EXHIBIT 10.7
ACCESS WORLDWIDE COMMUNICATIONS, INC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
June 1, 1999
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Re: Severance Arrangements
Dear ▇▇▇▇▇▇:
Effective as of the Effective Date, Access Worldwide Communications,
Inc., a Delaware corporation and you (the "Employee"), hereby agree as set forth
below in this agreement (this "Agreement"). No amount shall be payable
hereunder unless the Employee shall have released the Company from the
obligation to pay any other severance benefit payable upon a Change in Control.
1. Section 1 -- Definitions. As used herein, the following words and
phrases shall have the following respective meanings unless the context clearly
indicates otherwise.
1.1. Base Period. The period consisting of the most recent five (5)
taxable years ending on or before the date on which a Change in Control occurs
or such portion of such period during which the Employee performed personal
services for the Company.
1.2. Base Salary. The annual amount the Employee receives as wages or
salary from the Company.
1.3 Board. The Board of Directors of the Company.
1.4 Cause. A termination for Cause is a termination evidenced by a
written notice specifying (i) that the Employee willfully and continually failed
to substantially perform the Employee's duties with the Company (other than a
failure resulting from the Employee's incapacity due to physical or mental
illness), which failure continued for a period of at least thirty (30) days
after a written notice of demand for substantial performance has been delivered
to the Employee specifying the manner in which the Employee has failed to
substantially perform; or (ii) that the Employee, in carrying out his employment
duties, has been
-2-
guilty of (A) willful or gross neglect or (B) willful or gross misconduct,
resulting in either case in material harm to the Company; or (iii) that the
Employee has been convicted of (A) a felony or (B) any offense involving moral
turpitude. No act, or failure to act, on the Employee's part shall be considered
"willful" unless the Employee has acted, or failed to act, with an absence of
good faith and without a reasonable belief that the Employee's action or failure
to act was in the best interests of the Company. Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform by the
Employee after Notice of Termination is given by the Employee shall constitute
Cause.
1.5. Change in Control. A "Change in Control" shall be deemed to occur:
(a) on the effective date of any merger or consolidation which results
in the holders of the outstanding voting securities of the Company (determined
immediately prior to such merger or consolidation) owning less than a majority
of the outstanding voting securities of the surviving corporation (determined
immediately following such merger or consolidation), or any sale or transfer by
the Company of all or substantially all its assets; or
(b) on the date of closing of any tender offer or exchange offer for
or the acquisition, directly or indirectly, by any person or group of, all or a
majority of the then outstanding voting securities of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur if the Company either merges or consolidates with or into another
company or sells or disposes of all or substantially all of its assets to
another company, if such merger, consolidation, sale or disposition is in
connection with a corporate restructuring wherein the stockholders of the
Company immediately before such merger, consolidation, sale or disposition own,
directly or indirectly, immediately following such merger, consolidation, sale
or disposition at least a majority of the combined voting power of all
outstanding classes of securities of the Company resulting from such merger or
consolidation, or to which the Company sells or disposes of its assets, in
substantially the same proportion as their ownership in the Company immediately
before such merger, consolidation, sale or disposition.
1.6. Company. The Company is Access Worldwide Communications,
Inc., a Delaware corporation.
1.7. Effective Date. The date this Agreement is approved by the
Board or the Compensation Committee of the Board, or such other date as the
Board or such Committee shall designate in its resolution approving this
Agreement, or any amendment or restatement thereof.
1.8. Good Reason. "Good Reason" shall mean:
(a) a reduction in the Employee's annual base salary after April
12, 1999; or
(b) a change in the Employee's responsibilities which, in the
Employee's reasonable judgment, represents a substantial reduction of
responsibilities as existed
-3-
immediately prior thereto or the assignment to the Employee of any duties or
responsibilities which, in the Employee's reasonable judgment, are inconsistent
with the duties or responsibilities which existed immediately prior thereto,
except in connection with the termination of the Employee's employment for
Cause, Permanent Disability, as a result of the Employee's death or by the
Employee other than for Good Reason; or
(c) the requirement by the Company after a Change in Control that the
Employee (without the consent of the Employee) be based at any place outside of
the Employee's normal commuting distance, except for reasonably required travel
on the Company's business which is not materially greater than such travel
requests prior to the Change in Control.
In addition, if the Employee voluntarily terminates the Employee's
employment in connection with and at the time of a Change in Control, the
Employee will be considered to have terminated the Employee's employment for
Good Reason, if the Employee will be required to accept a position with the
TelAc Teleservices Group of the Company effective with the Change in Control.
1.09 Notice of Termination. "Notice of Termination" shall mean a
notice which indicates the specific provisions in this Agreement relied upon as
the basis for any termination of employment and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Employee's employment under the provision so indicated. No purported
termination of employment shall be effective without such Notice of Termination.
1.10 Operating Companies. "Operating Companies" are the
subsidiaries of the Company.
1.11 Permanent Disability. The Employee shall be deemed to have
become permanently disabled for purposes of this Agreement if the Chief
Executive Officer of the Company finds, upon the basis of medical evidence
received from a physician reasonably satisfactory to the Chief Executive Officer
and the Employee, that the Employee is disabled, whether due to physical or
mental condition, so as to be prevented from performing the Employee's normal
duties for the Company with or without reasonable accommodation.
1.12 Severance Benefit. The benefit payable in accordance with
Section 3 of this Agreement.
2. Section 2 - Duration and Eligibility.
2.1 This Agreement shall be effective as of the Effective Date.
2.2 Eligibility. The Employee shall not be entitled to the
Severance Benefit if the Employee ceases to be an employee at any time prior to
a Change in Control, or if his employment is terminated following a Change in
Control under circumstances where the Employee is not entitled to a Severance
Benefit under the terms of this Agreement; provided, however, that if the
Employee ceases to be an employee during the period commencing ninety (90) days
prior to a Change in Control by reason of termination by the Company without
"cause", then the Employee shall be entitled to a Severance Benefit under the
terms of this
-4-
Agreement. For purposes hereof, "cause" shall mean (a) breach of any of the
Employee's employment obligations or (b) any material act of dishonesty
involving the Company or (c) repeated failure to follow the instructions of the
President of the Company in connection with the Employee's duties or (d)
repeated significant carelessness in the performance of duties or (e) repeated
unexcused absences during normal working hours or (f) repeated insobriety at the
work place or (g) that the Employee has been charged with committing and has
been convicted of (i) a felony or (ii) any crime or offense involving moral
turpitude. If the basis for cause is an act or acts described in clause (a), (c)
or (d) above, you shall be given thirty (30) days to cease or correct the
performance (or non performance) giving rise to such cause.
2.3. Three Month Transition Period. If following a Change in
Control, the Company requests in writing that the Employee remain as an employee
of the Company for a transition period, then to be eligible for a Severance
Benefit hereunder, the Employee shall be obligated to remain with the Company on
a transitional basis for up to three months following a Change in Control. In
such event, the Employee's Severance Benefit under Sections 3.2 (b) and (c)
shall commence following the end of the transition period. Notwithstanding the
foregoing, the Employee shall be entitled to terminate his employment for Good
Reason during the transition period and thereafter receive the applicable
Severance Benefit hereunder. The Company agrees to give the Employee sixty (60)
days' prior notice of the termination of transitional employment.
3. Section 3 - Severance Benefits.
3.1. Right to Severance Benefit.
(a) The Employee shall be entitled to receive from the Company a
Severance Benefit in the amount provided in Section 3.2 if (i) a Change in
Control has occurred and (ii) within one (1) year thereafter, the Employee's
employment with the Company terminates for any reason (for purposes hereof
employment shall be considered terminated if employment continues only on a
transitional basis) except that notwithstanding the provisions of this paragraph
(a), no benefits under this Agreement will be payable should the Employee's
termination of employment be (A) for Cause, (B) by reason of Permanent
Disability, (C) voluntarily initiated by the Employee for other than Good
Reason, or (D) by reason of the Employee's death.
(b) Notwithstanding any other provision of the Agreement, the sale,
divestiture or other disposition of an Operating Company (or part thereof),
shall not be deemed to be a termination of employment of employees employed by
such Operating Company, and such employees shall not be entitled to benefits
from the Company under this Agreement as a result of such sale, divestiture, or
other disposition, or as a result of any subsequent termination of employment,
provided the provisions of Section 5.2 have been satisfied.
3.2. Amount of Severance Benefit. If the Employee's employment is
terminated in circumstances entitling the Employee to a Severance Benefit as
provided in Section 3.1, the Employee shall be entitled to the following
benefits:
-5-
(a) the Company shall pay to the Employee, as severance pay and in
lieu of any further salary for periods subsequent to the Termination Date, an
amount in cash equal to the amount listed on Exhibit A;
(b) for the period specified on Exhibit A, subsequent to the Employee's
termination of employment, the Company shall at its expense continue on behalf
of the Employee and his dependents and beneficiaries, the medical and dental
benefits, life insurance, short term disability insurance and long-term
disability insurance which were being provided to the Employee at the time of
termination of employment. The benefits provided in this Subsection 3.2(b) shall
be no less favorable to the Employee, in terms of amounts and deductibles and
costs to the Employee, than the coverage provided the Employee under the plans
providing such benefits at the time Notice of Termination is given. The
Company's obligation hereunder to provide the foregoing benefits shall terminate
if the Employee obtains coverage under a subsequent employer's medical and
dental, life insurance, short-term disability insurance and or long-term
disability insurance benefit plans;
(c) the amounts provided for in Section 3.2(a) shall be paid in the
same periodic installment as the Employee's salary has been paid prior to the
Termination Date commencing on the Employee's Termination Date; provided,
however that the Company shall pay the balance of the Employee's Severance
Benefit then unpaid in a single lump sum payment within fifteen (15) days after
the Employee's commencement of employment with a new employer. No benefit
payable hereunder will be reduced if the Employee takes other employment.
Notwithstanding the foregoing, if any payment to or for the benefit of
the Employee under this Agreement either alone or together with other payments
to or for the benefit of the Employee would constitute a "parachute payment" (as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code")), the payments under this Agreement shall be reduced to the largest
amount that will eliminate both the imposition of the excise tax imposed by
Section 4999 of the Code and the disallowance of deductions to the Company under
Section 280G of the Code for any such payments. The amount and method of any
reduction in the payments under this Agreement pursuant to this paragraph shall
be as reasonably determined by the Compensation Committee of the Board.
4. Section 4 - Termination of Employment.
4.1. Written Notice Required. Any purported termination of
employment, either by the Company or by the Employee, shall be communicated by
written Notice of Termination to the other.
4.2. Termination Date. In the case of the Employee's death, the
Employee's Termination Date shall be the Employee's date of death. In all other
cases, the Employee's Termination Date shall be the date specified in the Notice
of Termination subject to the following: (a) if the Employee's employment is
terminated by the Company due to Permanent Disability, the date specified in the
Notice of Termination shall be at least thirty (30) days from the date the
Notice of Termination is given to the Employee, provided that the Employee shall
not have returned to the full-time performance of the Employee's duties during
-6-
such period of at least thirty (30) days; and (b) if the Employee terminates the
Employee's employment for Good Reason, the date specified in the Notice of
Termination shall not be more than thirty (30) days from the date the Notice of
Termination is given to the Company.
5. Section 5 - Successors to Company.
5.1. Successors. This Agreement shall bind any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, in the
same manner and to the same extent that the Company would be obligated under
this Agreement if no succession had taken place. In the case of any transaction
in which a successor would not by the foregoing provision or by operation of law
be bound by this Agreement, the Company shall require such successor expressly
and unconditionally to assume and agree to perform the Company's obligations
under this Agreement, in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place.
5.2. Sale of Operating Companies. In the event that one or
more Operating Companies (or part thereof) are sold, divested, or otherwise
disposed of by the Company subsequent to a Change in Control, the Company shall
require such purchaser or acquirer, as a condition precedent to such purchase or
acquisition, to assume, and agree to perform the Company's obligations under
this Agreement, in the same manner, and to the same extent that the Company
would be required to perform if no such acquisition or purchase had taken place.
In such circumstances, the purchaser or acquirer shall be solely responsible for
providing any benefits payable under this Agreement to such employees.
6. Section 6 - Amendment and Termination.
6.1. Amendment and Termination. This Agreement may be
terminated or amended in any respect by resolution adopted by the entire Board;
provided, however, that no such amendment or termination of this Agreement may
be made if such amendment or termination would adversely affect any benefit of
the Employee set forth herein and provided further, that this Agreement shall no
longer be subject to amendment, change, substitution, deletion, revocation or
termination in any respect whatsoever following a Change in Control.
6.2. Form of Amendment. The form of any amendment or
termination of this Agreement shall be a written instrument signed by a duly
authorized officer or officers of the Company, certifying that the amendment or
termination has been approved by the Board.
7. Section 7 - Miscellaneous.
7.1. Indemnification. If, after a Change in Control, the
Employee institutes any legal action in seeking to obtain or enforce, or is
required to defend in any legal action the validity or enforceability of, any
right or benefit provided by this Agreement, the Company will pay for all actual
legal fees and expenses incurred by such Employee so long as the Employee is
successful on the merits in whole or in substantial part.
-7-
7.2. Employment Status. This Agreement does not constitute a contract of
employment or impose on the Company any obligation to retain the Employee, to
change the status of the Employee's employment, or to change any employment
policies of the Company.
7.3. Validity and Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
7.4. Governing Law; Choice of Forum. The validity, interpretation,
construction and performance of this Agreement shall in all respects be
governed by the laws of the Commonwealth of Virginia. The Employee shall be
entitled to enforce the provisions of this Agreement in any state or federal
court located in the Commonwealth of Virginia, in addition to any other
appropriate forum.
* * *
-8-
By signing this letter, you agree to by bound by all of the terms and
conditions set forth herein.
Very truly yours,
ACCESS WORLDWIDE COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name:
Title: CEO
Accepted and Agreed To:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT A
BENEFITS
--------
1.0 AMOUNT OF SEVERANCE BENEFIT:
(a) one half (0.5) times the Employee's Base Salary in effect immediately prior
to the Change in Control.
2.0 The period applicable for Section 3.2(b) is six (6) months.