction of the Company's
business, management, operating personnel, composition of the Board of
Directors, competitive posture, or standing in the industry, any one or more of
which in the absolute discretion of Executive render Executive's continued
employment by the Company inconsistent with Executive's employment goals and
objectives.
3. For purposes of this Agreement, a "Change in Control" shall be
determined in the reasonable discretion of Executive in the manner established
at Paragraph 7 hereafter. A Change in Control 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, as in effect on the date hereof, promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
provided that, without limitation, such a Change in Control shall be deemed to
have occurred if:
(a) Any "Person" or "group of Persons" (as such terms are defined
hereafter), except for any employee benefit plan of the Company or any
subsidiary of the Company, or any
entity holding voting securities of the Company for or pursuant to the
terms of any such plan (a "Benefit Plan" or the "Benefit Plans"), is or becomes
the "beneficial owner" (as such term is defined hereafter), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; (b) There
occurs a contested proxy solicitation of the Company's shareholders
that results in the contesting party obtaining the ability to vote
securities representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(c) There occurs a sale, exchange, transfer or other disposition of
substantially all of the assets of the Company to another entity, except to an
entity controlled directly or indirectly by the Company, or a merger,
consolidation or other reorganization of the Company in which the Company is not
the surviving entity, or a plan of liquidation or dissolution of the Company
other than pursuant to bankruptcy or insolvency laws is adopted;
(d) During any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company cease
for any reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's shareholders, of each new director
was approved by a vote of at least two-thirds of the directors (inclusive of
Executive) then still in office who were directors at the beginning of the
period; or
(e) If Executive no longer continues to serve as the Chairman of the
Company's Board of Directors (unless at his own election) during any period in
which Executive remains employed by the Company or within three (3) years
thereafter if Executive's employment was terminated for other than 'good and
sufficient cause', as such term is defined within Executive's Employment
Agreement (hereinafter 'Good and Sufficient Cause').
Notwithstanding the foregoing, a Change in Control shall not be deemed to
have occurred for purposes of this Agreement: (i) if a "Person" acquires or
becomes the beneficial owner of securities representing 20% or more of the
combined voting power of the Company's then outstanding securities pursuant to a
private placement transaction or underwritten public offering of the Company's
Common Stock where such issuance of securities by the Company is approved by a
vote of at least two-thirds of the directors and by written consent of the
Executive, outside of his capacity as a director; (ii) if a transaction
identified in subparagraph 3(c) above occurs and is approved by a vote of at
least two-thirds of the directors and by the written consent of the Executive
outside of his capacity as a director; (iii) in the event of a sale, exchange,
transfer or other disposition of substantially all of the assets of the Company
to, or a merger, consolidation or other reorganization involving the Company
and, the Executive, alone or with other officers of the Corporation, or any
entity in which the Executive (alone or with other officers) has, directly or
indirectly, at least a 25% equity or ownership interest; or (iv) in a
transaction which includes the Executive as a principal and control person and
is otherwise commonly referred to as a "management leveraged buy-out". For the
purposes of subparagraph 3(a), a "Person" shall not be deemed the beneficial
owner of securities representing 20% or more of the combined voting
power of the Company's then outstanding securities if that "Person" is an
underwriter who has acquired shares for resale in connection with an
underwritten public offering of such shares.
Subparagraph 3(a) above to the contrary notwithstanding, a Change in
Control shall not be deemed to have occurred if a Person becomes the beneficial
owner, directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities
solely as the result of an acquisition by the Company or any subsidiary of the
Company of voting securities of the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such person to 20% or more of the combined voting power of the
Company's then outstanding securities, provided, however, that if a Person
becomes the beneficial owner of 20% or more of the combined voting power of the
Company's then outstanding securities by reason of shares purchased by the
Company or any subsidiary of the Company and shall, after such share purchases
by the Company or a subsidiary of the Company, become the beneficial owner,
directly or indirectly, of any additional voting securities of the Company, then
a Change in Control shall be deemed to have occurred with respect to such Person
under subparagraph 3(a) above. Notwithstanding the foregoing, in no event shall
a Change in Control be deemed to occur under subparagraph 3(a) above with
respect to the Benefit Plans.
For the purposes of this paragraph 3, the terms "Person," "group of
Persons", "beneficial owner" and "beneficial ownership" shall have the meanings
ascribed thereto under Sections 13(d) and 14(d) and Rule 13d promulgated under
the Securities Exchange Act.
4. Any termination of Executive's employment by the Company or by Executive
shall be communicated by written notice of termination to the other party. For
purposes of this Agreement, a "notice of termination" shall mean a dated notice
which shall (i) indicate the specific termination provision in the Employment
Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty nor more than ninety (90) days
after such notice of termination. In the case of termination by the Company of
Executive's employment for "Good and Sufficient Cause" pursuant to paragraph 4
of the Employment Agreement, the notice of termination may specify a date of
termination as of the date such notice of termination is given and (iv) notice
of termination shall be given in the manner specified in Section 14 of the
Employment Agreement.
5. If during the Extended Term following a Change in Control Executive
terminates his Employment for good reason as described in subparagraphs (i) to
(viii) of paragraph 2 hereof, or if Executive is terminated by the Company for
other than "Good and Sufficient Cause", then, in lieu of any further salary
payments to Executive for periods subsequent to the date of termination:
(a) The Company shall pay as a liquidated amount to Executive within ninety
(90) days of such termination, a lump sum cash payment which is equal to the
remainder of any further salary and ascertainable bonus payments that would have
become due to Executive during
the remainder of the Extended Term; calculating the amount of such salary
based upon the Executive's current gross salary (for federal income tax
purposes) and ascertainable bonus based upon the bonus that was received by
Executive during the Company's most recently completed fiscal year;
(b) Any stock options to acquire the Company's stock held by Executive
which were not fully exercisable shall immediately become fully exercisable by
Executive and the option exercise price for such options shall be deemed to be
one cent ($0.01) per share, notwithstanding any provision of any option
agreement to the contrary;
(c) The Company shall continue to pay or make available to Executive for a
period of two (2) years after the date of termination, all Company benefits
including all health, disability and life insurance plans provided by or through
the Company, including those provided in the Employment Agreement;
(d) If Executive is terminated by the Company for other than "Good and
Sufficient Cause", the "Non-Disclosure/Non-Competition" restrictions contained
within paragraph 8 of the Employment Agreement and the "Remedies" associated
therewith contained within paragraph 9 of the Employment Agreement shall be null
and void and unenforceable and inapplicable as to the Executive; and
(e) The Company, within ninety (90) days of Executive's date of
termination, shall (i) pay to Executive an additional amount sufficient to
satisfy all of Executive's current or prospective liability to any taxing
authority for excise taxes, penalties or any other taxes assessed in excess of
normal income taxes imposed on salaries, incurred by reason of the payments made
to Executive under this Agreement and (ii) cause the Company's independent
auditors to determine, within ninety (90) days, the amount to be paid to
Executive pursuant to subparagraph 5(a) and this subparagraph 5(e) above,
providing a copy to Executive of the auditors' detailed determination.
6. The Executive shall not be required to mitigate the amount of any
payment provided for under this Agreement by asking for other employment and
none of these payments may be reduced by any future salary that Executive may
earn.
7. A Change in Control shall be determined within the reasonable discretion
of the Executive who shall within 90 days of such determination provide written
notice (the "Notice") to the Company identifying the Change in Control, and, if
possible, providing reference to the Item or Items constituting the Change in
Control identified in subparagraphs 3(a)-3(e) above. The Company shall have 15
days in which to respond in writing. This response shall indicate whether or not
the Company adopts or disputes the conclusions set forth within the Notice, and
if the Company disputes the Notice, the Company's response shall indicate with
specificity the basis and grounds for such objection. In the absence of a timely
response, the Company shall be deemed to have adopted the conclusions set forth
within the Notice. The conclusions of the Executive set forth within the Notice
shall be deemed conclusive evidence of a Change in
Control. The Company shall bear the burden of proof of establishing that a
Change in Control has not occurred.
8. The Executive is aware that upon Notice of the occurrence of a Change in
Control, the Board of Directors or a shareholder of the Company may then cause
or attempt to cause the Company to refuse to comply with its obligations under
this Agreement, or may cause or attempt to cause the Company to institute, or
may institute litigation seeking to have this Agreement declared unenforceable,
or may take or attempt to take other action to deny Executive the benefits
intended under this Agreement. In these circumstances, the purpose of this
Agreement could be frustrated. It is the intent of the Company that Executive
not be required to incur the expenses associated with the enforcement of any
rights under this Agreement by litigation or other legal action, nor be bound to
negotiate any settlement of any rights hereunder, because the cost and expense
of such legal action or settlement would substantially detract from the benefits
intended to be extended to Executive hereunder. Accordingly, if following a
Notice relative to a Change in Control it should appear to Executive that the
Company has failed to comply with any of its obligations under this Agreement or
in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation or other
legal action designed to deny, diminish or to recover from Executive the
benefits intended to be provided to Executive hereunder, and Executive has
complied with all obligations under this Agreement, then the Company irrevocably
authorizes Executive from time to time to retain counsel of Executive's choice,
at the expense of the Company as provided in this paragraph 8, to represent
Executive in connection with the initiation or defense of any litigation or
other legal action, whether such action is by or against the Company or any
director, officer, shareholder, or other person affiliated with the Company, in
any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to Executive entering into an attorney-client relationship with such
counsel, and in that connection the Company and Executive agree that a
confidential relationship shall exist between Executive and such counsel. The
reasonable fees and expenses of counsel selected from time to time by Executive
as hereinabove provided shall be paid in advance or reimbursed to Executive, at
the election of the Executive, by the Company on a regular, periodic basis upon
presentation by Executive of a statement or statements or customary retainer
letter prepared by such counsel in accordance with its customary practices, up
to a maximum aggregate amount of $500,000. Any legal expenses incurred by the
Company by reason of any dispute between the parties as to enforceability of or
the terms contained in this Agreement, notwithstanding the outcome of any such
dispute, shall be the sole responsibility of the Company, and the Company shall
not take any action to seek reimbursement from Executive for such expense.
9. This Agreement is the entire agreement between the parties concerning
the subject matter hereof and supersedes all prior or contemporaneous
negotiations or understandings relating hereto, including a Termination Benefits
Agreement dated December 30, 1993, and a First Amendment to Termination Benefits
Agreement dated March 1, 1996. This Agreement may be altered or amended only by
a writing signed by the parties hereto.
10. This Agreement shall be construed in accordance with the laws of
Pennsylvania and shall be binding upon and inure to the benefit of the parties
hereto, their heirs, administrators, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this amendment the day
and
year first above written.
RCM TECHNOLOGIES, INC.
BY:________________________________
ATTEST:___________________________
___________________________________
▇▇▇▇ ▇▇▇▇▇
APPROVED:
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Chairman Compensation Committee